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Question
Miss. Sanika keeps her books on the Single Entry System. The statement of affairs is given on 31st March 2018.
| Liabilities | Amt (₹) | Assets | Amt (₹) |
| Creditors | 12,000 | Plant and Machinery | 17,000 |
| Bills Payable | 8,500 | Debtors | 19,500 |
| Capital Balance | 38,500 | Stock | 9,000 |
| Cash in Hand | 7,500 | ||
| Bills Receivable | 6,000 | ||
| 59,000 | 59,000 |
On 31st March 2018 their Assets and Liabilities were as follows:
Plant and Machinery ₹ 42,000, Stock ₹ 38,000, Cash in Hand ₹ 10,000, Creditors ₹ 7,000, Debtors ₹ 25,000, Bills Payable ₹ 6,000
Drawings during the year were ₹ 5,500, Plant and Machinery were found Overvalued by 5% p.a. and Stock was found Undervalued by 20% p.a., R.D.D. was to be created at 10% p.a. on Debtors, Interest on Capital was allowed at 10% p.a.
Prepare:
1. Closing Statement of Affairs.
2. Statement of Profit or Loss for the year ended 31st March 2018.
Solution
| In the books of miss Sanika | |||
| Closing statement of Affairs as on 31.03.2018 | |||
| Liabilities | Amt. (₹) | Assets | Amt. (₹) |
| Creditors | 7,000 | Plant and Machinery | 42,000 |
| Bills Payable | 6,000 | Stock | 38,000 |
| Capital | 1,02,000 | Cash in Hand | 10,000 |
| (Balancing figure) | Debtors | 25,000 | |
| 1,15,000 | 1,15,000 | ||
| Statement of Profit or Loss for the year ended 31st March 2018. | ||
| Particulars | Amt. (₹) | Amt. (₹) |
| Capital at the end of the year (31.03.2018) | 1,02,000 | |
| Add: Drawings during the year | 5,500 | |
| Adjusted closing capital | 1,07,500 | |
| Less : Capital at the beginning of the year (01.04.17) | 38,500 | |
| Profit before adjustments | 69,000 | |
| Add: Income and gains during the year | ||
| (1) Stock undervalued by 20% | 9,500 | |
| 78,500 | ||
| Less: Expenses and losses during the year | ||
| (1) Plant and machinery overvalued by 5% | 2,000 | |
| (2) R.D.D. @ 10% on debtors | 2,500 | |
| (3) Interest on capital @ 10% | 3,850 | 8,350 |
| Net profit earned during the year | 70,150 | |
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Answer in one sentence only.
What is Statement of Affairs?
Write a word, term, or phrase which can substitute the following statement.
A statement which is similar to Balance Sheet.
Write a word, term, or phrase which can substitute the following statement.
A statement similar to Balance Sheet prepared to find out the amount of opening capital
Select the most appropriate answer from the alternatives given below and rewrite the sentence.
The capital balances are ascertained by preparing ________
State True or False with reasons:
Statement of Affairs and Balance Sheet are one and the same.
Fill in the blank:
Statement of Affairs is just like a ______________.
| Closing Capital | Opening Capital | Profit | ||
| ₹ 10,000 | - | ₹ 5,000 | = | ? |
| Opening Assets | Opening Liabilities | Opening Capital | ||
| ? | - | ₹ 20,000 | = | ₹ 10,000 |
| Closing Assets | Closing Liabilities | Closing Capital | ||
| ₹ 10,000 | - | ₹ 5,000 | = | ? |
Sujit a small trader provides you with the following details of his business.
| Particulars | 1.4.2017 (₹) | 31.3.2018 (₹) |
| Cash in Hand | 2,000 | 7,000 |
| Debtors | 40,000 | 60,000 |
| Creditors | 50,000 | 80,000 |
| 10% Govt. Bonds | 9,000 | |
| Bank Overdraft | 70,000 | 30,000 |
| Motor Van | 50,000 | 70,000 |
| Furniture | 15,000 | 15,000 |
| Stock | 70,000 | 90,000 |
| Bills Receivable | 70,000 | 90,000 |
Additional information:
1. Sujit withdraws ₹ 5,000 for his personal use, on 1st Oct. 2017.
2. He had also withdrawn ₹ 30,000 for rent of his residential flat.
3. Depreciation Furniture by 10% p.a. and writes off ₹ 1,000 from Motor Van.
4. Charge interest on Drawings ₹ 3,000.
5. 10% Govt. Bonds were purchased on 1st Oct. 2017.
6. Allow interest on capital at 10% p.a.
7. ₹ 1,000 is written off as bad debts and provides 5% p.a. R.D.D. on Debtors.
Prepare Opening Statement of Affairs, Closing Statement of Affairs, and Statement of Profit or Loss for the year ending 31st March 2018.
Mr. Vijay is dealing in the business of fruits. He maintains an accounting record with a single entry. The following figures are taken from his record.
| Particulars | 31.3.2017 (₹) | 31.3.2018 (₹) |
| Building | 50,000 | 60,000 |
| Furniture | 30,000 | 30,000 |
| Plant and Machinery | 20,000 | 40,000 |
| Sundry Debtors | 30,000 | 50,000 |
| Stock | 15,000 | 25,000 |
| Cash Balance | 10,000 | 20,000 |
| Bills Receivable | 5,000 | 10,000 |
| Sundry Creditors | 30,000 | 15,000 |
| Bank Overdraft | 8,000 | |
| Bank Balance | 12,000 |
Additional information:
1. Mr. Vijay introduced ₹ 7,000 as fresh capital.
2. He spent ₹ 40,000 from his business for his daughter’s marriage.
3. Depreciate Building by ₹ 6,000.
4. Create a 5% reserve for doubtful debts on Sundry Debtor.
Prepare:
1. Opening Statement of Affairs.
2. Closing Statement of Affairs
3. Statement of Profit or Loss for the year ended 31.3.2018.
Mr. Suhas commenced his business with the Capital of ₹ 1,50,000 on 1st April 2017. His financial position was as follows as on 31st March 2018, Cash ₹ 20,000, Stock ₹ 15,000, Debtors ₹ 30,000, Premises ₹ 90,000, Vehicles ₹ 45,000, Creditors ₹ 18,500, Bills Payable ₹ 10,000.
Additional information:
1. He brought additional capital ₹ 10,000 on 30th Sept. 2017, Interest on capital is to be provided at 5% p.a.
2. He withdrew ₹ 15,000 for personal use on which interest is to be charged at 5% p.a.
3. Write off Bad debts ₹ 500.
Prepare:
1. Closing Statement of Affairs
2. Statement of Profit or Loss for the year ended 31.3.2018.
Ganesh keeps his books by the Single Entry Method. Following are the details of his business:
| Particulars | 1.4.2016 (₹) | 31.3.2017 (₹) |
| Cash in Hand | 15,000 | 22,000 |
| Cash at Bank | 30,000 | 45,000 |
| Stock | 8,000 | 13,000 |
| Furniture | 20,000 | 20,000 |
| Plant and Machinery | 90,000 | 1,10,000 |
| Building | 50,000 | 50,000 |
| Debtors | 27,000 | 38,000 |
| Creditors | 8,000 | 10,000 |
During the year he has withdrawn ₹ 25,000 for his private purpose and goods of ₹ 3,000 for household use. On 1st Oct. 2016. He sold his household furniture for ₹ 4,000 and deposited the same amount in a business Bank Account.
Provide Depreciation on Plant and Machinery at 10% p.a. (assuming additions were made on 1st Oct. 2016) and Furniture at 5%.
Prepare:
1. Opening Statement of Affairs
2. Closing Statement of Affairs
3. Statement of Profit or Loss for the year ended 31.3.2017.
Peter keeps his books on the Single Entry System. From the following particulars, Prepare Opening and Closing Statement of Affairs and Statement of Profit or Loss for the year ending 31st March 2018.
| Particulars | 31.3.2017 (₹) | 31.3.2018 (₹) |
| Bank Balance | 46,000 | 38,000 |
| Cash Balance | 8,500 | 15,000 |
| Sundry Debtors | 80,000 | 1,30,000 |
| Stock | 70,000 | 1,00,000 |
| Furniture | 18,000 | 18,000 |
| Sundry Creditors | 40,000 | 45,000 |
| Bills Payable | 15,000 | 30,000 |
Additional Information:
1. Peter has withdrawn ₹ 15,000 from the business for his personal use.
2. He has introduced additional capital of ₹ 10,000 in the business on 1st January 2018.
3. Depreciate furniture @ 10% p.a.
4. Maintain reserve for doubtful debts @ 5% on Sundry Debtors.
5. Closing Stock is overvalued by 25% in the books.
