21 September 2013
A person has small proprietorship business. He has following details:- Capital............20000 Profit...............60000 Total...............80000 Cash.............30000 Current A/c...25000 Bank..............25000 Total.............80000 The current account is nothing but the amount withdrawn for personal use. This account is to be adjusted against capital after transferring profit to capital on 31st march as follows:- Profilt and loss Dr...............60000 To capital.................................................60000 Capital A/c Dr...........................25000 To Current account.....................................25000 Closing capital=20000+60000-25000=55000 My query is:- In Balance sheet part how much capital is to be shown Rs.20000 or Rs.55000?? Profit of Rs.60000 to be shown in reserves and surplus or to be shown after adjusting into capital?
21 September 2013
No. As you would have already filled P&L schedule of ITR4. And whiling filling proprietory balance sheet you need not to show Profit seperately.
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