Question

C maintains his books according to Single Entry System. Following figures were available from the books for the six months ended 31st December 2017:

Adjustments:
(a) He had withdrawn Rs. 200 in the beginning of every month for household purposes.
(b) Depreciation on Plant and Machinery @ 10% p.a.
(c) Further Bad Debts Rs. 5,000 and Provision for Doubtful Debts to be created @ 2%.
(d) During the period, salaries have been prepaid by Rs. 500 while wages outstanding were Rs. 1,000.
(e) Interest on drawings to be reckoned @ 6% p.a.
You are required to prepare the Statement of Profit or Loss for the half year ended 31st December, 2017, followed by Revised Statement of Affairs as on that date.

Answer 1

Working Notes:

1. Calculation of Deprecation for plant and Machinery

Amount of Depreciation on plant machinery would be changed (for 6 months)

2. Calculation of Provision for Doubtful Debts

Amount of Provision for Doubtful Debts