Question 19.
C maintains his books according to Single Entry System. Following figures were available from the books for the six months ended 31st December 2017:
Adjustments:
(a) He had withdrawn ₹ 200 in the beginning of every month for household purposes.
(b) Depreciation on Plant and Machinery @ 10% p.a.
(c) Further Bad Debts ₹ 5,000 and Provision for Doubtful Debts to be created @ 2%.
(d) During the period, salaries have been prepaid by ₹ 500 while wages outstanding were ₹ 1,000.
(e) Interest on drawings to be reckoned @ 6% p.a.
You are required to prepare the Statement of Profit or Loss for the half year ended 31st December, 2017, followed by Revised Statement of Affairs as on that date.
Answers
Statement of Profit or Loss with Revised Statement of Profit/Loss
Explanation:
Statement of Affairs
as on 1.7.17
Liabilities Amount(Rs.) Assets Amount(Rs.)
Creditors 9000 Cash and Bank Bal. 25000
Capital(bal.) 271000 Debtors 65000
Stock 40000
P&M 150000
280000 280000
Statement of Affairs
as on 31.12.17
Liabilities Amount(Rs.) Assets Amount(Rs.)
Creditors 10000 Cash and Bank Bal. 31000
O/s Wages 1000 P&M 140000
Capital(bal.) 265500 Debtors 60000
Stock 45000
Prepaid Salary 500
276500 276500
Statement of Profit or Loss
for the year ended 31.12.2017
Particulars Amount(Rs.)
Capital as on 31.12.17 265500
Add: Drawings 1200
Adjusted Capital 266700
Less: Capital as on 1.7.17 (271000)
Gross Loss(Before adjustment) 4300
Less: Interest on drawings (21)
Add: Depreciation on P&M 7000
Add: Bad debts 5000
Add: Prov. for DD 1100
Net Loss(after adjustment) 17379
Statement of Affairs
as on 31.12.17(After adjustment)
Liabilities Amount(Rs.) Assets Amount(Rs.)
Creditors 10000 Cash and Bank 31000
O/s Wages 1000 P&M 133000
Capital 252400 Debtors 53900
(-17379-1200-21) (-5000-1100)
Stock 45000
Prepaid Salary 500
263400 263400