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Page No 22.20:

Question 1:

Atul does not keep proper records of his business. He gives you the following information:
 

  ()
Opening Capital 2,00,000
Closing Capital 2,50,000
Drawings made during the year 60,000
Capital added during the year 75,000

Calculate profit or loss for the year.

Answer:

Statement of Profit or Loss
for the year ended ….
Particulars Amount
(Rs)
Capital at the end of the year 2,50,000
  Add: Drawings made during the year 60,000
  Less: Additional capital introduced during the year 75,000
Adjusted capital at the end of the year 2,35,000
  Less: Capital in the beginning of the year 2,00,000
Profit made during the year 35,000
   



Page No 22.21:

Question 2:

Mr. Joshi started a business with a capital of ₹ 5,00,000. At the end of the year his position was:

  ()
Cash in hand 15,000
Cash at bank 70,000
Sundry Debtors 1,20,000
Stock 2,40,000
Furniture 75,000
Machinery 2,00,000

Sundry creditors at this date totalled ₹ 80,000. During the year he introduced a further capital of ₹ 1,50,000 and withdrew for household expenses ₹ 90,000.
You are required to calculate profit or loss during the year.

Answer:

Statement of Affairs
as on March …
Liabilities Amount (Rs) Assets Amount (Rs)
Sundry Creditors 80,000 Cash in Hand 15,000
Capital (Balancing Figure) 6,40,000 Cash at Bank 70,000
    Sundry Debtors 1,20,000
    Stock 2,40,000
    Furniture 75,000
    Machinery 2,00,000
  7,20,000   7,20,000
       

 

Statement of Profit or Loss
for the year ended ….
Particulars Amount
(Rs)
Capital at the end of the year 6,40,000
  Add: Drawings made during the year 90,000
  Less: Additional capital introduced during the year 1,50,000
Adjusted capital at the end of the year 5,80,000
  Less: Capital in the beginning of the year 5,00,000
Profit made during the year 80,000
   

Page No 22.21:

Question 3:

Mr. Vasudev does not keep proper records of his business. He provided following information. You are required to prepare a statement showing the profit or loss for the year.

  ()
Owner's Equity at the beginning of the year 15,00,000
Bills Receivable 60,000
Cash in hand 80,000
Furniture 9,00,000
Building 10,00,000
Creditors 6,00,000
Stock in trade 2,00,000
Further capital introduced 3,20,000
Drawings made during the period 80,000

Answer:

Statement of Affairs
as on March …
Liabilities Amount (Rs) Assets Amount (Rs)
Creditors 6,00,000 Cash in Hand 80,000
Capital (Balancing Figure) 16,40,000 Furniture 9,00,000
    Stock in trade 2,00,000
    Building 10,00,000
    Bills Receivable 60,000
  22,40,000   22,40,000
       

 

Statement of Profit or Loss
for the year ended ….
Particulars Amount
(Rs)
Capital at the end of the year 16,40,000
  Add: Drawings made during the year 80,000
  Less: Additional capital introduced during the year 3,20,000
Adjusted capital at the end of the year 14,00,000
  Less: Capital in the beginning of the year 15,00,000
Loss incurred during the year 1,00,000
   

Page No 22.21:

Question 4:

Tulsi started business on 1st April, 2016 with a capital of ₹ 4,50,000. On 31st March, 2017 her position was as under:

  ()
Cash 99,000
Bills Receivable 75,000
Stock 48,000
Land and Building 1,80,000
Furniture 50,000

She owed ₹ 45,000 to her friend Parvati on that date. She withdrew ₹ 8,000 per month for household purposes. Ascertain her profit or loss for the year ended 31st March, 2017.

Answer:

Statement of Affairs
as on March 31, 2017
Liabilities Amount (Rs) Assets Amount (Rs)
Loan from Friend 45,000 Cash 99,000
Capital (Balancing Figure) 4,07,000 Bills Receivable 75,000
    Stock 48,000
    Land and Building 1,80,000
    Furniture 50,000
  4,52,000   4,52,000
       

 

Statement of Profit or Loss
for the year ended March 31, 2017
Particulars Amount
(Rs)
Capital at the end of the year 4,07,000
  Add: Drawings made during the year  (8,000 × 12) 96,000
  Less: Additional capital introduced during the year -
Adjusted capital at the end of the year 5,03,000
  Less: Capital in the beginning of the year 4,50,000
Profit made during the year 53,000
   



Page No 22.22:

Question 5(A):

From the following information, calculate capital at the beginning :

 
Capital at the end of the year 24,00,000
Drawing made during the year : ₹ 10,000 per month  
Fresh Capital introduced during the year 4,00,000
Profit of the current year 6,60,000

Answer:

Statement of Profit or Loss
for the year ended December 31, 2005
Particulars Amount
(Rs)
Capital at the end of the year 24,00,000
 
Add: Drawings made during the year  (10,000 × 12)
1,20,000
 
Less: Additional capital introduced during the year
4,00,000
Adjusted capital at the end of the year 21,20,000
 
Less: Capital in the beginning of the year (Balancing Figure)
14,60,000
Profit made during the year 6,60,000
   

Page No 22.22:

Question 5(B):

Question

Answer:

Closing Capital + Drawings - Additional Capital - Opening Capital = ProfitsClosing Capital = Opening Capital+ Additional Capital + Profits - DrawingsClosing Capital =  70,000 + 20,000 + 20,000 - 7,000 Closing Capital = Rs 1,03,000

Page No 22.22:

Question 6:

Suchitra started a business on 1st April, 2013 with a Capital of ₹ 50,00,000. On 31st March, 2014 her total Assets were ₹ 60,00,000 and Creditors were 3,00,000. She withdrew during the year for her personal expenses ₹ 10,000 per month upto 30th June, 2013 and thereafter ₹ 15,000 per month upto 31st March, 2014. During the year she sold her personal investments of ₹ 80,000 at 5% loss and introduced that amount in the business.
You are required to prepare a Statement of Profit or Loss for the year ending 31st March, 2014.

Answer:

Statement of Profit or Loss
for the year ended March 31, 2014
Particulars Amount
(Rs)
Capital at the end of the year (60,00,000 – 3,00,000) 57,00,000
 
Add: Drawings made during the year (10,000 × 3 + 15,000 × 9)
1,65,000
 
Less: Additional capital introduced during the year (WN)
76,000
Adjusted capital at the end of the year 57,89,000
 
Less: Capital in the beginning of the year
50,00,000
Profit made during the year 7,89,000
   

Working Note: Calculation of additional capital introduced during the year

Value of Investments  = 80,000 Loss =  80,000 × 5% =   4,000_Sale Value of Investments = Rs 76,000(Aditional Capital) 

Page No 22.22:

Question 7:

Following incomplete information is available from records maintained by Mr. X:

  1-4-2016
31-3-2017
Cash 1,000 1,500
Bank 8,000 10,000
Debtors 10,000 12,000
Stock 7,000 6,000
Machinery 20,000 20,000
Creditors 11,000 10,000
Bank Loan 12,000 12,000
During the year Mr. X introduced in the business the amount realised on sale of ₹ 10,000 investments at the premium of 5%. Personal expenses of Mr. X paid from business account amounted to ₹ 1,250 per month. Prepare a statement to calculate Profit (or Loss) during the year.

Answer:

Statement of Affairs
as on April 01, 2016
Liabilities Amount (Rs) Assets Amount (Rs)
Creditors 11,000 Cash 1,000
Bank Loan 12,000 Bank 8,000
Capital (Balancing Figure) 23,000 Debtors 10,000
    Stock 7,000
    Machinery 20,000
  46,000   46,000
       

 

Statement of Affairs
as on March 31, 2017
Liabilities Amount (Rs) Assets Amount (Rs)
Creditors 10,000 Cash 1,500
Bank Loan 12,000 Bank 10,000
Capital (Balancing Figure) 27,500 Debtors 12,000
    Stock 6,000
    Machinery 20,000
  49,500   49,500
       

 

 

Statement of Profit or Loss
for the year ended March 31, 2017
Particulars Amount
(Rs)
Capital at the end of the year 27,500
  Add: Drawings made during the year (1,250 × 12) 15,000
  Less: Additional capital introduced during the year (WN) 10,500
Adjusted capital at the end of the year 32,000
  Less: Capital in the beginning of the year 23,000
Profit made during the year 9,000
   

Working Note: Calculation of additional capital introduced during the year

Value of Investments  = 10,000 Premium                   =   500 (10,000 × 5%)Sale Value of Investments = Rs 10,500(Aditional Capital) 



Page No 22.23:

Question 8:

Raghuveer keeps incomplete records. His position was as follows:

  31st March, 2016
()
31st March, 2017
()
Cash in Hand 2,000 3,000
Cash at Bank 30,000 20,000
Stock-in-Trade 2,00,000 1,90,000
Sundry Debtors 85,000 1,40,000
Plant & Machinery 1,50,000 2,70,000
Fixtures and Fittings 18,000 15,000
Sundry Creditors 2,20,000 2,90,000

During the year, Raghuveer introduced ₹ 50,000 as further capital in the business and withdrew ₹ 7,500 per month. From the above information, show Profit or Loss for the year ended 31st March, 2017.

Answer:

Statement of Affairs
as on March 31, 2016
Liabilities Amount (Rs) Assets Amount (Rs)
Sundry Creditors 2,20,000 Cash in Hand 2,000
Capital (Balancing Figure) 2,65,000 Cash at Bank 30,000
    Stock-in-Trade 2,00,000
    Sundry Debtors 85,000
    Plant & Machinery 1,50,000
    Fixtures & Fittings 18,000
  4,85,000   4,85,000
       

 

Statement of Affairs
as on March 31, 2017
Liabilities Amount (Rs) Assets Amount (Rs)
Sundry Creditors 2,90,000 Cash in Hand 3,000
Capital (Balancing Figure) 3,48,000 Cash at Bank 20,000
    Stock-in-Trade 1,90,000
    Sundry Debtors 1,40,000
    Plant & Machinery 2,70,000
    Fixtures & Fittings 15,000
  6,38,000   6,38,000
       

 

Statement of Profit or Loss
for the year ended March 31, 2017
Particulars Amount
(Rs)
Capital at the end of the year 3,48,000
  Add: Drawings made during the year (7,500 × 12) 90,000
  Less: Additional capital introduced during the year 50,000
Adjusted capital at the end of the year 3,88,000
  Less: Capital in the beginning of the year 2,65,000
Profit made during the year 1,23,000
   

Page No 22.23:

Question 9:

On 1st April 2014, Mr, Ghosh started business with a capital of ₹ 5,00,000. He kept his books on single entry basis. Soon after he purchased furniture for ₹ 40,000 and purchased goods for ₹ 3,00,000. During the year he borrowed ₹ 1,00,000 from his brother and introduced further capital of his own amounting to ₹ 80,000.

On 31st March, 2015, there were sundry debtors amounting to ₹ 2,20,000 and creditors amounted to ₹ 1,40,000. Stock was valued at ₹ 4,50,000. Cash in hand ₹ 15,400 and Bank Overdraft ₹ 40,000

During the year Mr. Ghosh withdrew ₹ 2,000 per week for his family expenses. You are informed that included in sundry debtors is an irrecoverable amount of ₹ 5,000. He also took goods from the business for his personal use amounting to ₹ 4,000.
You are required to calculate his profit or loss during the year.

Answer:

Statement of Affairs
as on March …
Liabilities Amount (Rs) Assets Amount (Rs)
Loan from Brother 1,00,000 Cash in Hand 15,400
Creditors 1,40,000 Furniture 40,000
Bank Overdraft 40,000 Sundry Debtors 2,20,000  
Capital (Balancing Figure) 4,40,400
Less: Bad Debts
5,000 2,15,000
    Stock 4,50,000
  7,20,400   7,20,400
       

 

Statement of Profit or Loss
for the year ended March 31, 2015
Particulars Amount
(Rs)
Capital at the end of the year 4,40,400
 
Add: Drawings made during the year (2,000 × 52) + (4,000)
1,08,000
 
Less: Additional capital introduced during the year
80,000
Adjusted capital at the end of the year 4,68,400
 
Less: Capital in the beginning of the year
5,00,000
Loss incurred during the year 31,600
   

Page No 22.23:

Question 10:

The Capital of Sh. Madhusudan on 1st April, 2016 was ₹ 5,00,000 and on 31st March, 2017 was ₹ 4,80,000. He has informed you that he withdrew from the business ₹ 8,000 per month for his private use. He paid ₹ 20,000 for his income-tax and the installment of the loan of his personal house at the rate of ₹ 15,000 per month from the business. He had also sold his shares of Reliance Company costing ₹ 1,00,000 at a profit of 20% and invested half of this amount in the business. Calculate the profit or loss of the business.

Answer:

Statement of Profit or Loss
for the year ended March 31, 2017
Particulars Amount
(Rs)
Capital at the end of the year 4,80,000
  Add: Drawings made during the year (WN1) 2,96,000
  Less: Additional capital introduced during the year (WN2) 60,000
Adjusted capital at the end of the year 7,16,000
  Less: Capital in the beginning of the year 5,00,000
Profit made during the year 2,16,000
   

Working Note:
WN 1: Calculation of Drawings

Cash Withdrawn                    =    96,000 (8,000 × 12)Payment of Income tax          =    20,000Instalment of Personal Loan  = 1,80,000 (15,000 × 12)                                           Rs  2,96,000

WN 2: Calculation of additional capital

Value of Shares = 1,00,000 Add: Profit       =    20,000Sale Value        = Rs 1,20,000Aditional Capital = Rs 60,000 (1,20,0002) 

Page No 22.23:

Question 11:

Charu do not keep proper books of accounts. Prepare the statement of profit or loss for the year ending 31-3-2017 from the following information:

  1-4-2016
()
31-3-2017
()
Cash in hand 10,000 36,000
Debtors 20,000 80,000
Creditors 10,000 46,000
Bills Receivable 20,000 24,000
Bills Payable 4,000 42,000
Car 80,000
Stock 40,000 30,000
Furniture 8,000 48,000
Investment 40,000 50,000
Bank balance 1,00,000 90,000

The following adjustments are to be made:
(a) Proprietor withdrew cash ₹ 5,000 per month for private use.
(b) Depreciation @ 5% on Car and @10% on furniture.
(c) Outstanding Rent ₹ 6,000.
(d) Fresh Capital introduced during the year ₹ 30,000.

Answer:

Statement of Affairs
as on March 31, 2016
Liabilities Amount (Rs) Assets Amount (Rs)
Creditors 10,000 Cash in Hand 10,000
Bills Payable 4,000 Cash at Bank 1,00,000
Capital (Balancing Figure) 2,24,000 Stock 40,000
    Debtors 20,000
    Bills Receivable 20,000
    Furniture 8,000
    Investment 40,000
  2,38,000   2,38,000
       

 

Statement of Affairs
as on March 31, 2017
Liabilities Amount (Rs) Assets Amount (Rs)
Creditors 46,000 Cash in Hand 36,000
Bills Payable 42,000 Cash at Bank 90,000
Capital (Balancing Figure) 3,50,000 Stock 30,000
    Debtors 80,000
    Bills Receivable 24,000
    Furniture 48,000
    Investment 50,000
    Car 80,000
  4,38,000   4,38,000
       

 

 

Statement of Profit or Loss
for the year ended March 31, 2017
Particulars Amount
(Rs)
Capital at the end of the year 3,50,000
  Add: Drawings made during the year (5,000  12) 60,000
  Less: Additional capital introduced during the year 30,000
Adjusted capital at the end of the year 3,80,000
  Less: Capital in the beginning of the year 2,24,000
Profit Before Adjustment 1,56,000
   Less: Depreciation on Car 4,000
  Less: Depreciation on Furniture 4,800
  Less: Outstanding Rent 6,000
Profit made during the year 1,41,200
   

 

Final Statement of Affairs
as on March 31, 2017
Liabilities Amount (Rs) Assets Amount (Rs)
Opening Capital 2,24,000   Cash in Hand 36,000
Add: Net Profit
1,41,200   Cash at Bank 90,000
Add: Fresh Capital
30,000   Stock 30,000
Less: Drawings
60,000 3,35,200 Debtors 80,000
Creditors 46,000 Bills Receivable 24,000
Bills Payable 42,000 Investment 50,000
Outstanding Rent 6,000 Furniture 48,000  
   
Less: Depreciation
4,800 43,200
    Car 80,000  
   
Less: Depreciation
4,000 76,000
  4,29,200   4,29,200
       

 



Page No 22.24:

Question 12:

Ashok keeps incomplete records. The position of his business on 1st April, 2016 was as follows:
Cash in Hand ₹ 2,200; Cash at Bank ₹ 5,400; Stock ₹ 25,100; Sundry Debtors ₹ 18,700; Furniture ₹ 6,000; Sundry Creditors ₹ 13,500.
His position on 31st March, 2017 was as follows:
Cash in Hand ₹ 1,500; Cash at Bank ₹ 8,400; B/R ₹ 3,300; Stock ₹ 26,000; Sundry Debtors ₹ 24,600; Furniture ₹ 8,000; Sundry Creditors ₹ 14,200.

During the year he had withdrawn from the business ₹ 18,000, of which ₹ 9,200 were spent in purchasing a Typewriter for the business.
(a) Depreciate furniture and typewriter by 10%.
(b) Write off ₹ 600 as Bad-Debts.
(c) Make a provision of 5% on Debtors for doubtful debts.
Calculate the profit or loss of his business for the year ended 31st March, 2017 and prepare a final statement of affairs, after the above adjustments.

Answer:

Statement of Affairs
as on March 31, 2016
Liabilities Amount (Rs) Assets Amount (Rs)
Sundry Creditors 13,500 Cash in Hand 2,200
Capital (Balancing Figure) 43,900 Cash at Bank 5,400
    Stock 25,100
    Sundry Debtors 18,700
    Furniture 6,000
  57,400   57,400
       
 
Statement of Affairs
as on March 31, 2017
Liabilities Amount (Rs) Assets Amount (Rs)
Sundry Creditors 14,200 Cash in Hand 1,500
Capital (Balancing Figure) 66,800 Cash at Bank 8,400
    Stock 26,000
    Sundry Debtors 24,600
    Bills Receivable 3,300
    Furniture 8,000
    Typewriter 9,200
  81,000   81,000
       
 
Statement of Profit or Loss
for the year ended March 31, 2017
Particulars Amount
(Rs)
Capital at the end of the year 66,800
  Add: Drawings made during the year (18,000 – 9,200) 8,800
  Less: Additional capital introduced during the year  
Adjusted capital at the end of the year 75,600
  Less: Capital in the beginning of the year 43,900
Profit Before Adjustment 31,700
  Less: Depreciation on Furniture 800
  Less: Depreciation on Typewriter 920
  Less: Bad Debts 600
  Less: Provision for Doubtful Debts 1,200
Profit made during the year 28,180
   

 

Final Statement of Affairs
as on March 31, 2017
Liabilities Amount (Rs) Assets Amount (Rs)
Creditors 14,200 Cash in Hand 1,500
Opening Capital 43,900   Cash at Bank 8,400
Add: Net Profit
28,180   Stock 26,000
Less: Drawings
8,800 63,280 Bills Receivable 3,300
    Sundry Debtors 24,600  
   
Less: Bad Debts
600  
   
Less: Provision for Bad Debts
1,200 22,800
    Furniture 8,000  
   
Less: Depreciation
800 7,200
    Typewriter 9,200  
   
Less: Depreciation
920 8,280
       
  77,480   77,480
       

Page No 22.24:

Question 13:

Mohan commenced business on 1st April, 2012 with a capital of ₹ 50,000. On 1st January, 2013, he introduced ₹ 25,000 into business of which ₹ 10,000 was borrowed from Ram. His position on 31st March, 2013 was as under:

Assets: Cash in hand ₹ 4,000; Bank (Cr.) ₹ 6,500; Debtors ₹ 24,000; B/R ₹ 18,600.
Stock ₹ 25,400; Furniture ₹ 15,000; Prepaid expenses ₹ 1,000.
Liabilities : Creditors ₹ 13,500; B/P ₹ 4,800; Ram's Loan ₹ 10,000; Outstanding expenses ₹ 700.

Actual drawings were not known but his living expenses are ₹ 1,000 p.m. Depreciate furniture by 10%. Interest on loan is due @ 12% p.a.
Ascertain his profit or loss for the year 2013-13 & prepare final statement of affairs.

Answer:

Statement of Affairs
as on March 31, 2013
Liabilities Amount (Rs) Assets Amount (Rs)
Bank Overdraft 6,500 Bills Receivable 18,600
Creditors 13,500 Cash in Hand 4,000
Bills Payable 4,800 Stock 25,400
Ram’s Loan 10,000 Debtors 24,000
Outstanding Expenses 700 Furniture 15,000
Capital (Balancing Figure) 52,500 Prepaid Expenses 1,000
  88,000   88,000
       

 

 

Statement of Profit or Loss
for the year ended March 31, 2013
Particulars Amount
(Rs)
Capital at the end of the year 52,500
  Add: Drawings made during the year 12,000
  Less: Additional capital introduced during the year (25,000 – 10,000) 15,000
Adjusted capital at the end of the year 49,500
  Less: Capital in the beginning of the year 50,000
Loss Before Adjustment (500)
   Less: Depreciation on Furniture 1,500
  Less: Outstanding interest on Loan 300
Loss for the year (2,300)
   

 

Final Statement of Affairs
as on March 31, 2013
Liabilities Amount (Rs) Assets Amount (Rs)
Creditors 13,500 Cash in Hand 4,000
Opening Capital 50,000   Debtors 24,000
Add: Additional Capital
15,000   Bills Receivable 18,600
Less: Net Loss
2,300   Stock 25,400
Less: Drawings
12,000 50,700 Furniture 15,000  
Loan from Ram 10,000
Less: Depreciation
1,500 13,500
Bank Overdraft 6,500 Prepaid Expenses 1,000
Bills Payable 4,800    
Outstanding Expenses 700    
Outstanding Interest on Loan 300    
  86,500   86,500
       



Page No 22.25:

Question 14:

On April 1st, 2016, X started a business with ₹ 40,000 as his capital. On March 31st, 2017, his position was as follows:

  ()
Creditors 30,000
Bills Payable 10,000
Bank 10,000
Debtors 50,000
Stock 40,000
Plant 68,000
Furniture 12,000

During the year 2016-17 X drew ₹ 24,000. On 1st October 2016, he introduced further capital amounting to ₹ 30,000. You are required to ascertain profit or loss made by him during the year 2016-17.
Adjustments:
(a) Plant is to be depreciated at 10%.
(b) A Provision of 5% is to be made against debtors.
Also prepare the Statement of Affairs as on March 31st 2017.

Answer:

Statement of Affairs
as on March 31, 2017
Liabilities Amount (Rs) Assets Amount (Rs)
Bills Payable 10,000 Bank 10,000
Creditors 30,000 Plant 68,000
Capital (Balancing Figure) 1,40,000 Stock 40,000
    Debtors 50,000
    Furniture 12,000
  1,80,000   1,80,000
       

 

 

Statement of Profit or Loss
for the year ended March 31, 2017
Particulars Amount
(Rs)
Capital at the end of the year 1,40,000
  Add: Drawings made during the year 24,000
  Less: Additional capital introduced during the year 30,000
Adjusted capital at the end of the year 1,34,000
  Less: Capital in the beginning of the year 40,000
Profit Before Adjustment 94,000
   Less: Depreciation on Plant 6,800
  Less: Provision for Doubtful Debts 2,500
Profit made during the year 84,700
   

 

Final Statement of Affairs
as on March 31, 2017
Liabilities Amount (Rs) Assets Amount (Rs)
Creditors 30,000 Bank 10,000
Opening Capital 40,000   Furniture 12,000
Add: Additional Capital
30,000   Stock 40,000
Add: Net Profit
84,700   Debtors 50,000  
Less: Drawings
24,000 1,30,700
Less: Provision for Bad Debts
2,500 47,500
Bills Payable 10,000 Plant 68,000  
   
Less: Depreciation
6,800 61,200
  1,70,700   1,70,700
       

Page No 22.25:

Question 15:

From the following information relating to the business of Mr. X who keeps books by single entry ascertain the profit or loss for the year ended 31st March, 2017:

  1-4-2016
()
31-3-2017
()
Machinery 16,000 16,000
Furniture 4,000 4,000
Stock 14,000 10,000
Sundry Debtors 8,000 9,000
Bank Balance 400 3,600
Sundry Creditors 10,000 7,000

Mr. X withdrew ₹ 4,100 during the year to meet his household expenses. He introduced ₹ 600 as fresh capital. Machinery and furniture to be depreciated by 10% and 5% per annum respectively.

Answer:

Statement of Affairs
as on April 01, 2016
Liabilities Amount (Rs) Assets Amount (Rs)
Creditors 10,000 Cash at Bank 400
Capital (Balancing Figure) 32,400 Machinery 16,000
    Stock 14,000
    Debtors 8,000
    Furniture 4,000
  42,400   42,400
       

 

Statement of Affairs
as on March 31, 2017
Liabilities Amount (Rs) Assets Amount (Rs)
Creditors 7,000 Cash at Bank 3,600
Capital (Balancing Figure) 35,600 Machinery 16,000
    Stock 10,000
    Debtors 9,000
    Furniture 4,000
  42,600   42,600
       

 

Statement of Profit or Loss
for the year ended March 31, 2017
Particulars Amount
(Rs)
Capital at the end of the year 35,600
  Add: Drawings made during the year 4,100
  Less: Additional capital introduced during the year 600
Adjusted capital at the end of the year 39,100
  Less: Capital in the beginning of the year 32,400
Profit Before Adjustment 6,700
   Less: Depreciation on Machinery 1,600
  Less: Depreciation on Furniture 200
Profit made during the year 4,900
   

Page No 22.25:

Question 16:

Mr. A does not keep proper records of his business. Following information is a available from records keept by him:

  1-4-2016
()
31-3-2017
()
Cash 20,000 18,000
Bank 30,000 33,000
Debtors 17,000 25,000
Stock 40,000 60,000
Fixed Assets 29,000 29,000
Creditors 52,000 32,000
Loan 10,000 25,000

Mr. A withdrew from the business ₹ 3,000 per month upto 30th September 2016 and thereafter ₹ 4,000 per month as drawings. ₹ 50,000 realised by the proprietor as maturity value of National Saving Certificates was invested in the business.
Prepare a statement showing net profit (or net loss) for the year.

Answer:

Statement of Affairs

as on April 01, 2016

Liabilities

Amount

(Rs)

Assets

Amount

(Rs)

Creditors

52,000

Cash in Hand

20,000

Loan

10,000

Cash at Bank

30,000

Capital 

74,000

Debtors

17,000

(Balancing Figure)

 

Stock

40,000

 

 

Fixed Assets

29,000

 

1,36,000

 

1,36,000

 

 

 

 

 

Statement of Affairs

as on March 31, 2017

Liabilities

Amount

(Rs)

Assets

Amount

(Rs)

Creditors

32,000

Cash in Hand

18,000

Loan

25,000

Cash at Bank

33,000

Capital 

1,08,000

Debtors

25,000

(Balancing Figure)

 

Stock

60,000

 

 

Fixed Assets

29,000

 

1,65,000

 

1,65,000

 

 

 

 

  

Statement of Profit or Loss

for the year ended March 31, 2017

Particulars

Amount

(Rs)

Capital at the end of the year

1,08,000

 

Add: Drawings made during the year

(3,000 × 6 + 4,000 × 6)

42,000

 

Less: Additional capital introduced during the year

50,000

Adjusted capital at the end of the year

1,00,000

 

Less: Capital in the beginning of the year

74,000

Profit made during the year

26,000

 

 



Page No 22.26:

Question 17:

Mr. White does not keep his books properly. Following information is available from his books.

  1-4-2015
()
31-3-2016
()
Sundry Creditors 45,000 93,000
Loan from wife 66,000 57,000
S. Debtors 22,500
Land & Building 89,600 90,000
Cash in hand 7,500 8,700
Bank overdraft 25,000
Furniture 1,300 1,300
Stock 34,000 25,000

During the year Mr. White sold his private car for ₹ 50,000 and invested this amount into the business. He withdrew from the business ₹ 1,500 per month upto 31st October, 2015 and thereafter ₹ 4,500 per month as drawings. You are required to prepare a statement of profit or loss and a statement of affairs as at March 31, 2016.

Answer:

Statement of Affairs
as on April 01, 2015
Liabilities Amount (Rs) Assets Amount (Rs)
Loan from Wife 66,000 Cash in Hand 7,500
Creditors 45,000 Furniture 1,300
Bank Overdraft 25,000 Stock 34,000
Capital (Balancing Figure) 18,900 Debtors 22,500
    Land & Building 89,600
  1,54,900   1,54,900
       

 

Statement of Affairs
as on March 31, 2016
Liabilities Amount (Rs) Assets Amount (Rs)
Creditors 93,000 Cash in Hand 8,700
Loan from Wife 57,000 Furniture 1,300
    Stock 25,000
    Land & Building 90,000
    Capital Overdrawn  (Balancing Figure) 25,000
  1,50,000   1,50,000
       

 

 

Statement of Profit or Loss
for the year ended March 31, 2016
Particulars Amount
(Rs)
Capital at the end of the year (25,000)
 
Add: Drawings made during the year (1,500 × 7 + 4,500 × 5)
33,000
 
Less: Additional capital introduced during the year
50,000
Adjusted capital at the end of the year (42,000)
 
Less: Capital in the beginning of the year
(18,900)
Loss incurred during the year (60,900)
   



Page No 22.27:

Question 18:

X who keeps incomplete records, gives you the following information:

Assets and Liabilities
  1st  April, 2016
()
31st March, 2017
()
Stock in hand 18,700 20,400
Debtors 12,000 14,000
Creditors 9,000 1,500
Bills Receivable 4,000 5,000
Bills Payable 1,000 200
Furniture 600 600
Building 12,000 12,000
Bank Balance 4,350 3,350
    (Overdraft)

You are also given the following information:
(i) A provision of ₹ 1,450 is required for bad and doubtful debts.
(ii) Depreciation @ 5% is to be written off on Building and furniture.
(iii) Wages outstanding ₹ 3,000; salaries outstanding ₹ 1,200.
(iv) Insurance has been prepaid to the extent of ₹ 250.
(v) Legal Expenses outstanding ₹ 700.
(vi) Drawings of Mr. X during the year were ₹ 7,520.
Prepare a statement of Profit as on 31st March, 2017, and a final statement of affairs as at that date.

Answer:

Statement of Affairs
as on March 31, 2016
Liabilities Amount (Rs) Assets Amount (Rs)
Bills Payable 1,000 Cash at Bank 4,350
Creditors 9,000 Stock 18,700
Capital (Balancing Figure) 41,650 Debtors 12,000
    Bills Receivable 4,000
    Furniture 600
    Building 12,000
  51,650   51,650
       

 

Statement of Affairs
as on March 31, 2017
Liabilities Amount (Rs) Assets Amount (Rs)
Bills Payable 200 Stock 20,400
Creditors 1,500 Debtors 14,000
Bank Overdraft 3,350 Bills Receivable 5,000
Capital (Balancing Figure) 46,950 Furniture 600
    Building 12,000
  52,000   52,000
       
 
Statement of Profit or Loss
for the year ended March 31, 2017
Particulars Amount
(Rs)
Capital at the end of the year 46,950
  Add: Drawings made during the year 7,520
  Less: Additional capital introduced during the year  
Adjusted capital at the end of the year 54,470
  Less: Capital in the beginning of the year 41,650
Profit Before Adjustment 12,820
   Less: Depreciation on Furniture 30
  Less: Depreciation on Building 600
  Less: Provision for Doubtful Debts 1,450
  Less: Outstanding Wages 3,000
  Less: Outstanding Salaries 1,200
  Less: Outstanding Legal Expenses 00
  Add: Prepaid Insurance 250
Profit made during the year 6,090
   

 

Final Statement of Affairs
as on March 31, 2017
Liabilities Amount (Rs) Assets Amount (Rs)
Creditors 1,500 Prepaid Insurance 250
Opening Capital 41,650   Bills Receivable 5,000
Add: Net Profit
6,090   Stock 20,400
Less: Drawings
7,520 40,220 Furniture 600  
Outstanding Wages 3,000
Less: Depreciation
30 570
Outstanding Salaries 1,200 Debtors 14,000  
Bills Payable 200
Less: Provision for Bad Debts
1,450 12,550
Bank Overdraft 3,350 Building 12,000  
Outstanding Legal Expenses 700
Less: Depreciation
600 11,400
  50,170   50,170
       



Page No 22.28:

Question 19:

The following information is available from Sachin, who maintains books of accounts on single entry system:

 
  1st  April, 2016
()
31st March, 2017
()
Cash and Bank 20,000 21,000
Sundry debtors 17,000 25,000
Stock 40,000 60,000
Furniture 29,000 29,000
Sundry Creditors 32,000 22,000
10% Loan from Mrs. Sachin 30,000 30,000

Sachin withdrew ₹ 5,000 from the business every month for meeting his household expenses. During the year, he sold investments held by him privately for ₹ 35,000 and invested the amount in his business.
At the end of the year 2016-17, it was found that full year's interest on loan from Mrs. Sachin had not been paid. Depreciation @ 10% per annum was to be provided on furniture for the full year. Shop assistant was to be given a share of 5% on the profits ascertained before charging such share.
Calculate profit earned during the year ended 31st March, 2017 by Sachin.

Answer:

Statement of Affairs
as on April 01, 2016
Liabilities Amount (Rs) Assets Amount (Rs)
10% Loan from Mrs. Sachin 30,000 Cash and Bank 20,000
Creditors 32,000 Debtors 17,000
Capital (Balancing Figure) 44,000 Stock 40,000
    Furniture 29,000
  1,06,000   1,06,000
       

 

Statement of Affairs
as on March 31, 2017
Liabilities Amount (Rs) Assets Amount (Rs)
10% Loan from Mrs. Sachin 30,000 Cash at Bank 21,000
Creditors 22,000 Debtors 25,000
Capital (Balancing Figure) 83,000 Stock 60,000
    Furniture 29,000
  1,35,000   1,35,000
       

 

 

Statement of Profit or Loss
for the year ended March 31, 2017
Particulars Amount
(Rs)
Capital at the end of the year 83,000
  Add: Drawings made during the year  (5,000 × 12) 60,000
  Less: Additional capital introduced during the year 35,000
Adjusted capital at the end of the year 1,08,000
  Less: Capital in the beginning of the year 44,000
Profit Before Adjustment 64,000
   Less: Depreciation on Furniture 2,900
  Less: Outstanding Interest on Loan 3,000
                       58,100
  Less: Shop Assistant’s Share (58,100 × 5/100) 2,905
Profit made during the year 55,195
   


Statement of Affairs

as on March 31,2017

Liabilities

Amount

(Rs)

Assets

Amount

(Rs)

Opening Capital

44,000

 

Cash at Bank

21,000

Add: Net Profit

55,195

 

Debtors

25,000

Add: Additional Capital Introduced

35,000

 

Stock

60,000

Less: Drawings

60,000

74,195

Furniture

29,000

 

Creditors

22,000

Less: Depreciation

2,900

26,100

Shop’s Assistant Share

2,905

 

 

10% Loan from Sachin

30,000

 

 

 

Add: Outstanding Interest

3,000

33,000

 

 

 

1,32,100

 

1,32,100

 

 

 

 

Page No 22.28:

Question 20:

A retail Trader has not kept proper books of accounts. Ascertain his profit or loss for the year ending 31st March, 2017, and prepare a final statement of affairs from the following information:

 
  1st April, 2016
()
31st March, 2017
()
Cash Bank 3,500 4,100
Bank Balance Dr. 6,000 Cr. 15,000
Stock 22,000 36,400
Sundry Debtors 18,800 34,500
Sundry Creditors 12,100 8,000
Loan from X 10,000
Bills Receivable 4,000
Fixed Assets 40,000 60,000

He withdrew from the business ₹ 1,500 per month for his personal use and ₹ 8,000 for giving a personal loan to his brother. He also used a house for his personal purposes, the rent of which at the rate of ₹ 900 per month and electricity charges at an average rate of ₹ 250 per month were paid from the business account.
He had received a lottery prize of ₹ 25,000, out of which he invested half the amount in business.

He has not paid two months' salary to his clerk @ ₹ 1,200 per month, but insurance premium @ ₹ 600 per annum was paid on 1st October, 2016 to run for one year.

Loan from X was taken on 1st July, 2016 on which interest was unpaid @ 18% p.a.
Fixed  assets are to be depreciated @ 10% p.a.

Answer:

Statement of Affairs
as on April 01, 2016
Liabilities Amount (Rs) Assets Amount (Rs)
Creditors 12,100 Cash at Bank 6,000
Capital (Balancing Figure) 82,200 Stock 22,000
    Debtors 18,800
    Bills Receivable 4,000
    Fixed Assets 40,000
    Cash  in Hand 3,500
  94,300   94,300
       

 

Statement of Affairs
as on March 31, 2017
Liabilities Amount (Rs) Assets Amount (Rs)
Loan from X 10,000 Stock 36,400
Creditors 8,000 Debtors 34,500
Bank Overdraft 15,000 Cash 4,100
Capital (Balancing Figure) 1,02,000 Fixed Assets 60,000
  1,35,000   1,35,000
       

 

 

Statement of Profit or Loss
for the year ended March 31, 2017
Particulars Amount
(Rs)
Capital at the end of the year 1,02,000
  Add: Drawings made during the year (WN) 39,800
  Less: Additional capital introduced during the year 25,0002 12,500
Adjusted capital at the end of the year 1,29,300
  Less: Capital in the beginning of the year 82,200
Profit Before Adjustment 47,100
   Less: Depreciation on Fixed Assets 6,000
  Less: Outstanding Interest on Loan 1,350
  Less: Outstanding Salary 2,400
  Add: Prepaid Insurance 300
Profit made during the year 37,650
   

 

Final Statement of Affairs
as on March 31, 2017
Liabilities Amount (Rs) Assets Amount (Rs)
Creditors 8,000 Cash 4,100
Opening Capital 82,200   Stock 36,400
Add: Additional Capital
12,500   Debtors 34,500
Add: Net Profit
37,650   Prepaid Insurance 300
Less: Drawings
39,800 92,550 Fixed Assets 60,000  
Outstanding Salary 2,400
Less: Depreciation
6,000 54,000
Loan from X 10,000    
Bank Overdraft 15,000    
Outstanding Interest on Loan 1,350    
  1,29,300   1,29,300
       

Working Note: Calculation of Amount of Drawings

Cash Withdrawn   = Rs 18,000 Loan to Brother    = Rs 8,000Rent                      = Rs 10,800 Electricity Charges = Rs 3,000                              = Rs 39,800¯ 



Page No 22.29:

Question 21:

Gopal keeps incomplete records. On 1st April, 2016, his position was as follows:

Statement of Affairs
  (₹)   (₹)
Bank Overdraft 7,500 Cash 6,400
Sundry Creditors 15,000 Stock 52,000
Capital 1,64,500 Sundry Debtors 28,000
    Fixed Assets 1,00,000
    Prepaid Expenses 600
       
  1,87,000 1,87,000
   

His position on 31st March, 2017 was as follows:
Cash in hand ₹ 3,000; Cash at Bank ₹ 5,000; Stock ₹ 44,000; Debtors ₹ 21,000; Fixed Assets ₹ 80,000; Creditors ₹ 22,000.
You are informed that Gopal has taken stocks worth ₹ 4,500 for his private use and that he has been regularly transferring ₹ 2,000 per month from his business banking account by way of drawings. Out of his drawings he spent ₹ 15,000 for purchasing a Scooter for the business on 1st October, 2016.

You are requested to find out his profit or loss and to prepare the Statement of Affairs after considering the following :
1. Depreciate Fixed Assets and Scooter by 10% p.a.
2. Write off Bad-Debts ₹ 1,000 and provide 5% for doubtful debts on Sundry Debtors.
3. Commission earned but not received by him was ₹ 2,500.

Answer:

Statement of Affairs
as on March 31, 2017
Liabilities Amount (Rs) Assets Amount (Rs)
Creditors 22,000 Cash at Bank 5,000
Capital (Balancing Figure) 1,46,000 Cash in Hand 3,000
    Stock 44,000
    Debtors 21,000
    Fixed Assets 80,000
    Scooter 15,000
  1,68,000   1,68,000
       

 

Statement of Profit or Loss
for the year ended March 31, 2017
Particulars Amount
(Rs)
Capital at the end of the year 1,46,000
  Add: Drawings made during the year (24,000 + 4,500 - 15,000) 13,500
  Less: Additional capital introduced during the year  
Adjusted capital at the end of the year 1,59,500
  Less: Capital in the beginning of the year 1,64,500
Loss Before Adjustment (5,000)
   Less: Depreciation on Fixed Assets 8,000
  Less: Depreciation on Scooter 750
  Less: Bad Debts 1,000
  Less: Provision for Doubtful Debts 1,000
  Add: Accrued Commission 2,500
Loss incurred during the year (13,250)
   

 

Final Statement of Affairs
as on March 31, 2017
Liabilities Amount (Rs) Assets Amount (Rs)
Creditors 22,000 Cash in Hand 3,000
Opening Capital 1,64,500   Cash at Bank 5,000
Less: Net Loss
13,250   Stock 44,000
Less: Drawings
13,500 1,37,750 Debtors 21,000  
   
Less: Bad Debts
1,000  
   
Less: Provision for Bad Debts
1,000 19,000
    Fixed Assets 80,000  
   
Less: Depreciation
8,000 72,000
    Scooter 15,000  
   
Less: Depreciation
750 14,250
    Accrued Commission 2,500
  1,59,750   1,59,750
       



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