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Accounts from Incomplete Records—Single Entry System 20.9

X had withdrawn ` 2,500 per month during the year but has introduced additional Capital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.
[Ans.: 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,
2024 is ` 18,700 and his capital on 1st April, 2023 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.
[Ans.: Profit for the year—` 5,880.]
11. Mr. Abdul started a business on 1st April, 2023 with a capital of ` 20,000. Finding it
inadequate, he brought in fresh capital of ` 4,000 on 1st May, 2023. On 31st March, 2024,
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 He found that he had withdrawn ` 7,600 to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. [Ans.: Profit—` 6,400.]