Mr Kothari does not keep complete records of his business but gives you the following information: His
Question:
Mr Kothari does not keep complete records of his business but gives you the following information:
His assets on 31.3.2015 consisted of Machineries ~ 1,50,000; Furniture ~ 60,000; Motor Car ~ 40,000; Stock-in-trade~ 50,000; Debtors ~ 80,000; Cash in hand ~ 12,000 and Cash at Bank ~ 30,000; Creditors on that date amounted to~ 1,20,000.
On further information received, you come to know that:
On 1.10.2014 he purchased a new machinery costing ~ 50,000.
Sales are made for cash as well as on credit. There is no cash purchases. He always sells his goods at cost plus 25%.
Cash sales for the year 2014-15 were accounted for ~ 80,000. During the year 2014-15 collection from debtors amounted to ~ 5,00,000 and a sum of ~ 4,25,000 was paid to creditors. He obtained a Bank loan for ~ 50,000 on 1.2.2014. The entire amount was repaid in February, 2015 with interest ~ 2,500. In November, 2014 his life insurance policy for ~ 50,000 became matured and the same was invested in the business. His drawings were ~ 2,500 p.m. all through the year.
On 1.4.2014 he had ~ 1,500 as cash in hand and balance at bank for ~ 40,000. Debtors and Creditors on that date amounted to ~ 60,000 ad ~ 90,000 respectively.
Provide depreciation on Machineries @ 15% p.a., on Furniture @ 10% p.a. and on Motor Car @ 20% p.a. Mr Kothari requests you to prepare a statement of Profit & Loss for the year ended 31.3.2015.
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