Page 183 - DEBK-XI(2020)

Accounts from Incomplete Records—Single Entry System 20.11

X had withdrawn ` 2,500 per month during the year but has introduced additional Capital
of ` 20,000. A provision of 5% on Sundry debtors was necessary. Depreciation on plant was
written off 10%. Interest on Capital to be allowed @ 5% per annum.
[Opening Capital—` 1,45,000; Closing Capital—` 2,27,200;
Net Profit—` 71,850.]
[Hint: Net Profit = ` 2,27,200 (Closing Capital) + ` 30,000 (Drawings) – ` 1,45,000
(Opening Capital) – ` 20,000 (Additional Capital) – ` 3,100 (Provision
on Debtors) – ` 10,000 (Depreciation) – ` 7,250 (Interest on Capital)
= ` 71,850.]
10. X, who keeps his books on Single Entry System, tells you that his capital on 31st March,
2018 is ` 18,700 and his capital on 1st April, 2017 was ` 19,200. He further informs you
that during the year he withdrew for his household purposes ` 8,420. He once sold his
investment of ` 2,000 at 2% premium and brought that money into the business.
You are required to prepare a Statement of Profit or Loss. [Profit for the year—` 5,880.]
11. Mr. Abdul started a business on 1st April, 2017 with a capital of ` 20,000. Finding it
inadequate, he brought in fresh capital of ` 4,000 on 1st May, 2017. On 31st March, 2018,
his assets were: `
Furniture ................................................................................................................................................. 5,000
Stock ................................................................................................................................................. 17,000
Sundry Debtors ................................................................................................................................................. 7,400
Cash at Bank ................................................................................................................................................. 2,400
Cash in Hand ................................................................................................................................................. 600
Sundry Creditors at this date totalled ` 9,600. He found that he had withdrawn ` 7,600 to
meet his household expenses.
Ascertain the profits earned by him during the year. [Profit—` 6,400.]
12. Calculate the value of Closing Stock from the following information: `
Purchases 93,000
Wages 20,000
Sales 1,20,000
Carriage Outwards 3,200
Opening Stock 16,000
Rate of Gross Profit 25% on Cost.
(Delhi 2008)
[Closing Stock—` 33,000.]
[Hint: Let the Cost = ` 100; Gross Profit = 25% of Cost, i.e., ` 25.
Sales = Cost + Profit = ` 100 + ` 25 = 125;
Gross Profit on Sales = ` 25/` 125 or 1/5 on Sales
= ` 1,20,000 × 1/5 = ` 24,000.]