CA INTERMEDIATE

⑪
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nee
-

e
End
-

-
-
->
Assets liab
-
-
/ -
infloss
-

---
S & LIABILITIES
- Transaction/Cash Book /
Alab
I
-

↓
Statement of Affairs Method Final Accounts Method
III
SOA 31 3-22
:
SOA 31 3-23
:
statement of Profit/loss
Capital Land Capital Land Balance sheet .
(31 .
3 .
22) Mach (31 3 23)
- -

Mack ↓

Building Building Being Basheet

Bank Loan stock Bank Loan stock
cast creditors
?
creditors cast
Debtoss - - -
Debtors
Trading/PeL
-
- - - -
- -

Capital al
Opening capital SOO #
Balance sheet
To cast
By cash
fal.
,
200 , 108

(drawings) (introduced)
P2L 600
By ,

closing capital 1000 Cnet profit)

sing
-- -
-
-

CA Tejas Suchak
 ACCOUNTS FROM INCOMPLETE RECORDS 14.11

- isks
-
Illustration 3
A and B are in Partnership having Profit sharing ratio 2:1. The following information
is available about their assets and liabilities:
31-3-20X1 31-3-20X2
` `
v Furniture 1,20,000
-
?
-

Advances
r
~ 70,000
-
-
50,000
Creditors
an 32,000
-
30,000
-

aDebtors 40,000
-
45,000
n

~
Inventory 60,000 74,750
- -

WLoan 80,000
-
—
~Cash at Bank 50,000
-
1,40,000
-

The partners are entitled to salary @ ` 2,000 p.m. They contributed proportionate
=
-

capital. Interest is paid @ 6% on capital and charged @ 10% on drawings.

e -- -
I -
-
-

Drawings of A and B
-
en I I

A B
` `
April 30 = 2000 x 10% X 11112 =
③
53 2,000 —
May 31 — 2000
= 2000 x 10% X 10/12 =
0
534
June 30 -
4000 x % X 9112
10 = 4,000 —
Sept. 30 = 6000 x 10%- x 6112 = — 6,000
Dec. 31 =
2000 x %. X 3/12
10 = 2,000 —
Feb. 28 =8000 x 10% x 1/12= — 8,000
On 30th June, they took C as 1/3rd partner who contributed ` 75,000. C is entitled to
-

share of 9 months’ profit. The new profit ratio becomes 1:1:1. A withdrew his
-

proportionate share. Depreciate furniture @ 10% p.a., new purchases ` 10,000 may be
depreciated for 1/4th of a year.
Current account as on 31-3-20X1: A ` 5,000 (Cr.), B ` 2,000 (Dr.)
Prepare Statement of Profit, Current Accounts of partners and Statement of Affairs as on
> -

31-3-20X2.
-
- - -

© The Institute of Chartered Accountants of India

 CA INTERMEDIATE
SOA

31 1 3 21
. 3 13 22 . 3 1 3 21
- .
31322

Capital A 150000 7500 Furniture 120000 117758

B 75000 75000 Advances 700oo'
50000

40000
-

C 75000 Debtors 45008

a

↑ -

current
Inventory
A 5000 74035 00000 Th750
-
1

B -
48321 casn at Bank 50000
I
140000
-

C -
50143 current al : ⑬ 2000
-

creditors 32000 30000

1

zoan 80000 ↑
O

furniture : 120000 +
10000
,
-
12250 : 117750
↑
-

stat . of Profit
combined Current all
To PCL app (int
,
on draw) A 533 OB A 5000(r
:
.
B : 2000DU . 3000

B 533
By ,
P21
app(salary) A 1000 x 12
:

B 2000 X 12
24000
24000
=

To Cash
.
A 2000 2 =
2000 x9 18000
B 16000
By ,
P21 app (int on cap) A =
150000x5Y x3/12
. 2250

75000x5 x91123375
.

B =
75000x6%. x12112 4500
2 =
75000x0%x9/123375

CB 172500
- -
-
- By ,
P2L 15066
-
-
- -

current all
A B 2 A B C

To bal.
2000
By bal
,
5000

To P21 app 533 533

By P21 app 24000 24000 18000
-

,
,

To cash ,
8000 16000 -

By P21 app
,
562545803375

By .
P2L 479433835428768
-

To bal,
ad 7403548321 50143
-

115000
ils do
3M qu
28766 86300
↓ ↓
- (1) -(1)
I

A(2) B() ()
=19177 9588 28766 28766 = 28 768
CA Tejas Suchak
=
=
= .
 ACCOUNTS FROM INCOMPLETE RECORDS 14.15

Illustration 4
The Income Tax Officer, on assessing the income of Shri Moti for the financial years 20X0-
20X1 and 20X1-20X2 feels that Shri Moti has not disclosed the full income. He gives you
the following particulars of assets and liabilities of Shri Moti as on 1st April, 20X0 and
1st April, 20X2.
`
1-4-20X0 Assets : Cash in hand 25,500
! Inventory 56,000
3 :
Sundry debtors 41,500
↳ :
Land and Building 1,90,000
Wife’s Jewellery 75,000
Liabilities
"
: Owing to Moti’s Brother
Sundry creditors
40,000
35,000
1-4-20X2 Assets : 1 Cash in hand
a 16,000
2 . Inventory 91,500
3 :
Sundry debtors 52,500
4 .
Land and Building 1,90,000
5 :

Motor Car 1,25,000

6 :
Wife’s Jewellery 1,25,000
To Loan to Moti’s Brother 20,000
Liabilities : 12 Sundry creditors 55,000
During the two years the domestic expenditure was ` 4,000 p.m. The declared
incomes of the financial years were ` 1,05,000 for 20X0-20X1 and ` 1,23,000 for
20X1-20X2 respectively.
State whether the Income-tax Officer’s contention is correct. Explain by giving your
workings.
Solution
Capital Account of Shri Moti

1-4-20X0 1-4-20X2
` ` ` `
Assets
Cash in hand 25,500 16,000

© The Institute of Chartered Accountants of India

ILLUSTRATION 4
CA INTERMEDIATE
SOA
Liab .
104 20
:
104 22 . Asset 1 4 20
: : 1 4 22
. -

Capital (bal- 313000

....
565000 Cash 25500 16000
I

91500
inventory 56000
415005256
Debtors I

Moti; Bro 40000 land 190000 190000

Owing
to -

creditor 35000 53000 wifes 75500

/
1

Motor Car
Jewellery /
125500
1

125800
-

Loan to Moti's brother 20000

I

-
- -
-

Capital all fit p

-
1.4 20-31 3 22
- . .

To cash
,
96
,000 Opening balance 313000
1

By ,
POL (bal) 348000
-

nosing balance 565000

·

-
- -
-

Undisclosed In= 348000 ~ 228000

-
120000/-
-

CA Tejas Suchak
 14.26 ACCOUNTING

c. Take in to account all the information given

d. Close all the accounts one by one logically, finding out missing figures and
posting them to second account concerned. e.g. you can find cash collected
from debtors from cash account , then post it to debtors account and find
closing debtors etc.
e. Complete the trading account, profit and Loss account and then balance
sheet.
Single entry problem is just like su do ku, one must be able to find out missing
figures logically and sequentially
Illustration 5
The following information relates to the business of Mr. Shiv Kumar, who requests
you to prepare a Trading and Profit & Loss Account for the year ended 31st March,
20X2 and Balance Sheet as on that date:
(a)
Balance as on Balance as on
31st March, 20X1 31st March, 20X2
` ` => 60000

Building A 3,20,000 3,60,000

>
-> 20000

Furniture 60,000 68,000 00

B
3888
Motorcar 80,000 80,000
Inventory ? 40,000
Bills payable A
-
28,000 16,000
Cash and bank balances D 1,80,000 1,04,000

Ergo
e
- I

Sundry debtors A 1,60,000 ?

Bills receivable A 32,000 28,000 -

Sundry creditors 1,20,000 ?

0
O
(b) Cash transactions during the year included the following besides certain other
R

-
-

items:
` `
Sale of old papers and Cash purchases 48,000
miscellaneous income 20,000 Payment to creditors 1,84,000

© The Institute of Chartered Accountants of India

 balance of debtors OB+S Cash-D-B D
D-
- -
.

=2B -
-

ACCOUNTS FROM INCOMPLETE RECORDS 14.27

⑬ Miscellaneous Trade expenses

(including salaries etc.) 80,000
Cash sales 80,000

Collection from debtors 2,00,000

(c) Other information:
• Bills receivable drawn during the year amount to ` 20,000 and Bills
payable accepted ` 16,000.
• Some items of old furniture, whose written down value on 31st March,
20X1 was ` 20,000 was sold on 30th September, 20X1 for ` 8,000.
Depreciation is to be provided on Building and Furniture @ 10% p.a. and
on Motorcar @ 20% p.a. Depreciation on sale of furniture to be provided
for 6 months and for additions to Building for whole year.
• Of the Debtors, a sum of ` 8,000 should be written off as Bad Debt and a
reserve for doubtful debts is to be created @ 2%.
• Mr. Shivkumar has been maintaining a steady gross profit rate of 30% on
turnover.
• Outstanding salary on 31st March, 20X1 was ` 8,000 and on 31st March,
-

20X2 was ` 10,000. On 31st March, 20X1, Profit and Loss Account had a
credit balance of ` 40,000.
• 20% of total sales and total purchases are to be treated as for cash.
• Additions in Furniture Account took place in the beginning of the year
and there was no opening provision for doubtful debts. X21K
x10Y
Solution 20000
->
60000-2000 - -
-
-

Mr. Shiv Kumar 40000=

-
-
68000

Trading and Profit and Loss Account

for the year ended 31st March, 20X2

` `
To Opening inventory By Sales (3,20,000 x 4,00,000
(balancing figure) 80,000 100/80)
By Closing inventory 40,000
To Purchases 2,40,000
(1,92,000 x 100/80)

© The Institute of Chartered Accountants of India

 CLASS NOTES: CA -
FOUNDATION Inter -
-

I lustration 5 : -

and PCLak f t y e
Trading 31 3 22
- - . . . .

I
opening stock (bal) 80000
↑
·

Sales : cash 80000

I

Purchases :
Cash 48000 credit 320000 400000
- -
1

credit 196000
-240000 .

Gross Profit 130%) 120000

-

-
-
closing Stock 40000
-
-↑

loss on sale of furniture 1000

I
GrOSS Profit 120000
-
I

Depreciation
:
furniture sold 1000 Miscellaneous Income 20000
↑

Furniture rem. 6808

Builde ig 36000
-

Motor car 16000

-

Baddelts :
n/off 8000
/

provision 12 %) 5040 I

Salary 82000
~
Net Loss /bal ·

fig )
.
25840
↳

-
-
-
-

Balance sheet as on 31 322 .

Capital
:

opening bal 716000

. Building (360000 ·
-

36000) 324000
& I

furniture (68000-6800) 61 200

I

P21 :
op ·
bal .
40000 Motor car (80000
I
-
16
,
000) 64000
I

less :

net ross (25840) 14160

1
stock 40000
-

cash & bann 104000

-

Bills
Payable 16000
&
Debtors 252008

creditors 12000
.
less :

provision for D D . -

-0 246960
-
-

ols
salary 10000
&
Bills Receivable 28000
/

-
- -

868160 868160
-
= -

CA Tejas Suchak
working ! -
CLASS NOTES: CA FOUNDATION Inter
Noles Balance sheet
-
as on 313-21
-
-
Capital (bal) 716000
. Building 300000
- 7

furniture 60000
↑

P2L 40000 Motor Car 80000

I
-

Bills
Payable 28000
I
stock 80000
2

creditors 120000 Cash & bank 180000

- S

Debtors
ols salary 8008
&
160000
-

Bills Receivable 32000

- -
-

Building
bal old 320000
- By depreciation
,
36 000
.

To ,
cask 40000 op . bal :

320000 x 10% x 121

,2 32000
=

I -

Add :

40000 x 10% x12/12 =

4000

-
bal 4d 324000
↑
- - -
A

Furniture
-

Op bal
-
.

(60000-20000) 60000
&
By , depreciation 1000

To ,
cask E
6000
-
28000
1
By ,
bank /ash 8000
/

By . P21 1000
-

By , depreciation 6800

C -
bal 68000 61200
-
- -
- -
↑
-

Motor Car

op bal 80000
By depreciation 16000
. .

,
-
/

Le bal . .
64000
- S
-
-
-

Bills
Payable
Op Dal .
.

20000
To cash (bal)
,
28000
By , creditors 16000
I
1

U bal
.
.

16000
-
S
- -
-

CA Tejas Suchak
 CLASS NOTES: CA FOUNDATION
cashebank al

bal
op .

180000, By , purchases 48000

↑

To cedetous
,
miss inc . .
20000
- By , 184008
-
&

To debtors 200000 By salary (misc

,
.
trade expl 80000
,
- -

40000
·

To sales ,
80000
↑
By but ding 7

To Furniture
.
8000
,
By furniture
,
28000
↳

To bills receivable
,
--
-
24000 By .
bills
payable 28000 ↑

DCOLOR U bal
- .

00
-
·

200000
Op Dal 160000
By Cash
.
-
.

- -

To ,
sales 320000
- By , bills receivable 20000
I

baddelts
By ,
8000
S

- -
- -
n .
bal .

(bal .

) 252000
-
-

Bills Receivable

op-bal .
32000
&

To debtors
,
20000
·
By , cask (bal) 24000
&

C bal .
28000
-
I
- -
-

creditors

Op .
Dall 120000
·

To ,
cash 184000
- By , purchases 192000
-

To bills 16000
,
payable ,

u bal . .

(bal 12000
-- -
- -
- - -

Salary all

bal 8000
op . .

To ,
cash 80000
I

By , P22 (bal ) .
82000
7

U bal . -
10000
&
- -
- -

CA Tejas Suchak
 -
CLASS NOTES: CA FOUNDATION -
Inter

uniture
31/3/21 3019121
WDY 20000 D 20000 x 10 % x 6112 WDX =
1900P
=
=

/ /

sp
e
- 1000

I
Depreciation Dr
. 1000

To furn
,
1000 Bank Dr .
8000

v P2L Dr .
11000
-

To furn
,
19000
S

~
Aure -Op bal 1000 W
20008
: .
:
60000 -
-

S
4000
28000
S
-
Depu =
2800r

es
Total sales cash credit

100 20 80

400000 20000 320000

-
· &

Purchases :
-
-

Total Purchase case credit

100 20 80

240000 48008 192000

- ↑ ·

-> STEP BY STEP

effect blank
Amount
missing Double
-> amount
pass
: ;

-> All steps over :

accounts balance

BIs
->
Opening balance
:

balance
-
Trading
-> POL balance

-> B/s balance .

CA Tejas Suchak