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Priya started a retail business selling premium smartphones on September 1, 2025, investing ₹6,00,000 from personal savings and securing a ₹2,00,000 bank loan. She incurred various expenses including rent, salaries, and purchases, and sold 18 smartphones during September. The task is to compute her profit or loss for the month, considering loan interest, depreciation, and other expenses.

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6 views1 page

Question

Priya started a retail business selling premium smartphones on September 1, 2025, investing ₹6,00,000 from personal savings and securing a ₹2,00,000 bank loan. She incurred various expenses including rent, salaries, and purchases, and sold 18 smartphones during September. The task is to compute her profit or loss for the month, considering loan interest, depreciation, and other expenses.

Uploaded by

ayushinim11
Copyright
© All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd

Submission deadline: 4:00 PM on July 1, 2025

Question
On 1st September 2025, Priya started a retail business dealing in premium smartphones in her
hometown. She brought in ₹6,00,000 from her personal savings and also secured a bank loan
of ₹2,00,000 at 10% per annum, repayable in 10 equal monthly instalments starting from
October 2025. She rented a compact showroom at a monthly rent of ₹35,000 and paid three
months’ rent in advance on the first day itself. Priya then opened a current account and
deposited ₹6,00,000 into the bank.
On 2nd September, she purchased furniture worth ₹1,50,000, which she paid for by cheque.
The expected useful life of the furniture is six years (assume straight-line depreciation). She
appointed Raghav as a sales assistant on a salary of ₹12,000 per month, payable on the first
day of the next month.
On 5th September, she bought 30 smartphones @ ₹25,000 each from TechWorld Pvt. Ltd. She
paid ₹4,00,000 via cheque and agreed to pay the remaining amount within 45 days. During the
month, Priya sold 18 smartphones @ ₹32,000 each. Out of these, 12 were sold for cash and 6
on credit (recoverable next month). All cash received from sales was deposited into the bank.
Later in the month, she paid ₹1,50,000 to TechWorld toward the outstanding amount by cheque.
Her other expenses for the month included ₹8,500 towards business operations and ₹12,000
for household expenses, both paid from the bank.
You are required to compute the profit or loss made by Priya during the month of
September 2025. Consider one month’s interest on the loan, one month’s depreciation on
furniture, and account properly for advance rent. Also, value the closing stock at cost, and
ignore taxes for simplicity.

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