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20.6 Double Entry Book Keeping—CBSE XI

` 3,000 for domestic purposes. In September, 2023, he had received a lottery prize of
` 6,000, which he invested in the business. He sold his personal car for ` 7,000 and the
proceeds were utilised for business. He wants his furniture to be depreciated at 10%
and a provision for doubtful debts to be created at 5%. He had not paid two months’
salary to his peon @ ` 225 per month and two months’ rent outstanding amounting to
` 300. Commission earned but not received by him was ` 3,600.
Prepare Statement of Profit or Loss for the year ended 31st March, 2024.

Solution: Calculation of Opening Capital:
STATEMENT OF AFFAIRS (OPENING) as at 1st April, 2023
Liabilities ` Assets `
Balance at Bank (Bank Overdraft) 3,150 Cash in Hand 150
Sundry Creditors 39,000 Stock-in-Trade 22,500
Capital (Opening) (Balancing Figure) 40,500 Sundry Debtors 45,000
Furniture 7,500
Investments 7,500
82,650 82,650
Calculation of Closing Capital:

STATEMENT OF AFFAIRS (CLOSING) as at 31st March, 2024
Liabilities ` Assets `
Sundry Creditors 41,250 Cash in Hand 600
Loan from Mr. Faithful 4,500 Balance at Bank 8,400
Outstanding Salaries (` 225 × 2) 450 Accrued Commission 3,600
Outstanding Rent 300 Stock-in-Trade 30,000
Capital (Closing) (Balancing Figure) 53,900 Sundry Debtors 42,800
Furniture 7,500
Investments 7,500
1,00,400 1,00,400

STATEMENT OF PROFIT OR LOSS for the year ended 31st March, 2024
Particulars `
Capital at the end (Closing Capital) 53,900
Add: Drawings during the year (WN 1) 14,550
68,450
Less: Opening Capital 40,500
Capital introduced during the year (WN 2) 13,000 53,500
Profit before Adjustment 14,950
Less: Adjustments:
(i) Depreciation on Furniture (10% of ` 7,500) 750
(ii) Provision for Doubtful Debts (5% of ` 42,800) 2,140 2,890
Net Profit for the year 12,060