Reasons for incompleteness are:
Accounting records that are not maintained according to Double entry system are known as Accounts from Incomplete Records or Single Entry System of Accounting.
Statement of Profit or Loss For the year ended on 31st March, 2017 |
|
Particulars |
₹ |
Capital at the end of the year |
4,00,000 |
(+) Drawings during the year |
60,000 |
|
4,60,000 |
(-) fresh Capital introduced during the year |
1,00,000 |
|
3,60,000 |
(-) Profit of the Current year |
80,000 |
Capital at the Beginning of the Year |
2,80,000 |
Note:
As per the solution, the opening capital should be of ₹2,80,000; but, the answer given in the book is ₹2,60,000.
Statement of Profit or Loss For the year ended |
|
Particulars |
₹ |
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 |
a) Opening capital can be ascertained by preparing a Statement of Affairs at the beginning of the accounting period.
Closing capital can be ascertained by preparing a Statement of Affairs at the end of the accounting period.
The difference between the opening and closing capital represents its increase or decrease which is to be adjusted for withdrawals made by the owner or any fresh capital introduced by him during the accounting period in order to arrive at the amount of profit or loss made during the period.
b) Credit purchases can be ascertained by preparing the total creditors account.
Credit sales can be ascertained from total debtors account, the sales returns should be deducted from gross credit sales to get net credit sales.
c) Payment to creditors and collection from debtors can be ascertained by preparing total creditors and total debtors account
d) Closing balance of cash can be ascertained from the cash book summary.
Limitation of Incomplete records are as follows:
Comparison between Statement of Affairs and Balance Sheet:
Basis |
Statement of affairs |
Balance sheet |
Reliability |
It is less reliable as it is prepared from incomplete records. |
It is more reliable as it is prepared from double entry records. |
Objective |
The objective of preparing statement of affairs is to estimate the balance in capital account on a particular date. |
The objective of preparing balance sheet is to show the true financial position of an entity on a particular date. |
Omission |
Omission of assets or liabilities cannot be discovered easily. |
Omissions of assets or liabilities can be discovered easily and can be traced from accounting records. |
Accounts and Information |
In view of incomplete accounts, its preparation is based on limited accounts, calculations, estimates and other information. |
This is prepared exclusively figures, Balance Sheet is regarded as a reliable statement. |
Particulars | ₹ |
Opening balance of debtors | 1,80,000 |
Opening balance of bills receivable | 55,000 |
Cash sales made during the year | 95,000 |
Credit sales made during the year | 14,50,000 |
Return inwards | 78,000 |
Cash received from debtors | 10,25,000 |
Discount allowed to debtors | 55,000 |
Bills receivable endorsed to creditors | 60,000 |
Cash received (bills matured) | 80,500 |
Irrecoverable amount | 10,000 |
Closing balance of bills receivable on March 31, 2017 | 75,500 |
Debtor’s Account |
|||||
Dt. |
Particulars |
₹ |
Dt. |
Particulars |
₹ |
|
To Balance b/d |
1,80,000 |
|
By Return Inwards |
78,000 |
|
To Sales (Credit) |
14,50,000 |
|
By Discount allowed |
55,000 |
|
|
|
|
By Cash |
10,25,000 |
|
|
|
|
By Bad debts |
10,000 |
|
|
|
|
By Bills Receivable (Acceptance received) |
1,61,000 |
|
|
|
|
By Balance c/d (Bal. figure) |
3,01,000 |
|
|
16,30,000 |
|
|
16,30,000 |
Bills Receivable Account |
|||||
Dt. |
Particulars |
₹ |
Dt. |
Particulars |
₹ |
|
To Balance b/d |
55,000 |
|
By Cash/Bank |
80,500 |
|
To Debtors (Acceptance received) b/f |
1,61,000 |
|
By Creditors (Endorsed) |
60,000 |
|
|
|
|
By Balance c/d |
75,500 |
|
|
2,16,000 |
|
|
2,16,000 |
Particulars | ₹ |
Opening creditors | 60,000 |
Cash paid to creditors | 30,000 |
Closing creditors | 36,000 |
Returns inward | 13,000 |
Bills matured | 27,000 |
Bill dishonoured | 8,000 |
Purchases return | 12,000 |
Discount allowed | 5,000 |
Creditors Account |
|||||
Dt. |
Particulars |
₹ |
Dt. |
Particulars |
₹ |
|
To Cash A/c |
30,000 |
|
By Balance b/d |
60,000 |
|
To Purchase Return A/c |
12,000 |
|
By Bills Payable (dishonoured) |
8,000 |
|
To Bills Payable (Accepted) |
27,000 |
|
By Purchase (Credit) (Bal. figure) |
37,000 |
|
To Balance c/d |
36,000 |
|
|
|
|
|
|
|
|
|
|
|
1,05,000 |
|
|
1,05,000 |
Particulars | ₹ |
Cash | 30,000 |
Stock | 4,70,000 |
Debtors | 3,50,000 |
Creditors | 3,00,000 |
Statement of Affairs As on 31st March, 2017 |
|||
Liabilities |
₹ |
Assets |
₹ |
Creditors |
3,00,000 |
Cash |
30,000 |
Loans from friends |
1,00,000 |
Stock |
4,70,000 |
Capital (bal. figure) |
4,50,000 |
Debtors |
3,50,000 |
|
|
|
|
|
8,50,000 |
|
8,50,000 |
Statement of Profit or Loss For the year ended on 31st March, 2017 |
|
Particulars |
₹ |
Capital at the end of the year |
4,50,000 |
(+) Drawings during the year (₹8000 x 6) |
48,000 |
|
4,98,000 |
(-) Additional Capital introduced |
75,000 |
|
4,23,000 |
(-) Capital at the Beginning of the Year |
4,00,000 |
Profit made during the year 2017 |
23,000 |
Particulars | 01/04/2016 | 31/03/2017 |
₹ | ₹ | |
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 |
Statement of Affairs As on 1st April, 2016 |
|||
Liabilities |
₹ |
Assets |
₹ |
Creditors |
5,000 |
Bills Receivable |
30,000 |
Bills payable |
10,000 |
Stock |
5,000 |
Capital (b/f) |
22,000 |
Cash |
2,000 |
|
|
|
|
|
37,000 |
|
37,000 |
Statement of Affairs As on 31st March, 2017 |
|||
Liabilities |
₹ |
Assets |
₹ |
Creditors |
30,000 |
Bills Receivable |
50,000 |
Loan |
50,000 |
Stock |
30,000 |
Capital (b/f) |
20,000 |
Cash |
20,000 |
|
|
|
|
|
1,00,000 |
|
1,00,000 |
Statement of Profit or Loss For the year ended on 31st March, 2017 |
|
Particulars |
₹ |
Capital at the end of the year |
20,000 |
(-) Capital at the beginning of the year |
22,000 |
Loss during the year |
2,000 |
Statement of Affairs As on 31st March, 2017 |
|||
Liabilities |
₹ |
Assets |
₹ |
Loan from Susheel |
45,000 |
Cash |
99,000 |
Capital |
|
Bills Receivable |
75,000 |
(Balancing Figure) |
4,07,000 |
Plant |
48,000 |
|
|
Land & Building |
1,80,000 |
|
|
Furniture |
50,000 |
|
4,52,000 |
|
4,52,000 |
Statement of Profit or Loss For the year ended on 31st March, 2017 |
|
Particulars |
₹ |
Capital at the end of the year |
4,07,000 |
(+) Drawings during the year (₹8,000 x 12) |
96,000 |
|
5,03,000 |
(-) Capital at the beginning of the year |
4,50,000 |
Profit made during the year |
53,000 |
The main purpose of any business is to earn profit. To prepare proper trading and profit and loss account and the balance sheet one needs complete information regarding expenses, incomes, assets and liabilities.
This can be done in two ways:
Statement of Affairs Method:
A statement of affairs is a statement of assets and liabilities. Under this method, statements of assets and liabilities as at the beginning and at the end of the relevant accounting period are prepared to ascertain the amount of change in the capital during the period.
Once the amount of capital, both at the beginning and at the end is computed with the help of statement of affairs, a statement of profit and loss is prepared to ascertain the exact amount of profit or loss made during the year.
Conversion method:
Converting the accounts from single entry to double entry is called as conversion method.
The steps involved in converting single entry into double entry are:
A statement of affairs is a statement of assets and liabilities. Under this method, statements of assets and liabilities as at the beginning and at the end of the relevant accounting period are prepared to ascertain the amount of change in the capital during the period.
Statement of affairs shows assets on one side and the liabilities on the other just as in case of a balance sheet. The difference between the totals of the two sides is the capital.
Once the amount of capital, both at the beginning and at the end is computed with the help of statement of affairs, a statement of profit and loss is prepared to ascertain the exact amount of profit or loss made during the year.
The difference between the opening and closing capital represents its increase or decrease which is to be adjusted for withdrawals made by the owner or any fresh capital introduced by him during the accounting period.
If the net result of above computation is a positive amount, it represents the profit earned during the year. In case the net result is a negative amount, it represents the loss during the year.
Profit or Loss = Capital at end – Capital at beginning + Drawings during the year – Capital introduced during the year.
Particulars | ₹ |
Opening stock | 30,000 |
Closing stock | 25,000 |
Opening creditors | 50,000 |
Closing debtors | 75,000 |
Discount allowed by creditors | 1,500 |
Discount allowed to customers | 2,500 |
Cash paid to creditors | 1,35,000 |
Bills payable accepted during the period | 30,000 |
Bills receivable received during the period | 75,000 |
Cash received from customers | 2,20,000 |
Bills receivable dishonored | 3,500 |
Purchases | 2,95,000 |
Debtor’s Account |
|||||
Dt. |
Particulars |
₹ |
Dt. |
Particulars |
₹ |
|
To Balance b/d |
54,000 |
|
By Discount Allowed |
2,500 |
|
To Bills Receivable (dishonoured) |
3,500 |
|
By Bills Receivable (Received) |
75,000 |
|
To Sales Credit |
3,15,000 |
|
By Cash |
2,20,000 |
|
|
|
|
By Balance c/d |
75,000 |
|
|
3,72,500 |
|
|
3,72,500 |
Creditor’s Account |
|||||
Dt. |
Particulars |
₹ |
Dt. |
Particulars |
₹ |
|
To Discount Received |
1,500 |
|
By Balance b/d |
50,000 |
|
To Cash A/c |
1,35,000 |
|
By Purchases (Credit) |
2,95,000 |
|
To Bills Receivable (Acceptance) |
30,000 |
|
|
|
|
To Balance c/d (Bal. figure) |
1,78,500 |
|
|
|
|
|
3,45,000 |
|
|
3,45,000 |
Working Note:
Computation of Credit Sales:
Sales = Cost of goods sold + Gross Profit
Cost of goods sold = Opening stock + Purchases – Closing stock
= ₹30,000 + ₹2,95,000 – ₹25,000
= ₹3,00,000
When the cost of goods sold is ₹3,00,000.
Sales will be = ₹3,00,000 + 25% Gross profit
As we know that cash sales is ₹85,000. So credit sales will be: = ₹4,00,000 – ₹85,000 = ₹3,15,000
Dr. Summary of Cash Cr. | |||
Receipts | ₹ | Payments | ₹ |
Opening balance of cash | 12,000 | Paid to creditors | 53,000 |
Further capital | 20,000 | Business expenses | 12,000 |
Received from debtors | 1,20,000 | Wages paid | 30,000 |
Bhavana’s drawings | 15,000 | ||
Balance at bank on Mar 31, 2017 | 35,000 | ||
Cash in hand | 7,000 | ||
1,52,000 | 1,52,000 |
Particulars | 01/04/2016 | 31/03/2017 |
Debtors | 55,000 | 85,000 |
Creditors | 22,000 | 29,000 |
Stock | 35,000 | 70,000 |
Plant | 10,00,000 | 1,00,000 |
Machinery | 50,000 | 50,000 |
Land & Buildings | 2,50,000 | 2,50,000 |
Investment | 20,000 | 20,000 |
Debtor’s Account |
|||||
Dt. |
Particulars |
₹ |
Dt. |
Particulars |
₹ |
2016 |
|
|
2017 |
|
|
Apr 1 |
To Balance b/d |
55,000 |
|
By Cash A/c |
1,20,000 |
|
To Sales (Credit) |
1,50,000 |
Mar 31 |
By Balance b/d |
85,000 |
|
|
2,05,000 |
|
|
2,05,000 |
Creditor’s Account |
|||||
Dt. |
Particulars |
₹ |
Dt. |
Particulars |
₹ |
2017 |
|
|
2016 |
|
|
|
To Cash A/c |
53,000 |
Apr 1 |
By Balance b/d |
22,000 |
Mar 31 |
To Balance c/d |
29,000 |
|
By Purchase (Credit) b/f |
60,000 |
|
|
82,000 |
|
|
82,000 |
Statement of Affairs As on 31st March, 2017 |
|||
Liabilities |
₹ |
Assets |
₹ |
Creditors |
22,000 |
Debtors |
55,000 |
Capital at beginning |
5,00,000 |
Stock |
35,000 |
(Bal. Figure) |
|
Plant |
1,00,000 |
|
|
Machinery |
50,000 |
|
|
Land & Building |
2,50,000 |
|
|
Investment |
20,000 |
|
|
Cash |
12,000 |
|
5,22,000 |
|
5,22,000 |
Trading & Profit & Loss Account As on 31st March, 2017 |
||||
Particulars |
₹ |
Particulars |
₹ |
|
To Opening Stock |
35,000 |
By Sales |
1,50,000 |
|
To purchases |
60,000 |
By Closing Stock |
70,000 |
|
To Wages |
30,000 |
|
|
|
To Gross Profit c/d (Bal. figure) |
95,000 |
|
|
|
|
2,20,000 |
|
2,20,000 |
|
To Business Expenses |
12,000 |
By Gross Profit b/d |
95,000 |
|
To Provision for Doubtful Debts |
4,250 |
|
|
|
To Depreciation |
|
|
|
|
On Plant |
10,000 |
|
|
|
On Building |
25,000 |
|
|
|
On Machinery |
2,500 |
37,500 |
|
|
To Net Profit (b/f) |
41,250 |
|
|
|
|
|
|
|
|
|
95,000 |
|
95,000 |
Balance Sheet As on 31st March, 2017 |
|||||
Liabilities |
₹ |
Assets |
₹ |
||
Capital |
5,00,000 |
|
Cash in Hand |
7,000 |
|
(+) Net profit |
41,250 |
|
Cash at Bank |
35,000 |
|
|
5,41,250 |
|
Investment |
20,000 |
|
(+) Further Capital |
20,000 |
|
Debtors |
85,000 |
|
|
5,61,250 |
|
(-) Provision@5% |
4,250 |
80,750 |
(-)Drawings |
15,000 |
5,46,250 |
Plant |
1,00,000 |
|
Creditors |
29,000 |
(-) Dep. @10% |
10,000 |
90,000 |
|
|
|
Machinery |
50,000 |
|
|
|
|
(-) Dep @5% |
2,500 |
47,500 |
|
|
|
Land & Building |
2,50,000 |
|
|
|
|
(-) Dep. @10% |
25,000 |
2,25,000 |
|
|
|
Closing Stock |
70,000 |
||
|
5,75,250 |
|
5,75,250 |
Particulars | ₹ |
Opening balance of debtors | 14,00,000 |
Opening balance of bills receivable | 7,00,000 |
Closing balance of bills receivable | 3,50,000 |
Cheque dishonoured | 27,000 |
Cash received from debtors | 10,75,000 |
Cheque received and deposited in the bank | 8,25,000 |
Discount allowed | 37,500 |
Irrecoverable amount | 17,500 |
Returns inwards | 28,000 |
Bills receivable received from customers | 1,05,000 |
Bills receivable matured | 2,80,000 |
Bills discounted | 65,000 |
Bills endorsed to creditors | 70,000 |
Debtor’s Account |
|||||
Dt. |
Particulars |
₹ |
Dt. |
Particulars |
₹ |
|
To Balance b/d |
14,00,000 |
|
By Cash |
10,75,000 |
|
To Bank (Cheque dishonoured) |
27,000 |
|
By Bank (Cheque) |
8,25,000 |
|
To Bills Receivable (dishonoured) |
40,000 |
|
By Bad debts |
17,500 |
|
To Sales (Credit) b/f |
6,21,000 |
|
By Return Inwards |
28,000 |
|
|
|
|
By Discount allowed |
37,500 |
|
|
|
|
By Bills receivable |
1,05,000 |
|
|
20,88,000 |
|
|
20,88,000 |
Bills Receivable Account |
|||||
Dt. |
Particulars |
₹ |
Dt. |
Particulars |
₹ |
|
To Balance b/d |
7,00,000 |
|
By Cash (B/R matured) |
2,80,000 |
|
To Debtors (Bills Receivable) |
1,05,000 |
|
By Bank (Bill endorsed) |
65,000 |
|
|
|
|
By Creditors (endorsed) |
70,000 |
|
|
|
|
By Debtors (dishonoured) b/f |
40,000 |
|
|
|
|
By Balance c/d |
3,50,000 |
|
|
8,05,000 |
|
|
8,05,000 |
Note: As per solution, the missing figure in the bills receivable account is B/R dishonoured of ₹40,000. The credit sales is ₹6,21,000, however, the NCERT book shows a credit sales ₹5,16,000.
Particulars | ₹ |
Opening debtors | 45,000 |
Closing debtors | 56,000 |
Discount allowed | 2,500 |
Sales returns | 8,500 |
Irrecoverable amount | 4,000 |
Bills receivable received | 12,000 |
Bills receivable dishonoured | 3,000 |
Cheque dishonoured | 7,700 |
Cash sales | 80,000 |
Cash received from debtors | 2,30,000 |
Cheque received from debtors | 25,000 |
Debtor’s Account |
|||||
Dt. |
Particulars |
₹ |
Dt. |
Particulars |
₹ |
|
To Balance b/d |
45,000 |
|
By Discount Allowed |
2,500 |
|
To Bills Receivable (dishonoured) |
3,000 |
|
By Sales Return |
8,500 |
|
To Bank (Cheque dishonoured) |
7,700 |
|
By Bad debts |
4,000 |
|
To Sales (b/f) |
2,82,300 |
|
By Bills Receivable |
12,000 |
|
|
|
|
By Cash |
2,30,000 |
|
|
|
|
By Bank (Cheque Received) |
25,000 |
|
|
|
|
By Balance c/d |
56,000 |
|
|
3,38,000 |
|
|
3,38,000 |
Total Sales = Cash Sales + Credit Sales
Total Sales = ₹80,000 + ₹2,82,300 = ₹3,62,300
Particulars | ₹ |
Opening balance of bills receivable | 1,20,000 |
Bills collected (honoured) | 1,85,000 |
Bills receivable endorsed | 22,800 |
Closing balance of bills receivable | 50,700 |
Bills receivable received | 1,50,000 |
Bills Receivable Account |
|||||
Dt. |
Particulars |
₹ |
Dt. |
Particulars |
₹ |
|
To Balance b/d |
1,20,000 |
|
By Cash/Bank (Bills honoured) |
1,85,000 |
|
To Debtors (Bills Received) |
1,50,000 |
|
By Bills Endorsed (Creditors) |
22,800 |
|
|
|
|
By Debtors (Bill dishonored) b/f |
11,500 |
|
|
|
|
By Balance c/d |
50,700 |
|
|
2,70,000 |
|
|
2,70,000 |
The amount of Bills Receivable dishonoured is ₹11,500.
Particulars | ₹ |
Opening balance of bills receivable | 75,000 |
Bills dishonoured | 25,000 |
Bills collected (honoured) | 1,30,000 |
Bills receivable endorsed to creditors | 15,000 |
Closing balance of bills receivable | 65,000 |
Bills Receivable Account |
|||||
Dt. |
Particulars |
₹ |
Dt. |
Particulars |
₹ |
|
To Balance b/d |
75,000 |
|
By Debtors (Bill dishonoured) |
25,000 |
|
To Debtors (Bills Receivable Acceptance) b/f |
1.60,000 |
|
By Cash/Bank (Bills honoured) |
1,30,000 |
|
|
|
|
By Bills Endorsed |
15,000 |
|
|
|
|
By Balance c/d |
65,000 |
|
|
2,35,000 |
|
|
2,35,000 |
Bills receivable received from debtors is ₹1,60,000.
Particulars | ₹ |
Bills accepted | 1,05,000 |
Discount received | 17,000 |
Purchases returns | 9,000 |
Return inwards | 12,000 |
Cash paid to accounts payable | 50,000 |
Bills receivable endorsed to creditor | 45,000 |
Bills dishonoured | 17,000 |
Bad debts | 14,000 |
Balance of accounts payable (Closing) | 85,000 |
Credit purchases | 2,15,000 |
Bills Payable Account |
|||||
Dt. |
Particulars |
₹ |
Dt. |
Particulars |
₹ |
|
To Creditors (Bills Dishonored) |
17,000 |
|
By Creditors (Acceptance) |
1,05,000 |
|
To Cash/ Bank (Bal. figure) |
88,000 |
|
|
|
|
|
1,05,000 |
|
|
1,05,000 |
Creditors Account |
|||||
Dt. |
Particulars |
₹ |
Dt. |
Particulars |
₹ |
|
To Discount Received |
17,000 |
|
By Purchases (Credit) |
2,15,000 |
|
To purchase Return |
9,000 |
|
By Bills Payable (Dishonored) |
17,000 |
|
To Cash A/c |
50,000 |
|
By Balance b/d (Bal. figure) |
79,000 |
|
To Bills Receivable |
45,000 |
|
|
|
|
To Bills Payable (Acceptance) |
1,05,000 |
|
|
|
|
To Balance c/d |
85,000 |
|
|
|
|
|
3,11,000 |
|
|
3,11,000 |
Opening Balance of creditors is ₹79,000
Particulars | ₹ |
Bills payable dishonoured | 37,000 |
Closing balance of bills payable | 85,000 |
Opening balance of Bills payable | 70,000 |
Bills payable accepted | 90,000 |
Cheque dishonoured | 23,000 |
Bills Payable Account |
|||||
Dt. |
Particulars |
₹ |
Dt. |
Particulars |
₹ |
|
To Creditors (Bills Dishonoured) |
37,000 |
|
By Balance b/d |
70,000 |
|
To Balance c/d |
85,000 |
|
By Creditors (Bills Payable) |
90,000 |
|
To Cash/Bank (Bal. figure) |
38,000 |
|
|
|
|
|
1,60,000 |
|
|
1,60,000 |
The amount of bills matured during the year is ₹38,000.
Particulars | ₹ |
Bills payable as on Apr 01, 2016 | 1,80,000 |
Bills payable as on March 31, 2017 | 2,20,000 |
Bills payable dishonoured during the year | 28,000 |
Bills payable honoured during the year | 50,000 |
Bills Payable Account |
|||||
Dt. |
Particulars |
₹ |
Dt. |
Particulars |
₹ |
|
|
|
2016 |
|
|
|
To Creditors |
|
Apr 1 |
By Balance b/d |
1,80,000 |
|
(Bills Payable Dishonoured) |
28,000 |
|
By Creditors |
|
|
To Cash Bank |
|
|
(Bills Payable) |
1,18,000 |
|
(Bills Payable paid) |
50,000 |
|
(Bal. Figure) |
|
|
|
|
|
|
|
|
To Balance c/d |
2,20,000 |
|
|
|
|
|
2,98,000 |
|
|
2,98,000 |
Bills accepted during the year is ₹1,18,000.
Particulars | ₹ |
Creditors Apr 01, 2016 | 30,000 |
Creditors Mar 31, 2017 | 20,000 |
Opening balance of bills payable | 25,000 |
Closing balance of bills payable | 35,000 |
Cash paid to creditors | 1,51,000 |
Bills discharged | 44,500 |
Cash purchases | 1,29,000 |
Return outwards | 6,000 |
Sundry Creditors Account |
|||||
Dt. |
Particulars |
₹ |
Dt. |
Particulars |
₹ |
|
|
|
2016 |
|
|
|
To Cash |
1,51,000 |
Apr 1 |
By Balance b/d |
30,000 |
|
To Bills Payable |
54,500 |
|
By Purchase (net) (b/f) |
2,01,500 |
|
To Return Outwards |
6,000 |
|
|
|
|
To Balance c/d |
20,000 |
|
|
|
|
|
2,31,500 |
|
|
2,31,500 |
Bills Payable Account |
|||||
Dt. |
Particulars |
₹ |
Dt. |
Particulars |
₹ |
2017 |
|
|
|
|
|
|
To Cash |
44,500 |
|
By Balance b/d |
25,000 |
Mar 31 |
To Balance c/d |
35,000 |
|
By Creditors |
54,500 |
|
|
|
|
(Bills Payable) |
|
|
|
|
|
(Bal. Figure) |
|
|
|
79,500 |
|
|
79,500 |
Total Purchases = Cash Purchase + Credit Purchases
Hence, Total Purchases will be:
₹1,29,000 + ₹2,01,500 = ₹ 3,30,500
Particulars | ₹ |
Balance of creditors April 01, 2016 | 45,000 |
Balance of creditors March 31, 2017 | 36,000 |
Cash paid to creditors | 1,80,000 |
Cheque issued to creditors | 60,000 |
Cash purchases | 75,000 |
Discount received from creditors | 5,400 |
Discount allowed | 5,000 |
Bills payable given to creditors | 12,750 |
Return outwards | 7,500 |
Bills payable dishonoured | 3,000 |
Bills receivable endorsed to creditors | 4,500 |
Bills receivable endorsed to creditors dishonoured | 1,800 |
Return inwards | 3,700 |
Sundry Creditors Account |
|||||
Dt. |
Particulars |
₹ |
Dt. |
Particulars |
₹ |
|
To Cash |
1,80,000 |
2016 |
|
|
|
To Bank (Cheque) |
60,000 |
Apr 1 |
By Balance b/d |
45,000 |
|
To Discount received |
5,400 |
|
By Bills Payable (Dishonoured) |
3,000 |
|
To Bills Payable (Accepted) |
12,750 |
|
By Bills Receivable (Endorsed Dishonoured) |
1,800 |
|
To Return Outward |
7,500 |
|
By Purchase (Credit B/f) |
2,56,350 |
|
To Bills Receivable (Endorsed to creditors) |
4,500 |
|
|
|
|
To balance c/d |
36,000 |
|
|
|
|
|
3,06,150 |
|
|
3,06,150 |
Credit purchases for the year 2017 is ₹2,56,350.
Particulars | ₹ |
Sundry Creditors as on March 31, 2017 | 1,80,425 |
Discount received | 26,000 |
Discount allowed | 24,000 |
Return outwards | 37,200 |
Return inward | 32,200 |
Bills accepted | 1,99,000 |
Bills endorsed to creditors | 26,000 |
Creditors as on April 01, 2016 | 2,09,050 |
Total purchases | 8,97,000 |
Cash purchases | 1,40,000 |
Sundry Creditors Account |
|||||
Dt. |
Particulars |
₹ |
Dt. |
Particulars |
₹ |
|
|
|
2017 |
|
|
|
To Discount Received |
26,000 |
Mar 31 |
By Balance b/d |
1,80,425 |
|
To Return Outwards |
37,200 |
|
By Purchase (Credit) |
7,57,000 |
|
To Bills accepted |
1,99,000 |
|
|
|
|
To Bills endorsed to creditors (b/r) |
26,000 |
|
|
|
|
To Creditors as on April 01, 2016 |
2,09,050 |
|
|
|
|
To Balance c/d |
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) = ₹7,57,000
Amount paid to Creditors = ₹ 4,40,175
Particulars | 31/03/2016 | 31/03/2017 |
₹ | ₹ | |
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 |
Statement of Affairs As on 31st March, 2016 |
|||
Liabilities |
₹ |
Assets |
₹ |
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 (Bal. 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 March, 2017 |
||||
Liabilities |
₹ |
Assets |
₹ |
|
Sundry Creditors |
40,000 |
Cash in Hand |
24,000 |
|
Bills Payable |
12,000 |
Stock |
80,000 |
|
Outstanding Salary |
2,400 |
Debtors |
1,40,000 |
|
Capital (Bal. figure) |
4,33,400 |
(-) Bad debts |
2,000 |
|
|
|
|
1,38,000 |
|
|
|
(-) Prov. @5% |
6,900 |
1,31,100 |
|
|
Furniture |
60,000 |
|
|
|
(-) Dep. |
6,000 |
54,000 |
|
|
Machinery |
1,00,000 |
|
|
|
(-) Dep@10% |
10,000 |
90,000 |
|
|
Bills Receivables |
28,000 |
|
|
|
Investment |
80,000 |
|
|
|
Prepaid Insurance |
700 |
|
|
4,87,800 |
|
4,87,800 |
Statement of Profit or Loss For the year 31st March, 2017 |
|
Particulars |
₹ |
Capital at the end of the year 31/03/2017 |
4,33,400 |
(+) Drawings during the year (₹10,000 x 12 months) |
1,20,000 |
|
5,53,400 |
(-) Fresh capital introduced |
(2,00,000) |
|
3,53,400 |
(-) Capital at the Beginning of the Year 01/04/2016 |
(1,82,000) |
Profit earned during the year |
1,71,400 |
Note: As per the solution, the statement of affair with adjustment is ₹4,87,800; while, as per the book, the adjustment is ₹4,87,700.
Particulars | 01/04/2016 | 31/03/2017 |
₹ | ₹ | |
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 |
Statement of Affairs As on 1st April, 2016 |
|||
Liabilities |
₹ |
Assets |
₹ |
Creditors |
10,000 |
Cash in hand |
10,000 |
Bills Payable |
4,000 |
Debtors |
20,000 |
Capital (Bal. figure) |
2,24,000 |
Bills Receivable |
20,000 |
|
|
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 March, 2017 |
||||
Liabilities |
₹ |
Assets |
₹ |
|
Creditors |
46,000 |
Cash in Hand |
36,000 |
|
Bills Payable |
42,000 |
Debtors |
80,000 |
|
Outstanding Expenses |
6,000 |
Bills Receivable |
24,000 |
|
Capital (Bal. figure) |
3,35,200 |
Car |
80,000 |
|
|
|
(-) Dep. @5% |
4,000 |
76,000 |
|
|
Furniture |
48,000 |
|
|
|
(-) Dep @10% |
4,800 |
43,200 |
|
|
Investment |
50,000 |
|
|
|
Cash at Bank |
90,000 |
|
|
|
Stock |
30,000 |
|
|
4,29,200 |
|
4,29,200 |
Statement of Profit or Loss For the year 2017 |
|
Particulars |
₹ |
Capital at the end of the year 31/03/2017 |
3,35,200 |
(+) Drawings during the year (₹5,000 x 12 months) |
60,000 |
|
3,95,200 |
(-) Fresh capital introduced |
30,000 |
|
3,65,200 |
(-) Capital at the Beginning of the Year 01/04/2016 |
2,24,000 |
Profit earned during the year |
1,41,200 |
Particulars | 01/04/2016 | 31/03/2017 |
₹ | ₹ | |
Sundry creditors | 45,000 | 93,000 |
Loan from wife | 66,000 | 57,000 |
Sundry debtors | 22,500 | _____ |
Land & 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 |
Statement of Affairs As on 1st April, 2016 |
|||
Liabilities |
₹ |
Assets |
₹ |
Sundry Creditors |
45,000 |
Sundry Debtors |
22,500 |
Loan from wife |
66,000 |
Land & Buildings |
89,600 |
Bank Overdraft |
25,000 |
Cash in Hand |
7,500 |
Capital (Bal. figure) |
18,900 |
Furniture |
1,300 |
|
|
Stock |
34,000 |
|
1,54,900 |
|
1,54,900 |
Statement of Affairs As on 31st March, 2017 |
|||
Liabilities |
₹ |
Assets |
₹ |
Sundry Creditors |
93,000 |
Land & Buildings |
90,000 |
Loan from Wife |
57,000 |
Cash in Hand |
8,700 |
|
|
Furniture |
1,300 |
|
|
Stock |
25,000 |
|
|
Capital (Bal. figure)
|
25,000 |
|
1,50,000 |
|
1,50,000 |
Statement of Profit or Loss For the year 2017 |
|
Particulars |
₹ |
Capital at the end of the year 31/03/2017 |
(25,000) |
(+) Drawings during the year (₹1500 x 7 months = ₹10,500) (₹4,500 x 5 months = ₹22,500) |
33,000 |
|
(8,000) |
(-) Additional capital introduced |
(50,000) |
|
(42,000) |
(-) Capital at the Beginning of the Year 01/04/2016 |
(18,900) |
Profit earned during the year |
(60,900) |
Note: As per the solution, the loss incurred during the year 2017 is ₹60,900, whereas the loss given in the book shows ₹57,900.
Liabilities | ₹ | Assets | ₹ |
Sundry creditors | 35,000 | Cash in hand | 5,000 |
Bills payable | 15,000 | Cash at bank | 20,000 |
Capital | 40,000 | Sundry debtors | 18,000 |
Stock | 22,000 | ||
Furniture | 8,000 | ||
Plant | 17,000 | ||
90,000 | 90,000 |
Particulars | ₹ |
Cash in hand | 7,000 |
Stock | 8,600 |
Debtors | 23,800 |
furniture | 15,000 |
Plant | 20,350 |
Bills payable | 20,200 |
Creditors | 15,000 |
Statement of Affairs As on 31st March, 2017 |
|||
Liabilities |
₹ |
Assets |
₹ |
Bills Payable |
20,200 |
Cash in hand |
7,000 |
Creditors |
15,000 |
Stock |
8,600 |
Capital (Bal. figure) |
39,550 |
Debtors |
23,800 |
|
|
Furniture |
15,000 |
|
|
Plant |
20,350 |
|
74,750 |
|
74,750 |
Statement of Profit or Loss For the year 2017 |
|
Particulars |
₹ |
Capital at the end of the year 31/03/2017 |
39,550 |
(+) Drawings during the year (₹500 x 12) |
6,000 |
|
45,550 |
(-) Additional capital introduced |
1,500 |
|
44,050 |
(-) Capital at the Beginning of the Year 01/04/2016 |
40,000 |
Profit earned during the year |
4,050 |
Particulars | 01/04/2016 | 31/03/2017 |
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 |
Statement of Affairs As on 1st April, 2016 |
|||
Liabilities |
₹ |
Assets |
₹ |
Creditors |
14,000 |
Cash |
1,200 |
Capital (Bal. figure) |
33.900 |
Debtors |
16,800 |
|
|
Stock |
22,400 |
|
|
Furniture |
7,500 |
|
47,900 |
|
47,900 |
Statement of Affairs As on 31st March, 2017 |
|||
Liabilities |
₹ |
Assets |
₹ |
Creditors |
15,200 |
Cash |
1,600 |
Capital (Bal. figure) |
56,400 |
Bills Receivable |
2,400 |
|
|
Debtors |
27,200 |
|
|
Stock |
24,400 |
|
|
Investment |
8,000 |
|
|
Furniture |
8,000 |
|
71,600 |
|
71,600 |
Statement of Profit or Loss For the year 2017 |
|
Particulars |
₹ |
Capital at the end of the year 31/03/2017 |
56,400 |
(+) Drawings during the year (₹300 x 12) |
3,600 |
|
60,000 |
|
|
(-) Additional capital introduced |
16,320 |
|
43,680 |
|
|
(-) Capital at the Beginning of the Year 01/04/2016 |
33,900 |
Profit earned during the year |
9,780 |
Working Note:
Additional capital introduced during the year:
₹16,000 + 2% = ₹16,320
Because investment were sold at 2% profit and the same introduced in the business.
Particulars | 01/04/2016 | 31/03/2017 |
₹ | ₹ | |
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 & Buildings | 30,000 | 20,000 |
Furniture | 10,000 | 10,000 |
Statement of Affairs As on 1st April, 2016 |
|||
Liabilities |
₹ |
Assets |
₹ |
Sundry Creditors |
60,000 |
Cash in Hand |
18,000 |
Loan |
10,000 |
Cash at bank |
1,500 |
Capital (Bal. figure) |
1,30,500 |
Stock in trade |
80,000 |
|
|
Sundry Debtors |
36,000 |
|
|
Office Equipments |
25,000 |
|
|
Land & Building |
30,000 |
|
|
Furniture |
10,000 |
|
2,00,500 |
|
2,00,500 |
Statement of Affairs As on 31st March , 2017 |
|||
Liabilities |
₹ |
Assets |
₹ |
Sundry Creditors |
40,000 |
Cash in Hand |
12,000 |
Loan |
8,000 |
Cash at bank |
2,000 |
Capital (Bal. figure) |
1,76,000 |
Stock in trade |
90,000 |
|
|
Sundry Debtors |
60,000 |
|
|
Office Equipments |
30,000 |
|
|
Land & Building |
20,000 |
|
|
Furniture |
10,000 |
|
2,24,000 |
|
2,24,000 |
Statement of Profit or Loss For the year 2017 |
|
Particulars |
₹ |
Capital at the end of the year 31/03/2017 |
1,76,000 |
(+) Drawings during the year |
12,000 |
|
1,88,000 |
(-) Additional capital introduced |
20,000 |
|
1,68,000 |
(-) Capital at the Beginning of the Year 01/04/2016 |
1,30,500 |
Profit earned during the year |
37,500 |
Note: As per the solution, the profit earned for the year 2017 should be ₹37,500; whereas, in the text book, the profit earned is ₹53,500.
Particulars | 01/04/2016 | 31/03/2017 |
₹ | ₹ | |
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 |
Statement of Affairs As on 1st April, 2016 |
|||
Liabilities |
₹ |
Assets |
₹ |
Creditors |
66,000 |
Cash in Hand |
1,000 |
Bills Payable |
44,000 |
Cash at bank |
15,000 |
Capital (Bal. figure) |
1,32,500 |
Stock |
1,00,000 |
|
|
Debtors |
42,500 |
|
|
Business Premises |
75,000 |
|
|
Furniture |
9,000 |
|
2,42,500 |
|
2,42,500 |
Statement of Affairs As on 31st March, 2017 |
|||
Liabilities |
₹ |
Assets |
₹ |
Creditors |
87,000 |
Cash in Hand |
1,500 |
Bills Payable |
58,000 |
Cash at bank |
10,000 |
Capital (Bal. figure) |
1,74,000 |
Stock |
95,000 |
|
|
Debtors |
70,000 |
|
|
Business Premises |
1,35,000 |
|
|
Furniture |
7,500 |
|
3,19,000 |
|
3,19,000 |
Statement of Profit or Loss For the year 31 March 2017 |
|
Particulars |
₹ |
Capital at the end of the year 31/03/2017 |
1,74,000 |
(+) Drawings during the year |
45,000 |
|
2,19,000 |
(-) Additional capital introduced |
25,000 |
|
1,94,000 |
(-) Capital at the Beginning of the Year 01/04/2016 |
1,32,500 |
Profit earned during the year |
61,500 |
Particulars | ₹ |
Capital at the beginning | 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 |
Statement of Affairs As on ……. |
|||
Liabilities |
₹ |
Assets |
₹ |
Creditors |
6,00,000 |
Bills Receivables |
60,000 |
Capital (bal. 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 of Profit or Loss At the end of the year |
|
Particulars |
₹ |
Capital at the end of the year |
16,40,000 |
(+) Drawings during the year |
80,000 |
|
17,20,000 |
(-) Capital introduced during the year |
3,20,000 |
|
14,00,000 |
(-) Capital at the Beginning of the Year |
15,00,000 |
Loss during the year |
(1,00,000) |
Statement of Affairs As on … |
|||
Liabilities |
₹ |
Assets |
₹ |
Sundry Creditors |
33,400 |
Stock |
59,500 |
Capital |
|
Sundry Debtors |
25,900 |
(Balancing Figure) |
62,700 |
Business Premises |
8,600 |
|
|
Machinery |
2,100 |
|
96,100 |
|
96,100 |
Statement of Profit or Loss For the year ended |
|
Particulars |
₹ |
Capital at the end of the year |
62,700 |
(+) Drawings 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 |
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