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.
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:
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.
= ₹ 1,40,000 + ₹ 1,90,000
= ₹ 3,30,000
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
Illustration 14
From the following
details, calculate credit purchases.
Solution
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
Related Topics
Privacy Policy, Terms and Conditions, DMCA Policy and Compliant
Copyright © 2018-2023 BrainKart.com; All Rights Reserved. Developed by Therithal info, Chennai.