accounts from incomplete records Test - 9

calculation of net profit:-

      gross profit                                                           3950

less: provision for doubtful debts                              320

less: interest on the loan                                            90

   net profit                                                              3540

calculation of profit:-

      opening capital                      50,000     

less: drawing                               10,000

add: aditional capital                 15,000

add: profit                                     x

closing stock                           55,000+x          ..........(1)

now,      closing capital= debtor+stock+cash in hand-credtor

                                     = 1,25,600+24,750+24,980-90,000

                                     = 85130     ........(2)

from (1) & (2)

55,000+x = 85,330

x = 30,330

debtor+ stock + cash in hand =creditor + capital at the end

125600+24750+24980 = 90000 + capital at the end

capital at the end = 85,330 ans.

Debtors on April 01,2005                    RS. 50,000

less: Debtors on March 31, 2005         Rs.70,000

less: Cash received from debtors        Rs.60,000

less: Discount allowed                          Rs.1,000

less: Bills receivable                              Rs.30,000

less: Bad debts                                       Rs.3,000.

total sale                                              Rs. 1,14,000

alternatively, it can be calculated through debtor A/C.

Capital at the end of the year                                               Rs.4, 00,000

add Drawings made during the year                                        Rs.60,000

less: Fresh Capital introduce during the year                       (Rs .1, 00,000)

less: Profit of the current year                                              (Rs.1,00,000)

Capital at the beginning of the year                                       Rs. 2,60,000

in 'accounts from incomplete records system' sometimes for certain transaction both aspects are recorded, for others one aspects are recorded and some transactions are not even recorded. therefore it is an unscientific system of accounting.

if credit sale isn't given it can be calculated by preparing Debtor A/C. the balancing figure in the Debtor A/C shall be considered as the credit sale.

if credit purchase isn't given it can be calculated by preparing creditor A/C. the balancing figure in the creditor A/C shall be considered as the credit purchase.

bill receivable account is generally prepared to know how much amount of bills have been issued to debtors? how much amount of bills have been met at maturity? and how many bills have been dishonoured? etc.

  If opening or closing capitals aren't given then opening or closing statement of affairs needs to be prepared to calculate capitals. a statement of affairs is a statement of all assets and liabilities. The difference between the amount of the two sides is taken as capital. A statement of affairs is just like the balance sheet.