Class 10 Elements Of Book Keeping And Accountancy - Accouting From Incomplete Records

The following information is given below prepare the Statement of Profit or Loss.

Items (Rs)
Capital at the end of the year $5,00,000$
Capital in the beginning of the year $7,50,000$
Drawings made during the period $3,75,000$
Additional Capital introduced $50,000$

Answer :
Statement of Profit or Loss
for the year ended

Particulars	Amt. (Rs)
Capital at the end of the year	$5,00,000$
(+) Drawings during the year	$3,75,000$
	$8,75,000$
(-) Additional Capital Introduced	$50,000$
	$8,25,000$
(-) Capital at the Beginning of the year	$7,50,000$
Profit made during the year (b/f)	$75,000$

Is it possible to prepare the profit and loss account and the balance sheet from the incomplete book of accounts kept by a trader'? Do you agree? Explain.

Yes, it is possible to prepare the profit and loss account and the balance sheet from the incomplete book of accounts, with the help of Conversion Method. According to this method, first of all incomplete records are converted into double entry records. In case of incomplete records, details of some transactions are easily available like cash sales, cash purchases, creditors, debtors. However there are number of transactions, the details of which may not be available directly. Yet, these details can be found out indirectly or logically.

Things which are required to prepare balance sheet can be ascertained through conversion method in a chronological order as follows.
(i) The first step is to find out the opening capital, If opening capital is not given, opening statement of Affairs will be prepared which gives the Opening Capital.
(ii) The second step is to prepare Cash Book that gives the opening or the closing cash and bank balance.
(iii) The next step is to prepare Total Debtors Account. It is prepared in order to find out one of the missing figures, such as credit sales, opening debtors, closing debtors and cash received from debtors.
(iv) The subsequent step is to prepare. Total Creditors Account to ascertain one of the missing figures, such as credit sales, opening creditors, closing creditors and cash paid to the creditors.
(v) The last step is to prepare final accounts. On the basis of the missing figures ascertained in each of the above steps, along with other mentioned information. Trading and Profit and Loss Account and Balance Sheet can be prepared.

Question : Following information is given below calculate the closing capital

Items Jan 1, 2011
(Rs)
Dec 31, 2011
(Rs)
Creditors $5,000$ $30,000$
Bills Payable $10,000$    ----
Loan    ----- $50,000$
Bills receivable $30,000$ $50,000$
Stock $5,000$ $30,000$
Cash $2,000$ $20,000$

Calculation of profit or loss and ascertainment of statement of affairs at the end of the year (Opening Balance is given)

Note : In the above question, opening and closing balances of capital are not given, so first of all we have to prepare statement of affairs at the beginning and at the end of the year. Then only we will be able to get the profit figure of the year.

Statement of Affairs
   as on 1st January 2011
Liabilities Amt. (Rs) Assets Amt. (Rs)
Creditors $5,000$ Bills receivable $30,000$
Bills Payable $10,000$ Stock $5,000$
Capital (Balancing Figure) $22,000$ Cash $2,000$
$37,000$ $37,000$

Statement of Affairs
as on 31st December, 2011

Liabilities Amt. (Rs) Assets Amt. (Rs)
Creditors $30,000$ Bills Receivable $50,000$
Loan $50,000$ Stock $30,000$
Capital (Balancing Figure) $20,000$ Cash $20,000$

$1,00,000$ $1,00,000$

Statement of Profit or Loss
for the year ended as on 31st December, 2011

Particulars Amt. (Rs)
Capital at the end of the year i.e., December 2011 $20,000$
(-) Capital at the beginning of the year i.e., January 2011 $22,000$
Loss during the year 2011 $2,000$

Answer :
Statement of Affairs
as on 31st December, 2011

Liabilities	Amt.(Rs)	Assets	Amt. (Rs)
Creditors	$3,00,000$	Cash	$30,000$
Loan from friends	$1,00,000$	Stock	$4,70,000$
Capital (b/f)	$4,50,000$	Debtors	$3,50,000$
	$8,50,000$		$8,50,000$

Statement of Profit or Loss Account
as on 31st December 2011

Particulars	Amt. (Rs)
Capital at the end of the year i.e., 31st December 2011	$4,50,000$
(+) Drawings made during the year (8000 x 6 month)	$48,000$
	$4,98,000$
(-) Additional Capital introduced	$75,000$
	$4,23,000$
(-) Capital at the beginning of the year i.e., 1 July 2008	$4,00,000$
Profit made during the year 2011	$23,000$

Explain how the following may be ascertained from incomplete records
(a) Opening capital and closing capital
(b) Credit sales and credit purchases
(c) Payments to creditors and collection from debtors
(d) Closing balance of cash

Answer : Opening Capital and Closing Capital : Opening capital can be ascertained by preparing the statement of affair at the beginning of the year and to ascertain the closing capital we can prepare the statement of affair at the end of the year as follows.
Statement of Affairs
as on .....

Liabilities	Amt. (Rs)	Assets	Amt. (Rs)
Bills Payable	----	Land and Building	---
Creditors	----	Plant and Machinery	---
Outstanding Expenses		Furniture
Capital (Balancing Figure) @		Stock

		Debtors	----
		Cash and Bank	-----
		Prepaid Expenses	---
		Caiptal - Deficiency	----
		(Balancing Figure, if any)	-----
	=		=

(b) Credit Sales and Credit Purchase : Credit sales can be ascertained by preparing the Total Debtors Account whereas total credit purchase can be ascertained through. Total Creditors Account. They are prepared as follows.

Dr Total Debtor's Account Cr

Particulars	JF	Amt. (Rs)	Particulars	JF	Amt.(Rs)
Balance b/d		-----	Cash		-----
Bills Receivable		-----	Bank		-----
(Bills dishonored)			Discount Allowed		-----
Bank (Cheque dishonored)		------	Bad debts		-----
Credit Sales (Balancing Figure)		------	Sales Returns		------
			Bills Receivable
			(Bill Drawn)		---
			Balance c/d		----
		=			=

Dr Total Creditor's Account Cr

Particulars	JF	Amt.(Rs)	Particulars	JF	Amt.(Rs)
Cash		----	Balance b/d		---
Bank		----	Bank
Bills Payable		----	(Cheque Dishonoured)		---
Discount Received		---	Bills Payable (Bills Dishonoured)		---
Purchase Return		---
Balance c/d		---	Credit Purchases		---
			(Balancing Figure)		---
		=			=

(c) Payment to Creditors and Collection from Debtors : Payment to the creditors is ascertained from the Total Creditors Account as a balancing figure and collection from debtors are ascertained from the Total Debtors Account as a balancing figure.

(d) Closing Balance of Cash : Closing balance of cash is ascertained from the Cash Book, which shows all receipts in the debit side and all payments in the credit side during an accounting year and the balancing figure of the cash book is the closing balance of cash.

Manveer started his business on January 01, 2005 with a capital of Rs $4,50,000$ . On December 31, 2005, his position was as under

Items (Rs)
Cash $99,000$
Bills receivable $75,000$
Plant $48,000$
Land and Building $1,80,000$
Furniture $50,000$
He owed Rs $45,000$ from his friend Susheel on that date. He withdrew Rs $8,000$ per month for his household purposes. Ascertain his profit or loss for this year ended December 31, 2005.

Answer :

Statement of Affairs
as on 31st December, 2005

Liabilities	Amt. (Rs)	Assets	Amt. (Rs)
Loan From Susheel	$45,000$	Cash	$99,000$
Capital		Bills Receivable	$75,000$
(Balancing Figure)	$4,07,000$	Plant	$48,000$
		Land and Building	$1,80,000$
		Furniture	$50,000$
	$4,52,000$		$4,52,000$

Statement of Profit or Loss
for the year ended on 31st December, 2005

Particulars	Amt. (Rs)
Capital at the end of the year 31st December 2005	$4,07,000$
(+) Drawings during the year $(8,000 x 12)$	$96,000$
	$5,03,000$
(-) Capital at the beginning of the year 1st Jan 2005	$4,50,000$
Profit made during the year	$53,000$

What is meant by a 'statement of affairs'? How can the profit or loss of a trader be ascertained with the help of a statement of affairs?

Answer : The statement of affairs is a Statement of Assets and Liabilities. A Statement of Affairs almost includes all the items related to the balance sheet, but still is not a balance sheet. The main difference between a Statement of Affairs and a Balance Sheet is that while the former is prepared on the basis of physical counts and improper source documents, the latter is prepared purely on the basis of ledger accounts. Thus, the authentication and relevance of the latter is guaranteed. The excess of assets over liabilities (i.e., balancing figure) is denoted as the capital of the firm. The Preforma of the statement of affairs is presented below.

Statement of Affairs
as on...

Liabilities	Amt. (Rs)	Assets	Amt. (Rs)
Bills Payable	---	Land and Building	---
Creditors	---	Plant and Machinery	---
Outstanding Expenses		Furniture
Capital (Balancing Figure)		Stock	----
		Debtors	----
		Cash and Bank	----
		Prepaid Expenses	----
		Capital - Deficiency
		(Balancing Figure, if any)
	=		=

For ascertaining profit or loss, opening and closing capital balances are always required. Some times it is not given in the question in that case if opening balance of capital is not given, opening statement of affairs is prepared and when closing balance of capital is not given, closing statement is calculated, a Statement of Profit or Loss is being prepared to determine the amount of profit earned or loss incurred during the accounting period. The Proforma of the statement of Profit and Loss is presented below.

Statement of Profit or Loss
for the year ended....

Particulars	Amt. (Rs)
Closing Capital at the end of the year	----
(+) Drawings made during the year	----
(-) Additional capital introduced during the year	----
Adjusted Capital at the end of the year	----
(-) Capital in the beginning of the year	----
Profit (Loss) for the year (Balancing figure)	----

Krishna Kulkarni has not kept proper books of accounts prepare the statement of profit or loss for the year ending December 31, 2005 from the following information.

Items Jan 1, 2005 Dec 31, 2005
Cash in hand $10,000$ $36,000$
Debtors $20,000$ $80,000$
Creditors $10,000$ $46,000$
Bills receivable $20,000$ $24,000$
Bills payable $4,000$ $42,000$
Car ------ $80,000$
Stock $40,000$ $30,000$
Furniture $8,000$ $48,000$
Investment $40,000$ $50,000$
Bank Balance $1,00,000$ $90,000$
The following adjustments were made
(a) Krishna withdrew cash Rs $5,000$ per month for private use.
(b) Depreciation @ $5\%$ on car and furniture @ $10\%$ .
(c) Outstanding rent Rs $6,000$ .
(d) Fresh capital introduced during the year Rs $30,000$ .

Answer :

Statement of Affairs
as on 1st January, 2005

Liabilities	Amt.(Rs)	Assets	Amt.(Rs)
Creditors	$10,000$	Cash in hand	$10,000$
Bills Payable	$4,000$	Debtors	$20,000$
Capital (Balancing Figure)	$2,24,000$	Bills Receivable	$20,000$
		Car	---
		Stock	$40,000$
		Furniture	$8,000$
		Investment	$$40,000
		Cash at Bank	$1,00,000$
	$2,38,000$		$2,38,000$

Statement of Affairs
as on 31st December, 2005

Liabilities	Amt. (Rs)	Assets	Amt. (Rs)
Creditors	$46,000$	Cash in Hand	$36,000$
Bills Payable	$42,000$	Debtors	$80,000$
Outstanding Expenses	$6,000$	Bills Receivable	$24,000$
Capital (Balancing Figure)	$3,35,200$	Car $80,000$ (-) Depreciation @ $5\%$ $4,0000$	$76,000$
		Furniture (-)Depreciation @ $10\%$ $48,000$	$43,200$
		Investment	$50,000$
		Cash at Bank	$90,000$
		Stock	$30,000$
	$4,29,200$		$4,29,200$

Statement Showing Profit or Loss for the Year 2005

Particulars	Amt. (Rs)
Capital at the end of the year on 31st December 2005	$3,35,200$
(+) Drawings during the year $( 5000\times12)$	$60,000$
(-) Fresh Capital Introduced during the year	$3,95,200$ $30,000$
(-) Capital at the Beginning as on 1st Jan 2005	$3,65,200$ $2,24,200$
Profit earned during the year 2005	$1,41,200$

Question : From the following information calculate the Amount to be paid to creditors

(Rs)
Sundry creditors as on March 31, 2005 $1,80,425$
Discount received $26,000$
Discount allowed $24,000$
Return outwards $37,200$
Return Inward $32,200$
Bills accepted $1,99,900$
Bills endorsed to creditors $26,000$
Creditors as on April 1, 2006 $2,09,050$
Total Purchase $8,97,000$
Cash Purchase $1,40,000$

Answer : For getting the figure of cash paid to creditors it would be appropriate to prepare the sundry creditor's account.

Dr Sundry Creditor's Account Cr.

Date	Particulars	JF	Amt.(Rs)	Date	Particulars	JF	Amt. (Rs)
	To Discount Received A/c		$26,000$	2005 Mar 31	By Balance b/d By Purchase		$1,80,425$
	To Return Outward		$37,200$		Credit Purchase only		$7,57,000$
	To Bills Payable A/c		$1,99,000$
	To (Bills endorsed to Creditors) b/R		$26,000$
2006 Apr 1	To Balance c/d		$2,09,050$
	To Cash A/c Cash paid (b/f)		$4,40,175$
			$9,37,425$				$9,37,425$

Working Note

Credit Purchase = Total Purchase - Cash Purchase
Credit Purchase =

$(8,97,000 - 1,40,000) = Rs.7,57,000$
Amount Paid to Creditors =

$Rs4,40,175$

Question : Mr Akshat keep his books on incomplete records following information is given below

Items April 1, 2004 March 31, 2005
Cash in hand $1,000$ $1,500$
Cash at bank $15,000$ $10,000$
Stock $1,00,000$ $95,000$
Debtors $42,500$ $70,000$
Business premises $75,000$ $1,35,000$
Furniture $9,000$ $7,500$
Creditors $66,000$ $87,000$
Bills payable $44,000$ $58,000$

During the year he withdrew Rs $45,000$ and introduced Rs $25,000$ as further capital in the business compute the profit or loss of the business.

Answer :
Note : In the above case opening and closing balance of capital is not given. Hence we have to prepare statement of affair, at the beginning and end of the year

Statement of Affairs
as on 1st April, 2004

Liabilities	Amt. (Rs)	Assets	Amt. (Rs)
Creditors	$66,000$	Cash in Hand	$1,000$
Bills Payable	$44,000$	Cash at Bank	$15,000$
Capital (b/f)	$1,32,500$	Stock	$1,00,000$
		Debtors	$42,500$
		Business Premises
		Furniture	$9,000$
	$2,42,500$		$2,42,500$

Statement of Affairs
as on 31st March, 2005

Liabilities	Amt. (Rs)	Assets	Amt. (Rs)
Creditors	$87,000$	Cash in Hand	$1,500$
Bills Payable	$58,000$	Cash at Bank	$10,000$
Capital (b/f)	$1,74,000$	Stock	$95,000$
		Debtors	$70,000$
		Business Premises	$1,35,000$
		Furniture	$7,500$
	$3,19,000$		$3,19,000$

Statement Showing Profit or Loss for the Year 2005

Particulars	Amt. (Rs)
Capital at the end of the year as on 31st March 2005	$1,74,000$
(+) Drawings during the year	$45,000$
(-) Additional Capital Introduced	$2,19,000$ $25,000$ = $1,94,000$
(-) Capital at the beginning of the year as on 1st April 2004	$1,32,500$

Profit earned during the year

$61,500$

Mrs. Meena of Bilaspur has not kept proper books of accounts, following information is provided to you:
Particulars 31.03.2012
Amount (Rs.) 31.03.2013
Amount (Rs.)
Machinery 50,000 50,000
Furniture 50,000 30,000
Debtors 18,000 25,000
Creditors 18,000 20,000
Stock 30,000 42,000
Outstanding Expenses 1,500 42,000
Pre-paid expenses - -
Cash at bank 28,000 40,000
Further information:
(1) Mrs. Meena introduced additional capital as on $1^{st}$ October, 2012 by selling her personal car is Rs. 10,000
(2) She paid her daughter's college fees from business bank account Rs. 3,000.
(3) Depreciate 2% on debtors for Bad and Doubtful debts.
(3) Interest on capital is to be provided @ 5% p.a. and on drawings @5% p.a.

Prepare: Opening and closing statement of affairs and statement of profit or loss for the year ended $31^{st}$ March, 2013.

Opening Statement of Affairs

As on 1.4.2012

Liabilities	Amount	Assets	Amount
Capital (bal.fig.)	156500	Machinery	50000
Sundry creditors	18000	Furniture	50000
Outstanding expenses	1500	Stock	30000
		Sundry Debtors	18000
		Cash at bank	28000

	176000		176000

Closing Statement of Affairs

As on 31.3.2013

Liabilities	Amount	Assets	Amount
Capital (bal.fig.)	125000	Machinery	50000
Sundry creditors	20000	Furniture	30000
Outstanding expenses	42000	Stock	42000
		Sundry Debtors	25000
		Cash at bank	40000

	187000		187000

Statement of Profit and Loss

For the year ending 31.03.2013

Particulars	Amount
Closing capital	125000
Less: Additional Capital	10000
Add: Drawings	3000
Adjusted closing capital	118000
Less: Opening capital	156500
Loss before adjustment	(38500)
Add: interest on drawings	150
Less: provision for debtors	500
Less: interest on capital	6250
Loss after adjustment	(45100)

Which statement is prepared under single entry system to ascertain profit?

It is prepared under the single entry system in order to find out Profit/Loss need to prepare Profit & loss statement. the amount of opening or closing capital of the business. According to net worth method, profit or loss of the business is determined by making comparison between the capitals of two dates of a period. Statement of affairs is prepared as balance sheet.

Mr. John keeps his books according to single entry system. Following are the details of his business:
Particulars 01.04.2012
Amount (Rs.) 31.03.2013
Amount (Rs.)
Machinery 70,000 70,000
Furniture 10,000 20,000
Stock 36,000 42,000
Sundry debtors 72,200 88,400
Cash in hand 3,000 4,100
Cash at bank 42,000 52,300
Sundry creditors 54,500 60,400

Addition information:
(1) Mr. John had introduced Rs. 20,000 as additional capital on $1^{st}$ October, 2012.
(2) Mr. John had withdrawn Rs. 15,000 for his personal use during the year.
(3) Additions to furniture were made on $1^{st}$ October, 2012.
(4) Deprecate machinery at 10% p.a. and further at 20% p.a.

Prepare:
(1) Opening and closing Statement of Affairs.
(2) Statement of Profit or Loss for the year ending on $31^{st}$ March, 2013.

Opening Statement of Affairs

As on 1.4.2012

Liabilities	Amount	Assets	Amount
Capital (bal. fig.)	178700	Machinery	70000
Sundry Creditors	54500	Furniture	10000
		Stock	36000
		Sundry Debtors	72200
		Cash in hand	3000
		Cash at bank	42000

	233200		233200

Closing Statement of Affairs

As on 31.3.2013

Liabilities	Amount	Assets	Amount
Capital (bal.fig.)	216400	Machinery	70000
Sundry creditors	60400	Furniture	20000
		Stock	42000
		Sundry Debtors	88400
		Cash in hand	4100
		Cash at bank	52300

	276800		276800

Statement of Profit and Loss

For the year ending 31.03.2013

Particulars	Amount
Closing capital	216400
Less: Additional Capital	(20000)
Add: Drawings	15000
Adjusted closing capital	211400
Less: Opening capital	(178700)
Profit before adjustment	32700
Less: depreciation on machinery	(7000)
Depreciation on furniture (2000 + 1000)	(3000)
Profit after adjustment	22700

Question : Mr Arnav does not keep proper records of his business he provided following information. You are required to prepare a statement showing the profit or loss of the year.

Items (Rs)
Capital at the beginning of the year $15,00,000$
Bills receivable $60,000$
Cash in hand $80,000$
Furniture $9,00,000$
Building $10,00,000$
Creditors $6,00,000$
Stock in trade $2,00,000$
Further capital introduced $3,20,000$
Drawings made during the period $80,000$

Prepare Statement of affairs at the end of the year and calculate of profit and loss.

Answer :
Statement of Affairs at the end of the Year

Liabilities	Amt. (Rs)	Assets	Amt. (Rs)
Creditors	$6,00,000$	Bills Receivables	$60,000$
Capital (Balancing Figure)	$16,40,000$	Cash in Hand	$80,000$
		Furniture	$9,00,000$
		Buildings	$10,00,000$
		Stock in Trade	$2,00,000$
	$22,40,000$		$22,40,000$

Statement Showing Profit or Loss for the Year

Particulars	Amt. (Rs)
Capital at the end of the year	$16,40,000$
	$80,000$
(-) Capital Introduced during the year	$17,20,000$
	$3,20,000$
(-) Capital at the beginning of the year	$14,00,000$ $15,00,000$

Loss during the year	$1,00,000$

Question : Gopal does not keep proper records in the books of account. Following information is given below.

Items Jan 1, 2005 Dec 31, 2005
Cash in hand $18,000$ $12,000$
Cash at bank $1,500$ $2,000$
Stock in trade $80,000$ $90,000$
Sundry Debtors $36,000$ $60,000$
Sundry Creditors $60,000$ $40,000$
Loan $10,000$ $8,000$
Office equipments $25,000$ $30,000$
Land and Buildings $30,000$ $20,000$
Furniture $10,000$ $10,000$

During the year he introduced Rs $20,000$ and withdrew Rs $12,000$ from the business. Prepare the statement of profit or loss on the basis of given information.

Answer :

Statement of Affairs
as on 1st January, 2005

Liabilities	Amt.(Rs)	Assets	Amt. (Rs)
Sundry Creditors	$60,000$	Cash in Hand	$18,000$
Loan	$10,000$	Cash at Bank	$1,500$
Capital (Balancing Figure)	$1,30,500$	Stock in trade	$80,000$
		Sundry Debtors	$36,000$
		Office equipments	$25,000$
		Land and Buildings	$30,000$
		Furniture	$10,000$
	$2,00,500$		$2,00,500$

Statement of Affairs
as on 31st December, 2005

Liabilities	Amt.(Rs)	Assets	Amt. (Rs)
Sundry Creditors	$40,000$	Cash in Hand	$12,000$
Loan	$8,000$	Cash at Bank	$2,000$
Capital (b/f)	$1,76,000$	Stock in trade	$90,000$
		Sundry Debtors	$60,000$
		Office equipments	$30,000$
		Land and Buildings	$20,000$
		Furniture	$10,000$
	$2,24,000$		$2,24,000$

Statement Showing Profit or Loss for the Year

Particulars	Amt. (Rs)
Capital at the end of the year as on 31st Dec 2005	$1,76,000$
(+) Drawings during the year	$12,000$
(-) Additional Capital Introduced during the year	$1,88,000$ $20,000$
(-) Capital at the Beginning of the year as on 1st January, 2005	$1,68,000$ $1,30,500$
Profit during the year 2005	$37,500$

Question : From the information given below ascertain the profit for the year

Items (Rs)
Capital at the beginning of the year $70,000$
Additional capital introduced during the year $17,500$
Stock $59,500$
Sundry Debtors $25,900$
Business permises $8,600$
Machinery $2,100$
Sundry Creditors $33,400$
Drawings made during the year $26,400$

Answer :

Statement of Affairs
as on .......

Liabilities	Amt.(Rs)	Assets	Amt.(Rs)
Sundry Creditors	$33,400$	Stock	$59,500$
Capital (b/f)	$62,700$	Sundry Debtors	$25,900$
		Business Premises	$8,600$
		Machinery	$2,100$
	$96,100$		$96,100$

Statements Showing Profit or Loss
for the year ended......

Particulars	Amt. (Rs)
Capital at the end of the year	$62,700$
(+) Drawings made during the year	$26,400$
	$89,100$
(-) Additional Capital introduced during the year	$17,500$
	$71,600$
(-) Capital at the Beginning of the year	$70,000$
Profit made during the year	$1,600$

Question : Mr Muneesh maintains his books of accounts from incomplete records. His books provide the information.

Items Jan 1, 2005 Dec 31, 2005
Cash $1,200$ $1,600$
Bills receivable ------- $2,400$
Debtors $16,800$ $27,200$
Stock $22,400$ $24,400$
Investment ----- $8,000$
Furniture $7,500$ $8,000$
Creditors $14,000$ $15,200$

He withdrew Rs $300$ per month for personal expenses. He sold his investment of Rs $16,000$ at $2\%$ premium and introduced that amount into business.

Answer :
Statement of Affairs
as on 1st January, 2005

Liabilities	Amt.(Rs)	Assets	Amt.(Rs)
Creditors	$14,000$	Cash	$1,200$
Capital (Balancing Figure)	$33,900$	Debtors	$16,800$
		Stock	$22,400$
		Furniture	$7,500$
	$47,900$		$47,900$

Statement of Affairs
as on 31st December, 2005

Liabilities	Amt. (Rs)	Assets	Amt. (Rs)
Creditors	$15,200$	Cash	$1,600$
Capital (Balancing Figure)	$56,400$	Bills Receivable	$2,400$
		Debtors	$27,200$
		Stock	$24,400$
		Investment	$8,000$
		Furniture	$8,000$
	$71,600$		$71,600$

Statement Showing Profit or Loss during the Year

Particulars	Amt. (Rs)
Capital at the end of the year as on 31st December 2005	$56,400$
(+) Drawings during the year (300 x12)	$3,600$
(-) Additional Capital Introduced during the yeat	$60,000$ $16,320$
(-) Capital at the Beginning of the year on 1st January 2005	$43,680$ $33,900$
Profit during the year 2005	$9780$

Working Note : Additional Capital Introduced during the year

$16,000 + 2\% = Rs.16,320$
Because Investment were sold at

$2\%$ Profit and then Introduced.

Question : Mr Ashok does not keep his book properly. Following information is available from his books.

Items Jan 1, 2005 (Rs) Dec 31, 2005 (Rs)
Sundry Creditors $45,000$ $93,000$
Loan from wife $60,000$ $57,000$
Sundry Debtors $22,500$ ------
Land and Building $89,600$ $90,000$
Cash in hand $7,500$ $8,700$
Bank overdraft $25,000$ -----
Furniture $1,300$ $1,300$
Stock $34,000$ $25,000$

During the year Mr. Ashok sold his private car for Rs $50,000$ and invested this amount into the business. He withdrew from the business Rs $1,500$ per month upto july 31, 2005 and thereafter Rs $4,500$ per month as drawings. You are required to prepare the statement of affairs as on December 31, 2005.

Answer

Statement of Affairs
as on 1 January, 2005

Liabilities	Amt. (Rs)	Assets	Amt. (Rs)
Sundry Creditors	$45,000$	Sundry Debtors	$22,500$
Loan from wife	$66,000$	Land and Buildings	$89,600$
Bank Overdraft	$25,000$	Cash in Hand	$7,500$
Capital (Balancing Figure)	$18,900$	Furniture	$1,300$
		Stock	$34,000$
	$1,54,900$		$1,54,900$

Statement of Affairs
as on 31st December, 2005

Liabilities	Amt. (Rs)	Assets	Amt.(Rs)
Sundry Creditors	$93,000$	Land and Buildings	$90,000$
Loan from wife	$57,000$	Cash in Hand	$8,700$
		Furniture	$1,300$
		Stock	$25,000$
		Capital (Balancing Figure) (Negative due to loss)	$25,000$
	$1,50,000$		$1,50,000$

Statement Showing Profit or Loss for the Year 2005

Particulars	Amt. (Rs)
Capital at the end of the year as on 31st December 2005 (+) Drawings during the year [ $1500 x 7 = 10,500$ ] [ $4500 x 5 = 22,500$ ]	$25,000$ $33,000$
(-) Additional Capital Introduced	$8,000$ $50,000$
(-) Capital at the beginning of the year on January 2005	$42,000$ $18,900$

Loss during the year 2005	$60,900$

Question : M/s Saniya Sports Equipment does not keep proper records. From the following information find out profit of loss and also prepare balance sheet for the year ended December 31, 2005.

Items Jan
1, 2005 (Rs) Dec
31, 2005 (Rs)
Cash in hand $6,000$ $24,000$
Bank Overdraft $30,000$ ----
Stock $50,000$ $80,000$
Sundry Creditors $26,000$ $40,000$
Sundry Debtors $60,000$ $1,40,000$
Bills Payable $6,000$ $12,000$
Furniture $40,000$ $60,000$
Bills Receivable $8,000$ $28,000$
Machinery $50,000$ $1,00,000$
Investment $30,000$ $80,000$

Drawing Rs $10,000$ p.m for personal use, fresh capital introduce during the year Rs $2,00,000$ . A bad debts Rs. $2,000$ and a provision of $5\%$ is to be made on debtors. Outstanding salary Rs $2,400$ , prepaid insurance Rs $700$ depreciation charged on furniture and machine @ $10\%$ pa.

Answer :
Statement of Affairs
as on 1st January, 2005

Liabilities	Amt. (Rs)	Assets	Amt.(Rs)
Bank Overdraft	$30,000$	Cash in hand	$6,000$
Sundry Creditors	$26,000$	Stock	$50,000$
Bills Payable	$6,000$	Sundry Debtors	$60,000$
Capital (Balancing Figure)	$1,82,000$	Furniture	$40,000$
		Bills Receivables	$8,000$
		Machinery	$50,000$
		Investment	$30,000$
	$2,44,000$		$2,44,000$

Statement of Affairs
as on 31st December, 2005

Liabilities	Amt. (Rs)	Assets	Amt.(Rs)
Sundry Creditors	$40,000$	Cash in Hand	$24,000$
Bills Payable	$12,000$	Stock	$80,000$
Outstanding Salary	$2,400$	Debtors $1,40,000$ (-) Bad debts $2,000$ $1,38,000$ (-) Provision @ $5\%$ $6,900$	$1,31,100$
		Furniture $60,000$ (-) Depreciation $6,000$	$54,000$
		Bills Receivables	$28,000$
		Machinery $1,00,000$ (-) Depreciation @ $10\%$ $10,000$	$90,000$
		Investment	$80,000$
		Prepaid Insurance	$700$
	$4,87,800$		$4,87,800$

Statement Showing Profit or Loss for the Year 2005

Particulars	Amt. (Rs)
Capital at the end of the year on 31st December 2005	$4,33,400$
(+) Drawings during the year. $$(10,000\times 12)	$1,20,000$
(-) Fresh Capital Introduced during 2005	$5,53,400$ $2,00,000$
(-) Capital at the Beginning of the year on 1st Jan 2005	$3,53,400$ $1,82,000$
Profit during the year 2005	$1,71,400$

Accouting From Incomplete Records - Class 10 Elements Of Book Keeping And Accountancy - Extra Questions

The following information is given below prepare the Statement of Profit or Loss.

Items (Rs)
Capital at the end of the year $5,00,000$
Capital in the beginning of the year $7,50,000$
Drawings made during the period $3,75,000$
Additional Capital introduced $50,000$

Is it possible to prepare the profit and loss account and the balance sheet from the incomplete book of accounts kept by a trader'? Do you agree? Explain.

Explain how the following may be ascertained from incomplete records
(a) Opening capital and closing capital
(b) Credit sales and credit purchases
(c) Payments to creditors and collection from debtors
(d) Closing balance of cash

What is meant by a 'statement of affairs'? How can the profit or loss of a trader be ascertained with the help of a statement of affairs?

Which statement is prepared under single entry system to ascertain profit?

Class 10 Elements Of Book Keeping And Accountancy Extra Questions

Items	(Rs)
Capital at the end of the year	$5,00,000$
Capital in the beginning of the year	$7,50,000$
Drawings made during the period	$3,75,000$
Additional Capital introduced	$50,000$

Items	Jan 1, 2011 (Rs)	Dec 31, 2011 (Rs)
Creditors	$5,000$	$30,000$
Bills Payable	$10,000$	----
Loan	-----	$50,000$
Bills receivable	$30,000$	$50,000$
Stock	$5,000$	$30,000$
Cash	$2,000$	$20,000$

Particulars	Amt. (Rs)
Capital at the end of the year i.e., December 2011	$20,000$
(-) Capital at the beginning of the year i.e., January 2011	$22,000$
Loss during the year 2011	$2,000$

Items	Jan 1, 2005	Dec 31, 2005
Cash in hand	$10,000$	$36,000$
Debtors	$20,000$	$80,000$
Creditors	$10,000$	$46,000$
Bills receivable	$20,000$	$24,000$
Bills payable	$4,000$	$42,000$
Car	------	$80,000$
Stock	$40,000$	$30,000$
Furniture	$8,000$	$48,000$
Investment	$40,000$	$50,000$
Bank Balance	$1,00,000$	$90,000$

	(Rs)
Sundry creditors as on March 31, 2005	$1,80,425$
Discount received	$26,000$
Discount allowed	$24,000$
Return outwards	$37,200$
Return Inward	$32,200$
Bills accepted	$1,99,900$
Bills endorsed to creditors	$26,000$
Creditors as on April 1, 2006	$2,09,050$
Total Purchase	$8,97,000$
Cash Purchase	$1,40,000$

Items	April 1, 2004	March 31, 2005
Cash in hand	$1,000$	$1,500$
Cash at bank	$15,000$	$10,000$
Stock	$1,00,000$	$95,000$
Debtors	$42,500$	$70,000$
Business premises	$75,000$	$1,35,000$
Furniture	$9,000$	$7,500$
Creditors	$66,000$	$87,000$
Bills payable	$44,000$	$58,000$

Particulars	31.03.2012 Amount (Rs.)	31.03.2013 Amount (Rs.)
Machinery	50,000	50,000
Furniture	50,000	30,000
Debtors	18,000	25,000
Creditors	18,000	20,000
Stock	30,000	42,000
Outstanding Expenses	1,500	42,000
Pre-paid expenses	-	-
Cash at bank	28,000	40,000

Particulars	01.04.2012 Amount (Rs.)	31.03.2013 Amount (Rs.)
Machinery	70,000	70,000
Furniture	10,000	20,000
Stock	36,000	42,000
Sundry debtors	72,200	88,400
Cash in hand	3,000	4,100
Cash at bank	42,000	52,300
Sundry creditors	54,500	60,400

Items	(Rs)
Capital at the beginning of the year	$15,00,000$
Bills receivable	$60,000$
Cash in hand	$80,000$
Furniture	$9,00,000$
Building	$10,00,000$
Creditors	$6,00,000$
Stock in trade	$2,00,000$
Further capital introduced	$3,20,000$
Drawings made during the period	$80,000$

Items	Jan 1, 2005 (Rs)	Dec 31, 2005 (Rs)
Sundry Creditors	$45,000$	$93,000$
Loan from wife	$60,000$	$57,000$
Sundry Debtors	$22,500$	------
Land and Building	$89,600$	$90,000$
Cash in hand	$7,500$	$8,700$
Bank overdraft	$25,000$	-----
Furniture	$1,300$	$1,300$
Stock	$34,000$	$25,000$

Items	Jan 1, 2005 (Rs)	Dec 31, 2005 (Rs)
Cash in hand	$6,000$	$24,000$
Bank Overdraft	$30,000$	----
Stock	$50,000$	$80,000$
Sundry Creditors	$26,000$	$40,000$
Sundry Debtors	$60,000$	$1,40,000$
Bills Payable	$6,000$	$12,000$
Furniture	$40,000$	$60,000$
Bills Receivable	$8,000$	$28,000$
Machinery	$50,000$	$1,00,000$
Investment	$30,000$	$80,000$

Accouting From Incomplete Records - Class 10 Elements Of Book Keeping And Accountancy - Extra Questions

The following information is given below prepare the Statement of Profit or Loss.Items (Rs)Capital at the end of the year5,00,0005,00,000Capital in the beginning of the year7,50,0007,50,000Drawings made during the period3,75,0003,75,000Additional Capital introduced50,00050,000

Is it possible to prepare the profit and loss account and the balance sheet from the incomplete book of accounts kept by a trader'? Do you agree? Explain.

Explain how the following may be ascertained from incomplete records(a) Opening capital and closing capital(b) Credit sales and credit purchases(c) Payments to creditors and collection from debtors(d) Closing balance of cash

What is meant by a 'statement of affairs'? How can the profit or loss of a trader be ascertained with the help of a statement of affairs?

Which statement is prepared under single entry system to ascertain profit?

Class 10 Elements Of Book Keeping And Accountancy Extra Questions

Support mcqexams.com by disabling your adblocker.

The following information is given below prepare the Statement of Profit or Loss.

Items (Rs)
Capital at the end of the year $5,00,000$
Capital in the beginning of the year $7,50,000$
Drawings made during the period $3,75,000$
Additional Capital introduced $50,000$

Explain how the following may be ascertained from incomplete records
(a) Opening capital and closing capital
(b) Credit sales and credit purchases
(c) Payments to creditors and collection from debtors
(d) Closing balance of cash