Ascertainment of Profit/Loss by Statement of Affairs Method
- Following information of an accounting year is given:
Opening Capital Rs.60,000;
Drawings Rs.5,000;
Capital added during the year Rs.10,000
Closing Capital Rs.90,000
Calculate the Profit or Loss for the year.
Solution:-
2. Pankaj maintains his books of account on Single Entry System. He provides following information from his books. Find out additional capital introduced in the business during the year 2024 – 25.
Opening Capital Rs.1,30,000
Closing Capital Rs.2,00,000
Drawings during the year Rs.50,000
Profit made during the year Rs.1,00,000
Solution:-
3. Sunil does not maintain the proper records of his business, he gives you the following information:
Opening Capital Rs.1,00,000
Closing Capital Rs.1,25,000
Drawings during the year Rs.30,000
Capital added during the year Rs.37,500
Solution:-
4. Capital of Pankaj Gupta in the beginning of the year was Rs.70,000. During the year his business earned a profit of Rs.20,000, he withdrew Rs.7,000 for his personal use. He sold ornaments of his wife for Rs.20,000 and invested that amount into the business.
Find out his Capital at the end of the year.
Solution:-
Calculate of closing capital
Given : Opening Capital = Rs.70,000
Profit = Rs.20,000
Drawings = Rs.7,000
Additional capital = Rs.20,000
Profit = closing capital + Drawings – Additional Capital – Opening Capital
20,000 = Closing capital + 7,000 – 20,000 – 70,000
Closing Capital = 20,000 – 7,000 + 20,000 + 70,000
= Rs.1,03,000
5. Vikas maintains book on Single Entry System. He gives you the following information:
Capital on 1st April, 2024 Rs.15,200
Capital on 31st March, 2025 Rs.16,900
Drawings made during the year Rs.4,800
Capital introduced on 1st August, 2024 Rs.2,000
You are required to calculate the Profit or Loss made by Mohan.
Solution:-
Statement of profit or loss for the year ended 31st March
6. Gurman who keeps his books on Single Entry System sells goods at Cost plus 50%. On 1st April, 2024, his Capital was Rs.4,00,000 and on 31st March, 2025 it was Rs.3,50,000. He had withdrawn Rs.20,000 per month besides goods of the sale value of Rs.60,000.
How much did he earn in 2024 – 25?
Solution:-
Statement of profit or loss for the year ended 31st March
Working Note:
Calculation of Drawing
Sales = cost + Profit
60,000 = cost + (cost + 50%)
60,000 = Cost + cost + ½
60,000 = 2 cost + Cost /2
120,000 = 2 Cost + Cost
120,000 = 3 Cost
120,000 / 3 = Cost
40,000 = Cost
So Case is = 40,000
Drawing = 20,000 x 12
Cash = 240,000
Cost of Goods taken = + 40,000
280,000
7. Krishan started his business on 1st April, 2024 with a capital of Rs.1,00,000. On 31st March, 2025, his assets were:
Cash ……………………………………………………….. Rs.3,200
Stock ……………………………………………………… Rs.34,800
Debtors …………………………………………………. Rs.31,000
Plant ………………………………………………………. Rs.85,000
He owed Rs.12,000 to sundry creditors and Rs.10,000 to his brother on that date. He withdrew Rs.2,000 per month for his personal expenses. Ascertain his profit.
Solution:-
8. Muneesh maintains his accounts as per Single Entry System and from them and the particulars supplied, the following figures were gathered together on 31st March, 2025:
Book Debts Rs.10,000
Cash in Hand Rs.510
Stock-in-Trade (estimated) Rs.6,000
Furniture and Fittings Rs.1,200
Trade Creditors Rs.4,000
Bank Overdraft Rs.1,000
Muneesh stated that he started business on 1st April, 2024 with cash Rs.6,000 paid into bank but stocks valued at Rs.4,000. During the year he estimated his drawings to be Rs.2,400. You are required to prepare the statement, showing the profit for the year, after writing off 10% for Depreciation on Furniture and Fittings.
Solution:-
Opening capital =assets-liabilities
Assets=cash in bank+ stock
6000+4000
10,000
Liabilities=0
So opening capital=10,000-0
10,000
9. Sarvesh maintains his books of account from Incomplete Records. His books provide the following information:
He withdrew Rs.500 per month for personal expenses. He sold his Investments of Rs.16,000 at 5% premium and introduced the amount into business. You are required to prepare a Statement of Profit or Loss for the year ending 31st March, 2025.
Solution:-
Statement of profit or loss for the year ended 31st March
10. Mahesh commenced business on 1st April, 2024 with a capital of Rs.10,000. He immediately bought Furniture and Fixtures for Rs.2,000. On 1st October, 2024, he borrowed Rs.5,000 from his wife @ 9% p.a. (interest not yet paid) and also introduced further capital of his own of Rs.1,500. He drew @ Rs.300 per month at the end of each month for household expenses. On 31st March, 2025 his position was as follows:
Cash in Hand Rs.2,800
Sundry Debtors Rs.6,400
Stock Rs.6,800
Sundry Creditors Rs.500
Owing for Rent Rs.1,50
Furniture and Fixtures to be depreciated by 10%. Ascertain the profit earned or loss incurred by Mahesh during the year ended 31st March, 2025.
Solution:-
Statement of profit or loss for the year ended 31st March
11. Swastik maintains his books of account by Single Entry System. His book provide the following information:
His drawings during the year were Rs.5000. Depreciate furniture by 10% and provide a reserve for Bad and Doubtful Debts at 10% on Sundry Debtors. Prepare the statement showing the profits for the year.
Solution:-
Statement of profit or loss for the year ended 31st March
12. Kuldeep, a general merchant, keeps his accounts on Single Entry System. He wants to know the results of his business on 31st March, 2025 and for that following information in available.
During the year, he had withdrawn Rs.5,00,000 for his personal use and invested Rs.2,50,000 as additional capital. Calculate his profits on 31st March, 2025 and prepare the Statement of Affaires as on that date.
Solution:-
Statement of profit or loss for the year ended 31st March
13. From the following information relating to the business of Abhay who keeps books on Single Entry System, ascertain the profit or loss for the year 2024 – 25:
Abhay withdrew Rs.4,100 during the year to meet his household expenses. He introduced Rs.300 as fresh capital on 15th January, 2025. Machinery and Furniture are to be depreciated at 10% and 5% p.a. respectively.
Solution:-
Statement of profit or loss for the year ended 31st March
14. Following information is supplied to you by a shopkeeper:
During the year, he withdrew Rs.2,500 per month for domestic purposes. He also borrowed from a friend at 9% a sum of Rs.20,000 on 1st October, 2024. He has not yet paid the interest. A Provision of 5% on debtors for doubtful debts is to be made. Ascertain the profit or loss made by him during the period.
Solution:-
Statement of profit or loss for the year ended 31st March
15. Vikas is keeping his accounts according to Single Entry System. His capital on 31st March, 2024 was Rs.2,50,000 and his capital on 31st March, 2025 was Rs.4,25,000. He further informs you that during the year he gave a loan of Rs.30,000 to his brother on private account and withdrew Rs.1,000 per month for personal purposes. He used a flat for his personal purpose, the rent of which @ Rs.1,800 per month and electricity charges at an average of 10% of rent per month were paid from the business account. During the year, he sold his 7% Government Bonds of Rs.50,000 at 1% premium and brought that money into the business. Prepare a Statement of Profit or Loss for the year ended 31st March, 2025.
Solution:-
Statement of profit or loss for the year ended 31st March
Working Note:-
Drawings = Loan to brother from private account + withdrew for personal expenses + Rent electricity charges
= 30,000 + (1,000 x 12) + (1800 x 12)+(1800×12=21600×10%)
= 30,000 + 1,000 x 12 + (1800 x 10%) x 12
= 65760
Additional capital = Sold 7% government bond at 1% premium
= 50,000 + 1% of 50,000
= 50,000 + 500
= 50500
16. Kavish, a retailer, has not maintained proper books of account but it has been possible to obtain the following details:
Calculate the net profit for this year and draft the Statement of Affairs at the end of the year after noting that:
- Shop Fitting are to be depreciation by Rs.780.
- Kavish has drawn Rs.100 per week for his own use.
- Included in the Trade Debtors is an irrecoverable balance of Rs.270.
- Interest at 5% p.a. is due on the loan from Naresh but has not been paid for the year.’
Solution:-
Statement of profit or loss for the year ended 31st March
17. On 1st April, 2024, X started a business with Rs.40,000 as his capital. On 31st March, 2025, his position was as follows:
Creditors Rs.40,000
Bank Rs.10,000
Debtors Rs.50,000
Stock Rs.40,000
Plant Rs.68,000
Furniture Rs.12,000
During the year 2024-25, X drew Rs.24,000. On 1st October, 2024, he introduced further capital amounting to Rs.30,000. You are required to ascertain profit or loss made by him during the year 2024 – 25.
Adjustments:
- Plant is to be depreciation at 10%.
- A provision of 5% is to be made against debtors.
Also prepare the Statement of Affaires as on 31st March, 2025.
Solution:-
Statement of profit or loss for the year ended 31st March
18. Akashdeep does not keep records as per Double Entry System. He provides the following information:
Drawing Rs.10,000 p.m. for personal use, fresh capital introduced during the year Rs.2,00,000. Bad Debts amounted to Rs.2,000 and a provision of 5% is to be made on debtors. Outstanding salary Rs.2,400, prepaid insurance Rs.700, depreciation charged on furniture and machine @ 10%. You are required to prepare Statement of Profit & Loss for the year ending 31st March, 2025 and Adjusted Statement of Affaires as on the date.
Solution:-
Statement of profit or loss for the year ended 31st March
