# Accounts from Incomplete Records – Ascertainment of Profit or Loss by Statement of Affairs Method

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This page contains solutions/answers to Accounts from Incomplete Records – Ascertainment of profit or loss by statement of affairs method (OR) Calculation of profit or loss and ascertainment of statement of affairs at the end of the year (Opening Balance is given) (OR) Ascertainment of statement of affairs at the beginning and at the end of the year and calculation of profit or loss numerical questions. If you’re looking for answers/solutions to the theoretical questions or the numerical questions related Accounts from Incomplete Records – Ascertainment of Missing Figures, you can find them at the following pages.

Ascertainment of Profit or Loss by Statement of Affairs method – Numerical Questions Solutions
1. Following information is given below prepare the statement of profit or loss:
Capital at the end of the year
5,00,000
Capital in the beginning of the year
7,50,000
3,75,000
50,000
Statement of Profit or Loss for the year ended …………..
Particulars
Amount
Capital at the end of the year
5,00,000
Drawings during the year
3,75,000
50,000
Adjusted capital at the end of the year
8,25,000
Capital in the beginning of the year
7,50,000
Profit or Loss made during the year
75,000
2. Manveer started his business on January 01, 2013 with a capital of ₹ 4,50,000. On December 31, 2013 his position was as under:
Cash
99,000
Bills Receivable
75,000
Plant
48,000
Land and Building
1,80,000
Furniture
50,000
He owned ₹ 45,000 from his friend Susheel on that date. He withdrew ₹ 8,000 per month for his household purposes. Ascertain his profit or loss for this year ended December 31, 2013
Books of Manveer
Statement of Affairs as on December 31, 2013
Liabilities
Amount
Assets
Amount
Loan
(Borrowed from Susheel)
45,000
Cash
99,000
Closing Capital
(Balancing Figure)
4,07,000
Bills Receivables
75,000
Plant
48,000
Land and Building
1,80,000
Furniture
50,000
4,52,000
4,52,000
Working Notes:
Drawings for 12 months = 12 × 8,000 = 96,000
Statement of Profit or Loss for the year ended December 31, 2013
Particulars
Amount
Capital at the end of the year
4,07,000
Drawings during the year1
96,000
Adjusted capital at the end of the year
5,03,000
Capital in the beginning of the year
4,50,000
Profit or Loss made during the year
53,000

3. From the information given below ascertain the profit for the year :
Capital at the beginning of the year
70,000
Additional capital introduced during the year
17,500
Stock
59,500
Sundry debtors
25,900
8,600
Machinery
2,100
Sundry creditors
33,400
26,400
Statement of Affairs as on …………
Liabilities
Amount
Assets
Amount
Sundry Creditors
33,400
Stock
59,500
Closing Capital
(Balancing Figure)
62,700
Sundry Debtors
25,900
8,600
Machinery
2,100
96,100
Stock
96,100
Statement of Profit or Loss
Particulars
Amount
Capital at the end of the year
62,700
Drawings during the year
26,400
17,500
Adjusted capital at the end of the year
71,600
Capital in the beginning of the year
70,000
Profit or Loss made during the year
1,600
4. From the following information, Calculate Capital at the beginning :
Capital at the end of the year
4,00,000
60,000
Fresh Capital introduced during the year
1,00,000
Profit of the current year
80,000
We have the formula,
Profit or Loss
=
Capital at end – Capital at beginning + Drawings during the year – Capital introduced during the year
Rearranging for the case of profit, we have
Capital at beginning
=
Capital at end + Drawings during the year – Capital introduced during the year – Profit
=
4,00,000 + 60,000 – 1,00,000 – 80,000
=
2,80,000
Note: There is a typo in the answer given in the text book where in it is given as 2,60,000 instead of 2,80,000

5. Following information is given below : calculate the closing capital
Jan. 01, 2013
Dec. 31, 2013
Creditors
5,000
30,000
Bills payable
10,000
Loan
50,000
Bills receivable
30,000
50,000
Stock
5,000
30,000
Cash
2,000
20,000
Statement of Affairs as on Jan. 01, 2013
Liabilities
Amount
Assets
Amount
Creditors
5,000
Bills Receivable
30,000
Bills Payable
10,000
Stock
5,000
Capital
(Balancing Figure)
22,000
Cash
2,000
37,000
37,000
Statement of Affairs as on Dec. 31, 2013
Liabilities
Amount
Assets
Amount
Creditors
30,000
Bills Receivable
50,000
Loan
50,000
Stock
30,000
Capital
(Balancing Figure)
20,000
Cash
20,000
1,00,000
1,00,000
Statement of Profit or Loss as on Dec.31, 2013
Particulars
Amount
Capital at the end of the year
20,000
Capital in the beginning of the year
22,000
(2,000)
Calculation of profit or loss and ascertainment of statement of affairs at the end of the year (Opening Balance is given)

6. Mrs. Anu started firm with a capital of ₹ 4,00,000 on 1st July 2013. She borrowed from her friends a sum of ₹ 1,00,000 @ 10% per annum (interest paid) for business and brought a further amount to capital ₹ 75,000 on Dec. 31, 2013, her position was :
Cash
30,000
Stock
4,70,000
Debtors
3,50,000
Creditors
3,00,000
He withdrew ₹ 8,000 per month for the year. Calculate profit or loss for the year and show your working clearly.
Books of Mrs. Anu
Statement of Affairs as on Dec. 31, 2013
Liabilities
Amount
Assets
Amount
Loan
(Borrowed from friends)
1,00,000
Cash
30,000
Creditors
3,00,000
Stock
4,70,000
Capital
(Balancing Figure)
4,50,000
Debtors
3,50,000
8,50,000
8,50,000
Working Notes:
Drawings for 6 months = 6 × 8,000 = 48,000
(From July to December)
Statement of Profit or Loss for the year ended Dec. 31, 2013
Particulars
Amount
Capital at the end of the year
4,50,000
Drawings during the year1
48,000
75,000
Adjusted capital at the end of the year
4,23,000
Capital in the beginning of the year
4,00,000
Profit or Loss made during the year
23,000

7. Mr. Arnav does not keep proper records of his business he provided following information, you are required to prepare a statement showing the profit or loss for the year.
Capital at the beginning of the year
15,00,000
Bills receivable
60,000
Cash in hand
80,000
Furniture
9,00,000
Building
10,00,000
Creditors
6,00,000
2,00,000
Further capital introduced
3,20,000
80,000
Statement of Affairs at the end of the accounting period.
Liabilities
Amount
Assets
Amount
Creditors
6,00,000
Bills Receivable
60,000
Capital
(Balancing Figure)
16,40,000
Cash in Hand
80,000
Furniture
9,00,000
Building
10,00,000
2,00,000
22,40,000
22,40,000
Statement of Profit or Loss at the end of the accounting period.
Particulars
Amount
Capital at the end of the year
16,40,000
Drawings during the year
80,000
3,20,000
Adjusted capital at the end of the year
14,00,000
Capital in the beginning of the year
15,00,000
(1,00,000)
Ascertainment of statement of affairs at the beginning and at the end of the year and calculation of profit or loss.

8. Mr. Akshat keeps his books on incomplete records following information is given below :
April 01, 2013
March 31, 2014
Cash in hand
1,000
1,500
Cash at bank
15,000
10,000
Stock
1,00,000
95,000
Debtors
42,500
70,000
75,000
1,35,000
Furniture
9,000
7,500
Creditors
66,000
87,000
Bills payable
44,000
58,000
During the year he withdrew ₹ 45,000 and introduced ₹ 25,000 as further capital in the business compute the profit or loss of the business.
Books of Mr. Akshat
Statement of Affairs as on April 01, 2013
Liabilities
Amount
Assets
Amount
Creditors
66,000
Cash in Hand
1,000
Bills Payable
44,000
Cash at Bank
15,000
Capital
(Balancing Figure)
1,32,500
Stock
1,00,000
Debtors
42,500
75,000
Furniture
9,000
2,42,500
2,42,500
Books of Mr. Akshat
Statement of Affairs as on March 31, 2014
Liabilities
Amount
Assets
Amount
Creditors
87,000
Cash in Hand
1,500
Bills Payable
58,000
Cash at Bank
10,000
Capital
(Balancing Figure)
1,74,000
Stock
95,000
Debtors
70,000
1,35,000
Furniture
7,500
3,19,000
3,19,000
Statement of Profit or Loss as on March 31, 2014.
Particulars
Amount
Capital at the end of the year
1,74,000
Drawings during the year
45,000
25,000
Adjusted capital at the end of the year
1,94,000
Capital in the beginning of the year
1,32,500
61,500

9. Gopal does not keep proper books of account. Following information is given below:
Jan. 01, 2013
Dec. 31, 2013
Cash in hand
18,000
12,000
Cash at bank
1,500
2,000
80,000
90,000
Sundry debtors
36,000
60,000
Sundry creditors
60,000
40,000
Loan
10,000
8,000
Office equipments
25,000
30,000
Land and Buildings
30,000
20,000
Furniture
10,000
10,000
During the year he introduced ₹ 20,000 and withdrew ₹ 12,000 from the business. Prepare the statement of profit or loss on the basis of given information
Books of Gopal
Statement of Affairs as on Jan 01, 2013
Liabilities
Amount
Assets
Amount
Sundry Creditors
60,000
Cash in Hand
18,000
Loan
10,000
Cash at Bank
1,500
Capital
(Balancing Figure)
1,30,500
80,000
Sundry Debtors
36,000
Office Equipments
25,000
Land and Buildings
30,000
Furniture
10,000
2,00,500
2,00,500
Books of Gopal
Statement of Affairs as on Dec. 31, 2013
Liabilities
Amount
Assets
Amount
Sundry Creditors
40,000
Cash in Hand
12,000
Loan
8,000
Cash at Bank
2,000
Capital
(Balancing Figure)
1,76,000
90,000
Sundry Debtors
60,000
Office Equipments
30,000
Land and Buildings
20,000
Furniture
10,000
2,24,000
2,24,000
Statement of Profit or Loss as on Dec 31, 2013.
Particulars
Amount
Capital at the end of the year
1,76,000
Drawings during the year
12,000
20,000
Adjusted capital at the end of the year
1,68,000
Capital in the beginning of the year
1,30,500
37,500
Note: In the textbook, the profit made during the year is printed with a typo as ₹ 53,500 instead of the actual answer of ₹ 37,500.

10. Mr. Muneesh maintains his books of accounts from incomplete records. His books provide the information :
Jan. 01, 2013
Dec. 31, 2013
Cash
1,200
1,600
Bills receivable
2,400
Debtors
16,800
27,200
Stock
22,400
24,400
Investment
8,000
Furniture
7,500
8,000
Creditors
14,000
15,200
He withdrew ₹ 300 per month for personal expenses. He sold his investment of ₹ 16,000 at 2% premium and introduced that amount into business.
Working Notes:
Profit from sale of investment
=
16,000
×
2
100
=
320
∴ Sale Price of investments
=
16,000 + 320
=
16,320
=
16,320
Drawings
=
12 × 300
=
3,600
Books of Mr. Muneesh
Statement of Affairs as on Jan 01, 2013
Liabilities
Amount
Assets
Amount
Creditors
14,000
Cash
1,200
Capital
(Balancing Figure)
33,900
Debtors
16,800
Stock
22,400
Furniture
7,500
47,900
47,900
Books of Mr. Muneesh
Statement of Affairs as on Dec 31, 2013
Liabilities
Amount
Assets
Amount
Creditors
15,200
Cash
1,600
Capital
(Balancing Figure)
56,400
Bills Receivable
2,400
Debtors
27,200
Stock
24,400
Investment
8,000
Furniture
8,000
71,600
71,600
Statement of Profit or Loss as on Dec 31, 2013.
Particulars
Amount
Capital at the end of the year
56,400
Drawings during the year2
3,600
16,320
Adjusted capital at the end of the year
43,680
Capital in the beginning of the year
33,900
9,780

11. Mr. Girdhari Lal does not keep full double entry records. His balance as on January 01, 2013 is as.
Liabilities
Amount
Assets
Amount
Sundry creditors
35,000
Cash in hand
5,000
Bills payable
15,000
Cash in bank
20,000
Capital
40,000
Sundry debtors
18,000
Stock
22,000
Furniture
8,000
Plant
17,000
90,000
90,000
His position at the end of the year is :
Cash in hand
7,000
Stock
8,600
Debtors
23,800
Furniture
15,000
Plant
20,350
Bills payable
20,200
Creditors
15,000
He withdrew ₹ 500 per month out of which to spent ₹ 1,500 for business purpose. Prepare the statement of profit or loss.
Working Notes:
Drawings for 12 months = 12 × 500 = 6,000
Books of Mr.Muneesh
Statement of Affairs as on Dec 31, 2013
Liabilities
Amount
Assets
Amount
Bills Payable
20,200
Cash in Hand
7,000
Creditors
15,000
Stock
8,600
Capital
(Balancing Figure)
39,550
Debtors
23,800
Furniture
15,000
Plant
20,350
74,750
74,750
Statement of Profit or Loss as on Dec 31, 2013.
Particulars
Amount
Capital at the end of the year
39,550
Drawings during the year1
6,000
1,500
Adjusted capital at the end of the year
44,050
Capital in the beginning of the year
40,000
4,050

12. Mr. Ashok does not keep his books properly. Following information is available from his books.
Jan. 01, 2013
Dec. 31, 2013
Sundry creditors
45,000
93,000
Loan from wife
66,000
57,000
Sundry debtors
22,500
Land and Building
89,600
90,000
Cash in hand
7,500
8,700
Bank overdraft
25,000
Furniture
1,300
1,300
Stock
34,000
25,000
During the year Mr. Ashok sold his private car for ₹ 50,000 and invested this amount into the business. He withdrew from the business ₹ 1,500 per month upto July 31, 2013 and thereafter ₹ 4,500 per month as drawings. You are required to prepare the statement of profit or loss and statement of affair as on December 31, 2013.
Working Notes:
Drawings for first 7 months
=
7 × 1,500
=
10,500
Drawings for next 5 months
=
5 × 4,500
=
22,500
Total Drawings in one year
=
10,500 + 22,500
=
33,000

Books of Mr. Ashok
Statement of Affairs as on Jan 01, 2013
Liabilities
Amount
Assets
Amount
Sundry Creditors
45,000
Dundry Debtors
22,500
Loan from Wife
66,000
Land and Building
89,600
Bank Overdraft
25,000
Cash in Hand
7,500
Capital
(Balancing Figure)
18,900
Furniture
1,300
Stock
34,000
1,54,900
1,54,900
Books of Mr. Ashok
Statement of Affairs as on Dec 31, 2013
Liabilities
Amount
Assets
Amount
Sundry Creditors
93,000
Land and Building
90,000
Loan from Wife
57,000
Cash in Hand
8,700
Furniture
1,300
Stock
25,000
Capital
(Balancing Figure)
25,000
1,50,000
1,50,000
Statement of Profit or Loss as on Dec 31, 2013.
Particulars
Amount
Capital at the end of the year
(25,000)
Drawings during the year1
33,000
(Procured through sale of car)
50,000
Adjusted capital at the end of the year
(42,000)
Capital in the beginning of the year
18,900
Loss incurred during the year
(60,900)
Note: There is a typo in the book where in the answer for the loss incurred during the year was given as 57,900 instead of 60,900

13. Krishna Kulkarni has not kept proper books of accounts prepare the statement of profit or loss for the year ending December 31, 2013 from the following information:
Jan. 01, 2013
Dec. 31, 2013
Cash in hand
10,000
36,000
Debtors
20,000
80,000
Creditors
10,000
46,000
Bills receivable
20,000
24,000
Bills payable
4,000
42,000
Car
80,000
Stock
40,000
30,000
Furniture
8,000
48,000
Investment
40,000
50,000
Bank balance
1,00,000
90,000

(a) Krishna withdrew cash ₹ 5,000 per month for private use.
(b) Depreciation @ 5% on car and furniture @10% .
(c) Outstanding Rent ₹ 6,000.
(d) Fresh Capital introduced during the year ₹ 30,000.

Working Notes:
Drawings for 12 months
=
12 × 5,000
=
60,000
Depreciation on Car
=
80,000
×
5
100
=
4,000
Depreciation on Furniture
=
48,000
×
10
100
=
4,800

Books of Krishna Kulkarni
Statement of Affairs as on Jan 01, 2013
Liabilities
Amount
Assets
Amount
Creditors
10,000
Cash in Hand
10,000
Bills Payable
4,000
Debtors
20,000
Capital
(Balancing Figure)
2,24,000
Bills Receivable
20,000
Stock
40,000
Furniture
8,000
Investment
40,000
Cash at Bank
1,00,000
2,38,000
2,38,000
Books of Krishna Kulkarni
Statement of Affairs as on Dec 31, 2013
Liabilities
Amount
Assets
Amount
Creditors
46,000
Cash in Hand
36,000
Bills Payable
42,000
Debtors
80,000
Outstanding Expenses
6,000
Bills Receivable
24,000
Capital
3,35,200
Car
80,000
(Balancing Figure)
Depreciation2
4,000
76,000
Stock
25,000
Furniture
48,000
Depreciation3
4,800
43,200
Investment
50,000
Cash at Bank
90,000
4,29,200
4,29,200
Statement of Profit or Loss as on Dec 31, 2013.
Particulars
Amount
Capital at the end of the year
3,35,200
Drawings during the year1
60,000
30,000
Adjusted capital at the end of the year
3,65,200
Capital in the beginning of the year
2,24,000
1,41,200

14. M/s Saniya Sports Equipment does not keep proper records. From the following information find out profit or loss and also prepare balance sheet for the year ended December 31, 2013
Dec. 31, 2012
Dec. 31, 2013
Cash in hand
6,000
24,000
Bank overdraft
30,000
Stock
50,000
80,000
Sundry creditors
26,000
40,000
Sundry debtors
60,000
1,40,000
Bills payable
6,000
12,000
Furniture
40,000
60,000
Bills receivable
8,000
28,000
Machinery
50,000
1,00,000
Investment
30,000
80,000
Drawing ₹ 10,000 p.m. for personal use, fresh capital introduce during the year ₹ 2,00,000. A bad debts of ₹ 2,000 and a provision of 5% is to be made on debtors. outstanding salary ₹ 2,400, prepaid insurance ₹ 700, depreciation charged on furniture and machine @ 10% p.a.
Working Notes:
Provision on Debtors
=
×
5
100
=
(1,40,000 – 2,000)
×
5
100
=
1,38,000
×
5
100
=
6,900
Depreciation on Furniture
=
60,000
×
10
100
=
6,000
Depreciation on Machinery
=
1,00,000
×
10
100
=
10,000
Drawings in 12 months
=
12 × 10,000
=
1,20,000

Books of M/s Saniya Sports
Statement of Affairs as on Dec 31, 2012
Liabilities
Amount
Assets
Amount
Bank Overdraft
30,000
Cash in Hand
6,000
Sundry Creditors
26,000
Stock
50,000
Bills Payable
6,000
Sundry Debtors
60,000
Capital
(Balancing Figure)
1,82,000
Furniture
40,000
Bills Receivable
8,000
Machinery
50,000
Investment
30,000
2,44,000
2,44,000
Books of M/s Saniya Sports
Statement of Affairs as on Dec 31, 2013
Liabilities
Amount
Assets
Amount
Sundry Creditors
40,000
Cash in Hand
24,000
Bills Payable
12,000
Stock
80,000
Outstanding Salary
2,400
Sundry Debtors
1,40,000
Capital
(Balancing Figure)
4,33,400
(2,000)
Provision for Doubtful Debts1
6,900
1,31,100
Furniture
60,000
Depreciation2
6,000
54,000
Bills Receivable
28,000
Machinery
1,00,000
Depreciation3
10,000
90,000
Investment
80,000
Prepaid Insurance
700
4,87,800
4,87,800
Statement of Profit or Loss as on Dec 31, 2013.
Particulars
Amount
Capital at the end of the year
4,33,400
Drawings during the year4
1,20,000