PREPARE THE STATEMENT OF PROFIT AND LOSS AND STATEMENT OF CHANGES IN EQUITY. (DO NOT PROVIDE THE ANSWERS SUCH AS JOURNAL ENTRIES, LEDGER AND TRIAL BALANCE FOR THIS QUESTION)

The Tambani Store Mr and Mrs Tambani have two children, both of which have completed their studies and have gone to different cities for their respective jobs. Mr Tambani had retired from his government service last month. Now he gets a pension of Rs 20000 per month. They live in a small house that belongs to them but is in need for some annual repairs. There is quite some unbuilt area around their house. Both of them have a small land which was being used for agriculture and generating a small income till a few years earlier. As the Tambanis sit and take a look at their finances, they realise that there is a need for a steady income. However, they are too old to work on the agriculture land. After several deliberations, they finally come to the conclusion that they can possibly start a small general store in front of their house. They have Rs 50000 in hand. So on Jan 1, 2021, they decide to go forward with their plans. Each of them buy 2500 shares of Rs 10 each for a total sum of Rs. 50000. They build a small enclosure in front of their house for Rs. 20000 and buy some racks and desks for Rs 10000. They also buy goods worth Rs 15000 to fill up those racks. They spend Rs 1000 on the printing and distribution of pamphlets announcing the opening of their store. Finally, they inaugurate their small store on Feb 1, 2021. They keep the record of all the purchases in a register with the quantity and amount. They also arrange all the goods according to their category in the racks. Since the Tambanis were busy earlier, they are not in close contact with many people. However, they are a very friendly and kind couple. Their customers love them. The Tambanis are very particular about keeping good quality products. They also render good advice to the customers on the choice of products. During February month, they are not able to attract many customers. During the month of February, they purchased an additional inventory of Rs 60000. Since some inventory is perishable, they are forced to throw away spoiled products costing Rs. 9000. As the sales were very slow to pick up they were able to sell only goods costing Rs. 50000 for Rs. 70000. Some customers returned goods worth Rs 4000 costing Rs 3500. On March 12th, they received telephone and electricity bills of Rs 500 which they paid for on March 15th. The Tambanis were confident of improving their sales in the coming months as the customers were happy. They entered into an agreement with KR bakery and AK Stores, a wholesale fruits and vegetable vendor for supplying on credit. During March they purchased Rs 160000 worth of goods of which Rs 40000 were on credit (Rs. 20000 from KR Bakery and remaining from AK Stores). They sold Rs 200000 worth of goods costing Rs 150000, of which Rs 50000 were on credit as the customers started keeping an account with the store. During the month, the Tambanis collected Rs 20000 from customers, paid Rs 10000 to KR Bakery and Rs 10000 to AK Stores. Customers returned goods worth Rs 10000 costing Rs 8000. These were credit sales. There was a pilferage of Rs 15000. On April 12, they received telephone and electricity bills of Rs 600 which they paid for on April 15th. As the inventory increased, the risk of loss also increased. So the Tambanis took a fire insurance for one year at a premium of Rs 1200. During the month the sales were as under: Customer KJ Stores PJ Stores Others Total Amount 300000 300000 150000 Cash 100000 100000 150000 Credit 200000 200000 Cost 200000 200000 100000 Loss due to pilferage was Rs 20000. Customers returned goods. The details are: Customer Total Amount Cost KJ Stores 10000 8000 PJ Stores 10000 6000 Others 2000 1500 Telephone and electricity bill received Rs 700. At the end of April, 2021 the Tambanis decided to analyse the performance of the business, and the possibility of drawing salary and calling their son to join the business