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20.2 Double Entry Book Keeping—CBSE XI

STATEMENT OF AFFAIRS
as at ...
Liabilities ` Assets `
Sundry Creditors ... Cash in hand ...
Outstanding Expenses ... Cash at Bank ...
Bank Overdraft ... Sundry Debtors ...
Capital (Balancing Figure) ... Stock ...
Prepaid Expenses ...
Fixed Assets ...
... ...

Step 2: Add: Drawings for the period to the closing capital (calculated as per Step 1)
Step 3: Deduct: the amount of Capital introduced from the closing capital (Step 1)
Step 4: Calculate opening Capital by preparing a statement of affairs at the beginning of
the accounting period.
Step 5: Calculate Profit or Loss by deducting opening capital from the adjusted closing capital.
Adjusted Closing Capital = Closing Capital + Drawings – Capital introduced during
the year.
Step 6: Ascertain Profit or Loss by deducting opening capital from adjusted closing capital.
Step 7: Make Adjustment for the items not yet adjusted while calculating closing capital
e.g., Depreciation, outstanding/prepaid expenses etc.

STATEMENT OF PROFIT OR LOSS for the year ended...
Particulars `
Capital at the end ...
Add: Drawings (whether in cash or kind) during the accounting period ...
...
Less: Additional Capital introduced (whether in cash or in kind) during the year ...
Adjusted Capital at the end ...
Less: Capital in the beginning ...
Profit (if Adjusted Capital is more than the Opening Capital)
or Loss (if Adjusted Capital is less than the Opening Capital) ...

Solved Questions

1. Calculate the missing value (figure): `

Capital in the beginning 30,000
Profit made during the year 5,000
Drawings 10,000
Capital introduced during the year 15,000

Capital at the end ?