Question

Mr. Prem commenced business of trading in electronic goods with an initial capital of Rs 15,00,000.out of the said Rs 15,00,000,he paid Rs 10,00,000 towards purchase of electronic goods .he further spent Rs 2,00,000 on furnishing the shop and Rs35,000 for purchase of computer and printer .Rs 10,000 is yet to be paid to supplier of computer . He sold goods costing Rs 5,00,000 for Rs 7,00,000 in cash and goods costing Rs 2.50,000 for Rs 3,10,000 on credit.goods sold on credit for Rs 25,000 wwere returned being defective.These goods (costing RS25,000) were returned to the supplier.Looking into the response, he decided to trade in home appliances for Rs 8,00,000 out of which purchases of Rs 2,00,000 were on credit. Due to an earthquqke, 2 LCD Telivisions costing Rs 50,000 were completely destroyed. Mr Prem received an insurance claim of Rs 30,000. A customer purchased goods costing Rs 2,25,000for Rs 3,00,000 and was allowed discount of Rs 15,000. He was further allowed discount of Rs5,000 FOR Payment with in agreed time. He paid salary to Shyam of Rs 55,000;Rs 5,000 were yet to be paid.He insured the goods and paid insurance premium of Rs 10,000.Out of this ,Rs 5,000 are for the next year. Mr prem withdrew Rs 30,000during the year for his personal use . you are required to find everything about this question like: (a)income earned by Mr Prem

Answer 1

"1. Operational capital = 15,00,000

2. Fixed assets = building + computer + printers = 2,00,000+ 35,000 = 2,35,000

3. Purchase = Total – returns – loss of purchase = 10,00,000 + 8,00,000 –

20,000-50,000 = 17,3000

4. Long term liability = nil

5. Current liability = supplier of equipment + creditor = 10,000 + 180,000 (2,00,000-20,000) = 1,90,000

6. Expenses = discount allowed +salary+ insurance expenses +loss of earthquake = 5000+60,000+5,000+20,000(50,000-30,000) = 90,000

7. Prepaid expenses = prepaid insurance = 10,000

8. Outstanding expenses = outstanding salary = 5,000

9. Income earned = income earned on sales = 3,20,000

10. Debtors = 5,70,000

"