Accounts from Incomplete Records

1. Following incomplete information is available from records maintained by Mr. X.

Particulars 1-1-2018 31-12-2018
Cash 1,000 1,500
Bank 8,000 10,000
Debtors 10,000 12,000
Stock 7,000 6,000
Investment in Debentures 20,000 20,000
Creditors 11,000 10,000
Bank Loan 12,000 12,000
During the Year, Mr. X introduced Rs. 10,500 in business. Personal Expense of Mr. X paid
from business account amounted to Rs. 10,000 and goods worth Rs. 5,000 were withdrawn
by Mr. X for personal use.
Prepare a statement of Affairs as on 01-01-2018 and 31-12-2018. Find out profit of Mr. X for
the year Ended on 31.12.2018.

2. Prepare necessary statement showing profit made during the year and the Balance Sheet as
at December 31, 2018 from the following information:
Particulars 1-1-2018 31-12-2018
Cash 5,000 6,000
Bank 15,000 18,000
Debtors 10,000 8,000
Stock 8,000 12,000
Furniture 12,000 12,000
Creditors 4,000 6,000
During the year the proprietor introduced Rs. 4,000 as further capital in the business. He has
withdrawn cash Rs. 20,000 out of which he spent Rs. 15,000 on 1-07-2018 for purchase of a
scooter for business use. Calculate net profit after making following adjustments:
a) Depreciate furniture @ 10% p.a.
b) Depreciate scooter @ 20% p.a.
c) Create provision for doubtful debts @ 5% of debtors balance as on 31.12.2018.

3. A trader does not keep proper books of account. However, he provides the following
information to you:
Particulars 31-03-2018 31-03-2019
Cash at bank 4,500 4,000
Cash in Hand 300 3,000
Stock in Trade 40,000 45,000
Debtors 12,000 20,000
Equipment 5,000 5,000
Creditors 30,000 20,000
Furniture 4,000 4,000
st
During the year ended 31 March, 2019, the trader introduced Rs. 6,000 as additional capital
and withdrew Rs. 4,000 for his personal use. Depreciation is to be provided on furniture at
10% per annum and on equipment at 5% per annum. Prepare a statement showing profit or
loss made by him for the year ended 31st March, 2019.
 Accounts from Incomplete Records

Conversion Method
4. From the following calculate Credit Sales and Credit Purchase:
Particulars Amount
Debtors in the beginning 36,000
Creditors in the beginning 28,800
Debtors at the end 27,000
Creditors at the end 43,200
Cash received from Debtors 2,16,000
Cash Paid to suppliers 1,49,000
Discount allowed by suppliers 1,980
Discount allowed to customers 1,080
Bills received during the year 72,000
Bills issued during the year 57,600
Cash return to customers 3,600
Bad Debts written off 8,640
Bad debts recovered 2,160
Bills endorsed to creditors 28,800
Bills receivable dishonoured 7,200
Endorsed bills dishonoured 3,600
Bills receivable discounted 5,040
Discounted Bills dishonoured 5,040
Return Inwards 4,320
Return Outward 1,440

5. A trader keeps his record under single entry system. From the following particulars you are
required to prepare Trading and Profit and Loss Account and Balance Sheet for the year ended
31st March 2021.
Cash book analysis shows the following:
Particulars Amount
Cash Sales 1,80,000
Received from Credit customers 3,00,000
Payment to suppliers 1,77,000
Salaries 1,55,000
Personal withdrawals 24,000
Interest Paid 1,200
Bank Balance (As on 31-03-21) 29,100
Cash in Hand (As on 31.03.21) 900
Other Business Expenses 44,800
Other particulars were as under:
Particulars As on 31.03.2020 As on 31.03.21
Office Building 1,80,000 1,80,000
Furniture 12,000 12,000
Stock 1,08,000 1,22,640
Creditors 96,000 66,000
Debtors 2,64,000 3,60,000
Provide 5% interest on Capital as on 01-04-2020. Provide Rs. 18,000 for doubtful debts and
5% depreciation on all fixed assets. 5% group incentive commission to staff has to be provided
for on net profit after meeting all expenses and commission.
 Accounts from Incomplete Records

6. Mr. Z keeps his books on single entry system. From the following particulars prepare Trading
and Profit & Loss Account for the year ended 31 st December 2021 and a Balance Sheet as on
that date.
Particulars 31-12-2020 31-12-2021
Furniture 10,000 12,000
Stock 6,000 2,000
Debtors 12,000 14,000
Prepaid Expenses - 4,000
Creditors 4,000 ?
Outstanding Expenses 1,200 2,000
Cash 2,200 600
Receipts and Payments during the year were as follows:
Receipts from debtors 42,000
Paid to creditors 20,000
Carriage Inward 4,000
Drawings 12,000
Sundry Expenses 14,000
Furniture Purchased 2,000
Other Information: There were considerable amount of Cash Sales. Credit purchases during
the year amounted to Rs. 23,000. Provide for doubtful debts to the extent of 10% on debtors.

7. Mr. X commenced business on 1-1-2021 with a Capital of Rs. 99,000. He immediately

purchased computer for Rs. 52,800. During the year he received from his uncle a gift of Rs.
6,600 and he borrowed Rs. 11,000 from his father. He had withdrawn Rs. 1,320 per month for
his household expenses. He had no bank account and dealings were in cash. He did not
maintain any books but following information is given:
Particulars Amount
Sales (Including cash sales of Rs. 66,000) 2,20,000
Purchases (including cash purchase of Rs. 22,000) 1,65,000
Carriage Inward 1,540
Wages 660
Discount allowed to Debtors 1,760
Salaries 13,640
Bad Debt written off 3,300
Trade expenses 2,640
Advertisement 4,840
He used goods worth Rs. 2,860 for personal purposes and paid Rs. 1100 to his son for
examination and college fees.
On 31st December 2021 his debtors were worth Rs. 46,200 and creditors Rs. 33,000. Stock in
trade was valued at Rs. 22,000. Computer to be depreciated by 10% p.a.
Prepare Trading and Profit & Loss A/c for the year ended on 31st December, 2021 and Balance
Sheet as on 31st December, 2021.

8. From the following information prepare final accounts for the year ending on 31 st December
2021.
Particulars Opening Closing
Cash 1,000 ?
Debtors 4,000 ?
Bills Receivable 3,900 ?
 Accounts from Incomplete Records

Stock 8,000 6,000

Fixed Assets 11,000 11,000
Creditors 4,000 ?
Bills Payable 2,000 ?
Cash Transactions during the year:
Receipts from debtors 28,000
Bills Receivable Encashed 10,000
Cash Sales 4,000
Payment to Creditors 15,000
Bills Payable Paid 12,000
Drawings 1,000
Wages and Salaries 10,000
Sundry Expenses 500
Non- Cash Transactions during the year:
Credit Sales 41,000
Credit purchase 30,000
Discount allowed 1,000
Discount received 1,500
Bills Receivable drawn 11,000
Bills Payable accepted 14,000
Adjustments to be made for the preparation of final accounts:
a. 5% provision for doubtful debts
b. 10% depreciation for fixed assets
c. Wages outstanding Rs. 1,000.

9. Mr. X keeps his books according to single entry system. From the following, prepare Trading
and Profit and Loss Account for the year ended 31-03-2022 together with a Balance sheet as
on the date.
Cash book analysis shows the following:
Particulars Amount
Interest Charges 100
Personal Drawings 2,000
Salaries 8,500
Business Expenses 7,900
Payment to Creditors 15,000
Balance at Bank as on 31-03-2022 2,425
Cash in Hand as on 31-03-2022 75
Cash from Debtors 25,000
Cash Sales 15,000
Other particulars were as under:
Particulars As on 01.04.2021 As on 31.03.2022
Stock in Hand 9,000 10,220
Creditors 8,000 5,500
Debtors 22,000 30,000
Furniture 1,000 1,000
Office Premises 15,000 15,000
 Accounts from Incomplete Records

Provide 5% interest p.a. on the capital of X as on 01.04.2021. Provide Rs. 1500 for doubtful
debts. Provide 5% depreciation on all fixed assets.

10. Mohan does not maintain regular books but keeps only a memorandum of his transactions.
He furnishes the following information from the memoranda for the year ended 31st March,
2022:
(i) Total collection from debtors
(ii) Cash sales as collected from cash sales invoiced
(iii) The abstract of the Bank Account for the year ended 31st March, 2022 as given
below:
Cash deposits in collection 23,955 Bank Overdraft as on 01-04-2021 2,400
Interest and Bank Charges 45
Personal Drawing 1,200
Salaries 5,100
General Expenses 4,755
Payment to Creditors 9,000
Balance c/d 1,455
Total 23,955 Total 23,955

(iv) Other balances as on 01 April 2021 are as given below:

Stock 5,400
Debtors 13,200
Furniture 600
Building 9,000
Creditors 4,800
Cash in Hand 50

(v) He purchased one second hand scooter for Rs. 600 on 1st January 2021.
(vi) Beside the cash balance with the cashier the following are the other balances as
on 31st March 2022: Stock – Rs. 6,120, Debtors – Rs. 18,000, Creditors – Rs. 3,300.

Prepare the Profit and Loss account for the year ended 31st March 2022 and a Balance sheet
as on 31st March 2022 after providing for depreciation @10 % p.a. on all fixed assets.

Practice Questions:

11. A sole Proprietor does not maintain complete books of account. From the following
information, prepare Trading and Profit & Loss Account for the year ended 31 st March 2022
and Balance Sheet as at that date:
31-03-21 31-03-22
Debtors 90,000 1,25,000
Stock 49,000 66,000
Furniture 5,000 7,500
Creditors 30,000 22,500
Transaction during the year ended 31st March 2022:
Cash Collected from Debtors 3,04,000
 Accounts from Incomplete Records

Cash Paid to Creditors 2,20,000

Salaries 60,000
Rent 7,500
Office Expenses 9,000
Drawings 15,000
Fresh Capital Introduced 10,000
Cash Sales 7,500
Cash Purchase 25,000
Discount received 3,500
Discount Allowed 1,500
Return Inwards 5,000
Return Outwards 4,000
Bad Debts 1,000
New Furniture Purchased 2,500
He had Rs. 25,000 cash at the beginning of the year.

12. A submits to you the following figures relating to his business in respect of the year, ending
31st December 2021. You are required to prepare a Trading and Profit & Loss Account for the
year ended, and a Balance Sheet as on 31st December 2021. Any difference in the cash balance
is assumed to be drawings:
Cash Paid into Bank 1,50,000
Private dividends paid into Bank 2,000
Private payments out of bank 26,000
Payments for goods out of Bank 1,22,000
Cash received from Debtors 2,50,000
Payments for Goods by Cash and Cheques 1,60,000
Wages 40,000
Delivery Expenses 7,000
Rents & Rates 2,000
Lighting and Heating 1,000
General Expenses 4,600
The Assets and Liabilities are as follows:
01-01-2021 31-12-2021
Stock 20,000 15,000
Bank Balance 8,000 12,000
Cash in hand 300 400
Trade Debtors 14,000 20,000
Trade Creditors 27,300 30,000
Investments 50,000 50,000

13. You are given:

(a) The Balance Sheet of X on 1st April 2021
(b) The cash Transactions for the year upto 31st March 2022.
(c) The summary of the remaining transactions for the year upto 31st March 2022.
 Accounts from Incomplete Records

Balance Sheet as on 01-04-2021

Liabilities Amount Assets Amount
Creditors 3,600 Cash in hand 70
Bank Overdraft 500 Bills Receivable 2,500
Capital 20,000 Sundry Debtors 3,900
Bills Payable 1,600 Stock 7,530
Plant and Machinery 4,700
Land and Building 7,000
25,700 25,700

Cash Transactions for the year

Particulars Amount Particulars Amount
To Balance b/d 70 By Balance b/d 500
(Overdraft)
To Debtors A/c 29,000 By Salaries 4,900
To Sales 10,000 By Wages 1,580
To Bills Receivable 3,700 By Bills Payable 14,300
By payment to creditors 14,700
By Office Expenses 800
By Drawings 4,500
By Investment at Par 1,000
(9% GP Notes)
Cash in hand 40
Cash at Bank 450
42,770 42,770

Summary of remaining transactions:

Sales (Credit) 40,700
Discount to customer 200
Purchases 30,000
Discount earned 100
Bills Receivable received 10,900
Bills Payable issued 15,000
Closing stock of Goods 5,300
Provide for doubtful debts at 5% on debtors outstanding. Provide for depreciation on Plant
and Machinery at 5% and on Land and building at 2.5%. Prepare Trading and Profit & Loss
Account for the year ended 31st March, 2008 and Balance Sheet on the date.

14. The books of account of Krishna of Mumbai showed the following figures –
Opening Closing
Furniture & Fixtures 2,60,000 2,34,000
Stock 2,45,000 3,20,000
Debtors 1,25,000 ?
Cash & Bank 1,10,000 ?
Creditors 1,35,000 1,90,000
Bills Payable 70,000 80,000
Outstanding Salaries 19,000 20,000
An analysis of the Cash book revealed the following –
 Accounts from Incomplete Records

Particulars Amount Particulars Amount

Cash Sales 16,20,000 Payment for Bills Payable 4,30,000
Collection from Debtors 10,58,000 Drawings for Domestic Exps 1,20,000
Discount allowed to Debtors 20,000 Salaries Paid 2,36,000
Cash Purchases 6,15,000 Rent paid 1,32,000
Payment to Creditors 9,73,000 Sundry Trade Expenses 81,000
Discount received from Creditors 32,000
Depreciation is provided on Furniture and Fixtures at 10% p.a. on WDV Method. Krishna
maintains a steady GP Rate of 25% on Sales. You are required to prepare Trading and P/L
account for the year ended 31st March, 2022 and Balance Sheet as on that date.

15. The following information relates to the business of Gangadhar, who requests you to
prepare a Trading and Profit and Loss A/c for the year ended 31st March, 2022 and a
Balance Sheet as on that date –
Opening Closing
Building 3,20,000 3,60,000
Furniture 60,000 68,000
Motor Car 80,000 80,000
Stock - 40,000
Bills Payable 28,000 16,000
Cash 1,80,000 1,04,000
Debtors 1,60,000 -
Bills Receivable 32,000 28,000
Creditors 1,20,000 -
Cash transactions during the year included the following besides certain other items –

Particulars Amount
Cash Sales 80,000
Collection from Debtors 2,00,000
Sale of Old Papers and Miscellaneous Income 20,000
Cash Purchases 48,000
Payment to Creditors 1,84,000
Miscellaneous Trade Expenses (including Salaries etc) 80,000
Other Information:

1. Bills Receivable drawn during the year amounts to 20,000 and Bills Payable accepted were
Rs. 16,000.
2. 2. Some items of old Furniture, whose written Down Value at year beginning was Rs. 20,000
was sold on 30th September for Rs. 8,000. Depreciation is to be provided on Buildings and
Furniture at 10% p.a. and on Motorcar at 20% p.a. Depreciation on sale of Furniture to be
provided for 6 months and for additions to Building for the whole year.
3. Of the Debtors, a sum of Rs. 8,000 should be written off as Bad Debt, and a Reserve for
Doubtful Debts is to be provided at 2%.
4. Gangadhar has been maintaining a steady Gross Profit Rate of 30% on Turnover.
5. Outstanding Salary at the year-beginning was Rs. 8,000 and at the year-end was Rs. 10,000.
6. At the beginning of the year, the Profit and Loss Account had a Credit Balance of 40,000.
7. 20% of Total Sales and Total Purchases are to be treated as for Cash.
8. Additions in Furniture A/c took place in the beginning of the year and there was no Opening
Provision for Doubtful Debts.