Rakesh started business on 1st Jan 2018 and had not maintained any kind of books to record transactions. On 30th June 2019 he spoke to his friend and discussed he is confused, do not know whether business making profit or loss. His friend asked him to consult you, as you are accountant and would help in maintaining the books of accounts. He approached you for the help, you have asked him about various transactions he had for last six months. Based on the following information which you have collected from his record, you are required to prepare the financial statement for business as on 30th June 2019 and also comment on his business using ratios. He revealed to you as 1st Jan 2019 the following: Cash Rs.8000, Bank Balance Rs.25000, Stock Rs.20000, Building Rs.10000, Furniture Rs.2000, Ajay (Debtor) Rs.2000, Anil (Debtor) Rs.1000, Kumar (Debtor) Rs.2000, Joseph (Creditor) Rs.5000, Loan taken from Karan Rs.10000. He also brings to your notice the transactions for the last six months. Jan 10 Goods worth Rs.5000 purchased less trade discount 20%, cash discount 5% Jan 14 Received in full settlement Rs.1980 from Ajay Jan 25 Bought goods worth Rs.5000 from Bharath Feb 4 Bought plant for Rs.5000 from Suresh, paid cartage charges of Rs.100 and installation charges of Rs.300 Feb25 Goods worth Rs.6000 sold to Mahesh Feb 28 Goods worth Rs.10000 sold to Rohit for cash Mar 14 Able to get only 50 paise in rupee from Mahesh, as he became insolvent Mar 30 Salary paid to Akash Rs.2000 Apr 5 Rs.4800 paid to Joseph in full settlement Apr 25 Received interest Rs.200 from Kumar May 5 Interest paid Rs.500 to Karan May 10 Goods sold for cash Rs.5000 June 15 Goods worth Rs.200 withdrew for personal use June 25 Issued cheque of Rs.5000 to Suresh towards payment June 28 Cleared the Karan’s loan by Cheque. As on 30th June 2019 goods worth Rs.21000 is in stock.
Rakesh started business on 1st Jan 2018 and had not maintained any kind of books to record transactions. On 30th June 2019 he spoke to his friend and discussed he is confused, do not know whether business making profit or loss. His friend asked him to consult you, as you are accountant and would help in maintaining the books of accounts. He approached you for the help, you have asked him about various transactions he had for last six months. Based on the following information which you have collected from his record, you are required to prepare the financial statement for business as on 30th June 2019 and also comment on his business using ratios.
He revealed to you as 1st Jan 2019 the following:
Cash Rs.8000, Bank Balance Rs.25000, Stock Rs.20000, Building Rs.10000, Furniture Rs.2000, Ajay (Debtor) Rs.2000, Anil (Debtor) Rs.1000, Kumar (Debtor) Rs.2000, Joseph (Creditor) Rs.5000, Loan taken from Karan Rs.10000.
He also brings to your notice the transactions for the last six months.
Jan 10 Goods worth Rs.5000 purchased less trade discount 20%, cash discount 5%
Jan 14 Received in full settlement Rs.1980 from Ajay
Jan 25 Bought goods worth Rs.5000 from Bharath
Feb 4 Bought plant for Rs.5000 from Suresh, paid cartage charges of Rs.100 and installation charges of Rs.300
Feb25 Goods worth Rs.6000 sold to Mahesh
Feb 28 Goods worth Rs.10000 sold to Rohit for cash
Mar 14 Able to get only 50 paise in rupee from Mahesh, as he became insolvent
Mar 30 Salary paid to Akash Rs.2000
Apr 5 Rs.4800 paid to Joseph in full settlement
Apr 25 Received interest Rs.200 from Kumar
May 5 Interest paid Rs.500 to Karan
May 10 Goods sold for cash Rs.5000
June 15 Goods worth Rs.200 withdrew for personal use
June 25 Issued cheque of Rs.5000 to Suresh towards payment
June 28 Cleared the Karan’s loan by Cheque.
As on 30th June 2019 goods worth Rs.21000 is in stock.
Step by step
Solved in 5 steps with 10 images
