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Incomplete Records: Problems You Need To Solve

1) This document discusses how to solve accounting problems when business records are incomplete. It provides methods to calculate profit, draw up a statement of affairs, calculate total sales, calculate total purchases, and calculate stock lost due to fire or theft when full accounting records are not available. 2) Specifically, it outlines how to calculate profit when only opening and closing capital balances are known. It also explains how to reconstruct the sales and purchases ledger control accounts to calculate total sales and purchases for the year when records are missing figures. 3) The document provides an example of a statement of affairs and explains how to calculate closing stock at the time of a theft or fire by constructing a trading account and using mark-up or

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Fegason Fegy
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© © All Rights Reserved
Available Formats
Download as PDF, TXT or read online on Scribd
93 views

Incomplete Records: Problems You Need To Solve

1) This document discusses how to solve accounting problems when business records are incomplete. It provides methods to calculate profit, draw up a statement of affairs, calculate total sales, calculate total purchases, and calculate stock lost due to fire or theft when full accounting records are not available. 2) Specifically, it outlines how to calculate profit when only opening and closing capital balances are known. It also explains how to reconstruct the sales and purchases ledger control accounts to calculate total sales and purchases for the year when records are missing figures. 3) The document provides an example of a statement of affairs and explains how to calculate closing stock at the time of a theft or fire by constructing a trading account and using mark-up or

Uploaded by

Fegason Fegy
Copyright
© © All Rights Reserved
Available Formats
Download as PDF, TXT or read online on Scribd
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Prepared by D.

El-Hoss

Incomplete Records

This section deals with those businesses that do not keep full and proper Accounting
records.

Problems you need to solve:


1. Calculate profit when only the beginning and end Capital balances are known

Closing Capital – Opening Capital = Profit

2. Draw up a statement of affairs

A Statement of affairs is exactly the same as a Balance Sheet. The only difference
is that there are missing figures which you have to calculate and fill in.

Example: If the Assets less Liabilities half of the balance sheet is drawn up, then
the total of Capital for the other half of the Balance sheet must be the same total
as the first half of the Statement of affairs.

3. Calculate the Total Sales for the year

www.igcseaccounts.com
You can re-construct the Sales Ledger Control account and find the missing
figure to make both sides of the ledger account total to be the same.

Cash Sales + end debtors balance + cash received from debtors + discount
allowed + bad Debts + returns Inwards – open debtors balance

SALES LEDGER CONTROL

Jun 1 Balance b/d 10 000 Jun 30 Returns Inwards 2 000


30 Credit Sales 52 000 Bank (Cash Book) 50 000
Discount Allowed 3000
Bad Debts 1000
Balance c/d 6000
62 000 62 000

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Prepared by D. El-Hoss

4. Calculate the Total Purchases for the year

You can re-construct the Purchases Ledger Control Account and find the
missing figure to make both sides of the ledger account total to be the same.

Cash Purchases + end creditors + cash paid to creditors + discount Received +


Returns Outwards – open creditors balance

PURCHASES LEDGER CONTROL


Jun 30 Returns Outwards 3 000 Jun 1 Balance b/d 14 000
Bank (Cash Book) 65 000 Credit Purchases 75 700
Discount Received 700
Balance c/d 21 000
89 700 89 700

5. Calculate Stock lost due to fire or theft

Find the CLOSING STOCK figure at the time of the theft or fire by

www.igcseaccounts.com
constructing the Trading Account

MARK –UP = Gross Profit / Cost Price


MARGIN = Gross Profit / Sales

To change Mark – Up of ¼ to Margin = 1/4+1 (ADD)


To change Margin of 1/5 to Mark-up = 1/5-1 (SUBTRACT)

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