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Chapter: 12th Accountancy : Accounts from Incomplete Records

Accounts from Incomplete Records | Accountancy | Study Material, Lecturing Notes, Assignment, Reference, Wiki description explanation, brief detail |

Preparation of final accounts from incomplete records

Steps to be followed to prepare final accounts from incomplete records: Following are the steps to be followed to prepare final accounts from incomplete records:

Preparation of final accounts from incomplete records

When books of accounts are incomplete, information regarding revenues, expenses assets and liabilities is not known fully. Hence, it becomes difficult to prepare trading and profit and loss account and balance sheet. But with the available data, the missing figures can be found out and then the final accounts can be prepared.

 

1. Steps to be followed to prepare final accounts from incomplete records

Following are the steps to be followed to prepare final accounts from incomplete records:

1. Opening statement of affairs is to be prepared, to ascertain the opening capital.

2. Missing figures must be found out with the available data.

This can be done by preparing memorandum accounts or by making necessary adjustments to the existing figures. For example,

(a) It may become necessary to prepare a cash book to find out the missing items such as cash purchases, cash sales, etc.

(b) By preparing total debtors account and total creditors account, credit sales and credit purchases can be ascertained respectively.

(c) Bills receivable account and bills payable account are to be prepared to find out the balances of bills receivable received and bills payable accepted respectively.

3. The final step is to prepare trading and profit and loss account and balance sheet.

Formats of important accounts, that is, total debtors account, bills receivable account, total creditors account and bills payable account are given below:

 

(i) Format of total debtors account


 

Illustration 10

Find out credit sales from the following information:


Solution


 

Illustration 11

From the following details find out total sales made during the year.


 Total Sales = Cash Sales + Credit Sales 

= ₹ 1,40,000 + ₹ 1,90,000 

= ₹ 3,30,000


(ii) Format of bills receivable account


 

Illustration 12

From the following particulars, prepare bills receivable account and compute the bills received from the debtors.


Solution


 

Illustration 13

From the following particulars, calculate total sales.


Solution


 

(iii) Format of total creditors account


 

Illustration 14

From the following details, calculate credit purchases.


Solution


 

(iv) Format of bills payable account


 

Illustration 15

From the following particulars calculate total purchases.


Solution


Total purchases = Cash purchases + Credit purchases 

= ₹ 3,20,000 + ₹ 4,80,000 = ₹ 8,00,000

 

Illustration 16

From the following details you are required to calculate credit sales and credit purchases by preparing total debtors account, total creditors account, bills receivable account and bills payable account.


Solution



 

Illustration 17

From the following details of Abdul who maintains incomplete records, prepare Trading and Profit and Loss account for the year ended 31st March, 2018 and a Balance Sheet as on the date.


Solution




 

Illustration 18

Bharathi does not maintain her books of accounts under double entry system. From the following details prepare trading and profit and loss account for the year ending 31st March, 2019 and a balance sheet as on that date.


Other information:


Additional information: ₹₹

(i) Credit purchases 74,000

(ii) Credit sales 1,40,000

(iii) Opening capital 2,22,000

(iv) Depreciate machinery by 10% p.a.

Solution




 

Illustration 19

Arjun carries on grocery business and does not keep his books on double entry basis.

The following particulars have been extracted from his books:


Other information for the year ending 31-3-2019 showed the following:

Advertising ₹ 4,700

Carriage inwards ₹ 8,000

Cash paid to creditors ₹ 64,000

Drawings ₹ 2,000

Total sales during the year were ₹85,000. Purchases returns during the year were ₹ 2,000 and sales returns were ₹ 1,000. Depreciate plant and machinery by 5%. Provide ₹ 300 for doubtful debts. Prepare trading and profit and loss account for the year ending 31st March, 2019 and a balance sheet as on the date.

Solution



 

Illustration 20

Pandian does not keep his books under double entry system. From the following information prepare trading and profit and loss account and balance sheet as on 31-12-2018.


Write off depreciation of 5% on furniture. Create a provision of 1% on debtors for doubtful debts.

Solution




 

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Study Material, Lecturing Notes, Assignment, Reference, Wiki description explanation, brief detail


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