Single entry Question with answers


Q.5.   Radheshyam a retail trader had no proper methods accounting but the following but the following information is made available to you, you are required to prepare opening and closing statement of Affairs and Statement showing Profit or Loss for the year ended 31stMarch, 2007 after taking into consideration the adjustments.
Particulars
Amount (`.) 01.04.2006
Amount (`.) 31.03.2007
Sundry Debtors
22,500
25,000
Sundry Creditors
30,000
35,000
Bank overdraft
40,000
20,000
Stock
32,500
40,000
Cash in Hand
1,000
4,000
Bill Receivable
30,000
40,000
Furniture
5,000
5,000
Motor Van
40,000
40,000
Computer
30,000
60,000
                   Adjustments:-
(1)      On 1st October, 2006 Mr. Radheshyam had withdrawn `.25,000 for personal use out of which he invested `. 5,000 at par on the same day in 10% Municipal Bonds which is treated as business assets.
(2)      He had also withdrawn `. 15,000 for his daughter’s marriage.
(3)      Depreciate Furniture by 10% p.a. and write off `.1,000 from motor van.
(4)      As regards debtors `.1,000 is irrecoverable and further reserve of 5% is to be made on debtors.
(5)      Allow interest on Capital at 10% p.a.
(6)      Charge interest on Drawing `. 1,000.                                                (10)
In the books of Radheshyam
Opening Statement of Affairs as on 1.4.2006
Liabilities
Rs.
Assets
Rs.
Capital
Sundry Creditors
Bank Overdraft
91,000
30,000
40,000
Sundry Debtors
Stock
Cash in hand
Bills Receivable
Furniture
Motor Van
Computers
22,500
32,500
1,000
30,000
5,000
40,000
30,000

1,61,000

1,61,000
Closing Statement of Affairs as on 31.3.2007
Liabilities
Rs.
Rs.
Assets
Rs.
Rs.
Capital
Sundry Creditors
Bank Overdrafts

1,60,550
35,000
20,000
Sundry Debtors
Less: New Bad debts

Less: New R.D.D.
Stock
Cash in hand
Bills Receivable
Furniture
Less: Depreciation
Motor Van
Less: Written off
Computers
10% Municipal Bonds
Add: Interest
25,000
  1,000
24,000
  1,200



5,000
  500
40,000
 1,000

5,000
   250



22,800
40,000
4,000
40,000

4,500

39,000
60,000

5,250


2,15,550


2,15,550
Statement of profit or loss as on 31.3.2007
Particulars
Rs.
Rs.
Capital at the end of the year
Add: (1) Drawings (20,000 + 15,000)
        (2) Interest on Drawings

35,000
1,000
160550

36,000

Less: (1) Further capital introduced
         (2) Interest on capital

-
9,100
1,96,550

9,100

Less: Capital at the beginning of the year

1,87,450
91,000
Net Profit

96,450
Working Note: Interest on Drawings is directly given in the problem, so there is no need to consider average interest.

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