2. Mr. Kothari does not keep complete records of his business but gives you the following information : His assets on 31.03.2015 consisted of Machineries Rs. 1,50,000; Furniture Rs. 60,000; Motorcar Rs. 40,000; Stock – in- trade Rs. 50,000; Debtors Rs. 80,000 ; Cash in hand Rs. 12,000 and Cash at Bank Rs.30,000; Creditors on that date amounted to Rs. 1,20,000.On further information received, you come to know that: On 1.10.2014 he purchased a new machinery costing Rs. 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- 2015 were accounted for Rs.80,000. During the year 2014 -15 collection from debtors amounted to Rs. 5,00,000 and a sum of Rs.4,25,000 was paid to creditors. He obtained a Bank loan for Rs. 50,000 on 1.02.2014. The entire amount was repaid in February, 2015 with interest Rs. 2,500. In November, 2014 his life insurance policy for Rs. 50,000 became matured and the same was invested in the business. His drawings were Rs. 2,500 p.m. all through the year. On 1.4.2014 he had Rs. 1,500 as cash in hand and balance at bank for Rs.40,000. Debtors and Creditors on that date amounted to Rs. 60,000 and Rs.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 ended

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

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2. Mr. Kothari does not keep complete records of his business but gives you the following information : His assets on 31.03.2015 consisted of Machineries Rs. 1,50,000; Furniture Rs. 60,000; Motorcar Rs. 40,000; Stock – in- trade Rs. 50,000; Debtors Rs. 80,000 ; Cash in hand Rs. 12,000 and Cash at Bank Rs.30,000; Creditors on that date amounted to Rs. 1,20,000.On further information received, you come to know that: On 1.10.2014 he purchased a new machinery costing Rs. 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- 2015 were accounted for Rs.80,000. During the year 2014 -15 collection from debtors amounted to Rs. 5,00,000 and a sum of Rs.4,25,000 was paid to creditors. He obtained a Bank loan for Rs. 50,000 on 1.02.2014. The entire amount was repaid in February, 2015 with interest Rs. 2,500. In November, 2014 his life insurance policy for Rs. 50,000 became matured and the same was invested in the business. His drawings were Rs. 2,500 p.m. all through the year. On 1.4.2014 he had Rs. 1,500 as cash in hand and balance at bank for Rs.40,000. Debtors and Creditors on that date amounted to Rs. 60,000 and Rs.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 ended

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