Page 251 - ISCDEBK-XI

Accounts from Incomplete Records 22.9
3. Ramesh owns a general store in Delhi and does not maintain his accounts as per Double Entry System. His
assets and liabilities on 1st April, 2021 were as follows:
Bills Payable ` 2,000; Creditors ` 3,310; Stock and Debtors ` 18,600; Bank and Cash ` 6,710 and Machine
` 15,000.
His position on 31st March, 2022 was as follows:
Machine ` 15,000; Debtors ` 9,320; Motor Cycle ` 12,000; Cash in Hand ` 3,000; Bank balance as per bank
statement ` 5,930; Stock ` 13,400 and Creditors ` 8,700.
During the year he had withdrawn ` 4,500 for household needs and a motor cycle was purchased for
business use. A cheque of ` 700 issued in March, 2022 was not presented up to 31st March, 2022. Ascertain
the amount of profit of the trader for the year ended 31st March, 2022 after making the following adjustments:
(i) Write off ` 400 as bad debts and provide 5% provision for doubtful debts.
(ii) Provide 8% depreciation on machine and 10% on motor cycle.
(iii) Capital introduced during the year ` 5,000.
Also, prepare the Statement of Affairs as on 31st March, 2022 after incorporating all adjustments.
4. Suresh had ` 3,00,000 in bank on 1st January, 2021 when he started his business. He closed his books of
account on 31st March, 2022. His single entry books (in which he did not maintain any account for the
bank) showed his position as follows:
31st March, 2021 31st March, 2022
` `
Cash in Hand 2,000 3,000
Stock in Trade 19,000 29,000
Debtors 1,000 2,000
Creditors 5,000 3,000
On 1st April, 2021, he began drawing ` 700 per month for his personal expenses from the Cash Book of the
business. His account in the bank had the following entries:
Deposits Withdrawals
` `
1st January 2021 3,00,000 ...
1st January 2021 to 31st March, 2021 ... 2,23,000
1st April, 2021 to 31st March, 2022 2,30,000 2,70,000
The above withdrawals included payments by cheques of ` 2,00,000 and ` 60,000 respectively during the
period from 1st January, 2021 to 31st March, 2021 and on 1st March, 2022 for the purchase of machinery
for the business. The deposits after 1st January, 2022 consisted wholly of sale price received from customers
by cheques.
Draw up Suresh’s Statement of Affairs as at 31st March, 2021 and 31st March, 2022 respectively and work
out his profit or loss for the year ended 31st March, 2022.

GUIDE TO ANSWERS

1. [Hint: Capital (31st March, 2022) (before Adjustments)—` 1,88,600.
Gross Profit (Trading Profit before Adjustments)—` 44,960.
Total of Statement of Affairs (After Adjustments)—` 2,00,360.]
Note: As the date of purchase of Machinery and Furniture is not given, depreciation is to be charged
on average basis, i.e., for 6 months. Depreciation on Machinery—` 3,250; Depreciation on
Furniture—` 1,100.