Chapter 16 - Accounts from Incomplete Records-Single Entry System

Question:1
Following information of an accounting year is given:
Opening Capital 60,000; Drawings 5,000; Capital added during the year 10,000 and Closing Capital 90,000. Calculate the
Profit or Loss for the year.
Solution:
Statement of Profit or Loss
Amount
Particulars
Rs
Capital at the end 90,000
Add: Drawings 5,000
95,000
Less: Additional Capital Introduced 10, 000
Adjusted Capital at the end 85,000
Less: Capital in the beginning 60,000
Net Profit for the year 25,000

Question:2
Mayank does not keep proper records of his business, he gives you the following information:

Opening Capital 1,00,000

Closing Capital 1,25,000
Drawings during the year 30,000
Capital added during the year 37,500

Calculate the profit or loss for the year.

Solution:
Statement of Profit or Loss
Amount
Particulars
Rs
Capital at the end 1,25,000
Add: Drawings 30,000
1,55,000
Less: Additional Capital Introduce 37, 500
Adjusted Capital at the end 1,17,500
Less: Capital in the beginning 1,00,000
Net Profit for the year 17,500

Question:3
Capital of Ganesh Gupta in the beginning of the year was 70,000. During the year his business earned a profit of 20,000, he
withdrew 7,000 for his personal use. He sold ornaments of his wife for 20,000, and invested that amount into the business.
Find out his Capital at the end of the year.
Solution:
Capital at the end = Opening Capital + Additional Capital + Profit − Drawings

= 70,000 + 20,000 + 20,000 − 7,000 = Rs 1,03,000

Question:4
Vikas maintains his books of account on Single Entry System. He provides following information from his books. Find out
additional capital introduced in the business during the year 2018–19.
Opening Capital − 1,30,000 Drawings during the year 50,000
Closing Capital − 2,00,000 Profit made during the year 1,00,000
Solution:
Additional Capital = Capital at the End + Drawings − CapitalintheBeginning + Profit
= 2,00,000 + 50,000 − 1, 30, 000 + 1, 00, 000
= 2,50,000 − 2,30,000 = Rs 20,000

Question:5
Mohan maintains books on Single Entry System. He gives you the following information:

Capital on 1st April, 2018 15,200

Capital on 31st March, 2019 16,900
Drawings made during the year 4,800
Capital introduced on 1st August, 2018 2,000

You are required to calculate the Profit or Loss made by Mohan.

Solution:
Statement of Profit or Loss
Amount
Particulars
( )
Capital as on March 31, 2019 16,900
Add: Drawings 4,800
21,700
Less: Addition Capital Introduced 2, 000
Adjusted Capital as on March 31, 2019 19,700
Less: Capital as on April 01, 2018 15, 200
Profit made during the year 2018-19 4,500

Question:6
Mahesh who keeps his books on Single Entry System sells goods at Cost plus 50%. On 1st April, 2018 his Capital was
4,00,000 and on 31st March, 2019 it was 3,50,000. He had withdrawn 20,000 per month besides goods of the sale value of
60,000. How much did he earn in 2018-19?
Solution:
Statement of Profit/Loss
Particulars Amount

Closing Capital as on 31st March, 2019 3,50,000

Less: Opening Capital as on 1st April, 2018 4, 00, 000
Add: Drawings WN1 2,80,000
Profit for the Year 2,30,000

Working Notes:

1)
Question:7
Krishan started his business on 1st April, 2018 with a Capital of 1,00,000. On 31st March, 2019, his assets were:

Cash 3,200
Stock 34,800
Debtors 31,000
Plant 85,000

He owed 12,000 to sundry creditors and 10,000 to his brother on that date. He withdrew 2,000 per month for his personal
expenses. Ascertain his profit.
Solution:
Statement of Affairs
as on March 31, 2019
Amount Amount
Liabilities Assets

Sundry Creditors 12,000 Cash 3,200

Brother’s Loan 10,000 Stock 34,800
Capital (Balancing 1,32,000 Debtors 31,000
Figure)
Plant 85,000

1,54,000 1,54,000

Statement of Profit or Loss

for the year end March 31, 2019
Amount
Particulars

Capital as on March 31, 2019 1,32,000

Add: Drawings Rs2, 000 × 12 24,000
1,56,000
Less: Capital as on April 01, 2018 1, 00, 000
Profit made during the year 2018-2019 56,000

Question:8
Ram Prashad keeps his books on Single Entry System and from them and the particulars supplied, the following figures were
gathered together on 31st March, 2019:
Book Debts 10,000; Cash in Hand 510; Stock-in-Trade estimated
6,000; Furniture and Fittings 1,200; Trade Creditors 4,000; Bank Overdraft 1,000; Ram Prashad stated that he started
business on 1st April, 2018 with cash 6000 paid into bank but stocks valued at 4,000. During the year he estimated his
drawings to be 2,400. You are required to prepare the statement, showing the profit for the year, after writing off 10% for
Depreciation on Furniture and Fittings.
Solution:
Books of Ram Prashad
Statement of Affairs
as on March 31, 2019
Amount Amount
Liabilities Assets

Trade Creditors 4,000 Book Debts 10,000

Bank Overdraft 1,000 Cash in Hand 510
Capital (Balancing Figure) 12,590 Stock 6,000
Furniture and Fittings 1,200
 Less: 10% 120 1,080
Depreciation

17,590 17,590

Statement of Affairs
as on April 01, 2018
Amount Amount
Liabilities Assets
Capital (Balancing Figure) 10,000 Bank 6,000
Stock 4,000

10,000 10,000

Statement of Profit or Loss

for the year and March 31, 2019
Amount
Particulars

Capital as on March 31, 2019 12,590

Add: Drawings 2,400
14,990
Less: Capital as on April 01, 2018 10, 000
Profit made during the year 2018-19 4,990

Question:9
Shruti maintains her books of account from Incomplete Records. Her books provide the following information:

1st April, 2015 31st March, 2016

Cash 1,200 1,600

Bills Receivable … 2,400
Debtors 16,800 27,200
Stock 22,400 24,400
Investments … 8,000
Furniture 7,500 8,000
Creditors 14,900 11,600

She withdrew 500 per month for personal expenses. She sold her Investments of 16,000 at 5% premium and introduced the
amount into business.
You are required to prepare a Statement of Profit or Loss for the year ending 31st March, 2016.
Solution:
Statement of Profit/Loss
Amount
Particulars
Closing Capital 60,000
Less: Opening Capital 33, 000
Less: Additional Capital 16, 800
Add: Drawings 6,000
Profit for the Year 16,200

Working Notes:
 Opening Statement of Affairs
as on April 01, 2015

Dr. Cr.
Amount Amount
Liabilities Assets

Creditors 14,900 Cash 1,200

Capital (Bal. Fig.) 33,000 Debtors 16,800
Stock 22,400
Furniture 7,500

47,900 47,900

Closing Statement of Affairs

Dr. Cr.
Amount Amount
Liabilities Assets
Rs Rs
Creditors 11,600 Cash 1,600
Capital (Bal. Fig.) 60,000 Bills Receivable 2,400
Debtors 27,200
Stock 24,400
Investments 8,000
Furniture 8,000
71,600 71,600

Question:10
Hari maintains his books of account on Single Entry System. His books provide the following information:

1st April, 2018 31st March, 2019

Furniture 2,000 2,000

Stock 28,000 30,500
Sundry Debtors 21,000 34,000
Cash 1,500 2,000
Sundry Creditors 17,500 19,000
Bills Receivable ... 3,000
Loan ... 5,000
Investments ... 10,000

His drawings during the year were 5,000 Depreciate furniture by 10% and provide a reserve for Bad and Doubtful Debts at
10% on Sundry Debtors.
Prepare the statement showing the profits for the year.
Solution:
Statements of Affairs
as on April 01, 2018
Amount Amount
Liabilities Assets

Sundry Creditors 17,500 Furniture 2,000

Capital (Balancing Figure) 35,000 Stock 28,000
Sundry Debtors 21,000
Cash 1,500

52,500 52,500
 Statement of Affairs
as on March 31, 2019

Amount Amount
Liabilities Assets

Sundry Creditors 19,000 Furniture 2,000

Loan 5,000 Less: 10% Depreciation 200 1,800
Capital (Balancing Figure) 53,900 Stock 30,500
Sundry Debtors 34,000
Less: 10% Reserve for Doubtful Debts 3, 400 30,600
Cash 2,000
Bills Receivables 3,000
Investments 10,000

77,900 77,900

Statement of Profit or Loss

for the year ended March 31, 2019
Amount
Particulars

Capital as on March 31, 2019 53,900

Add: Drawings 5,000
58,900
Less: Capital as on April 01, 2018 35, 000
Profit made during the year 2018-19 23,900

Question:11
A commenced business on 1st April, 2018 with a capital of 10,000. He immediately bought Furniture and Fixtures for 2,000.
On 1st October, 2018, he borrowed 5,000 from his wife @ 9% p.a. interestnotyetpaid
and introduced a further capital of his own amounting to 1,500. A drew @ 300 per month at the end of each month for
household expenses. On 31st March, 2019 his position was as follows:
Cash in Hand 2,800; Sundry Debtors 4,800; Stock 6,800; Bills Receivable 1,600; Sundry Creditors 500 and owing for
Rent 150. Furniture and Fixtures to be depreciated by 10%.
Ascertain the profit or loss made by A during 2018–19.
Solution:
Statement of Affairs
as on March 31, 2019
Amount Amount
Liabilities Assets

Wife’s Loan 5,000 Furniture and Fixture 2,000

Add: Outstanding Interest Less: 10% Depreciation 200 1,800
5, 000 × 9 225 5,225 Cash in Hand 2,800
Sundry Creditors 500 Sundry Debtors 4,800
Rent Outstanding 150 Stock 6,800
Capital (Balancing Figure) 11,925 Bills Receivable 1,600

17,800 17,800

Statement of Profit or Loss

for the year ended March 31, 2019
Amount
Particulars

Capital as on March 31, 2019 11,925

Add: Drawings Rs1, 200 × 3 3,600

 15,525
Less: Additional Capital Introduced 1, 500
Adjusted Capital as on March 31, 2019 14,025
Less: Capital as on April 01, 2018 10, 000
Profit made during the year 2018-19 4,025

Question:12
Kuldeep, a general merchant, keeps his accounts on Single Entry System. He wants to know the results of his business on 31st
March, 2019 and for that following information is available:

1st April, 2018 31st March, 2019

Cash in Hand 1,50,000 1,75,000

Bank Balance 7,50,000 8,00,000
Furniture 1,00,000 1,00,000
Stock 5,00,000 6,50,000
Creditors 3,50,000 4,00,000
Debtors 2,50,000 3,00,000

During the year, he had withdrawn 5,00,000 for his personal use and invested 2,50,000 as additional capital. Calculate his
profits on 31st March, 2019 and prepare the Statement of Affairs as on that date.
Solution:
Statement of Affairs
as on April 01, 2018
Amount Amount
Liabilities Assets

Creditors 3,50,000 Cash in Hand 1,50,000

Capital (Balancing Figure) 14,00,000 Bank Balance 7,50,000
Furniture 1,00,000
Stock 5,00,000
Debtors 2,50,000
17,50,000 17,50,000

Statement of Affairs
as on March 31, 2019
Amount Amount
Liabilities Assets

Creditors 4,00,000 Cash in Hand 1,75,000

Capital (Balancing 16,25,000 Bank Balance 8,00,000
Figure)
Furniture 1,00,000
Stock 6,50,000
Debtors 3,00,000
20,25,000 20,25,000

Statement of Profit or Loss

for the year ended March 31, 2019
Amount
Particulars

Capital as on March 31, 2019 16,25,000

Add: Drawings 5,00,000
21,25,000
Less: Additional Capital Introduced 2, 50, 000
 Adjusted Capital as on March 31, 2019 18,75,000
Less: Capital as on April 01, 2018 14, 00, 000
Profit made during the year 2018-19 4,75,000

Question:13
Following information is supplied to you by a shopkeeper:

1st April, 2018 31st March, 2019

Cash 6,000 7,000

Sundry Debtors 68,000 64,000
Stock 59,000 87,000
Furniture 15,000 13,500
Sundry 20,000 18,000
Creditors
Bills Payable 15,000 11,000

During the year, he withdrew 2,500 per month for domestic purposes. He also borrowed from a friend at 9% a sum of 20,000
on 1st October, 2018. He has not yet paid the interest. A provision of 5% on debtors for doubtful debts is to be made.
Ascertain the profit or loss made by him during the period.
Solution:
Statement of Affairs
as on April 01, 2018
Amount Amount
Liabilities Assets

Sundry Creditors 20,000 Cash 6,000

Bills Payable 15,000 Sundry Debtors 68,000
Stock 59,000
Capital (Balancing Figure) 1,13,000 Furniture 15,000

1,48,000 1,48,000

Statement of Affairs
as on March 31, 2019
Amount Amount
Liabilities Assets
Sundry Creditors 18,000 Cash 7,000
Bills Payable 11,000 Stock 87,000
9% Loan from Friend 20,000 Furniture 13,500
Add: Interest
Outstanding 2, 000 × 9 900 20,900
Capital (Balancing Figure) 1,18,400
Sundry Debtors 64,000
Less: 5% Provision
for Doubtful Debts 3, 200 60,800

1,68,300 1,68,300

Statement of Profit or Loss

for the year ended March 31, 2019
Amount
Particulars

Capital as on March 31, 2019 1,18,400

Add: Drawings Rs250 × 12 30,000

 1,48,400
Less: Capital as on April 01, 2018 1, 13, 000
Profit made during the year 2018-19 35,400

Question:14
Vikas is keeping his accounts according to Single Entry System. His capital on 31st December, 2015 was 2,50,000 and his
capital on 31st December, 2016 was 4,25,000. He further informs you that during the year he gave a loan of 30,000 to his
brother on private account and withdrew 1,000 per month for personal purposes. He used a flat for his personal purpose, the
rent of which @ 1,800 per month and electricity charges at an average of 10% of rent per month were paid from the business

60
account. During the year he sold his 7% Government Bonds of 50,000 at 1% premium and brought that money into the
business.
Prepare a Statement of Profit or Loss for the year ended 31st December, 2016.
Solution:
Statement of Profit/Loss

E3
Particulars Amount

Closing Capital 4,25,000

Less: Opening Capital 2, 50, 000
Less: Additional Capital 50, 500
Add: Drawings
Profit for the Year
65,760
1,90,260
ID
U
Note: Drawings include loan to brother, withdrawals in cash, rent and electricity charges.
YG

Question:15
Manu started business with a capital of 4,00,000 on 1st October, 2005. He borrowed from his friend a sum of 1,00,000. He
brought further 75,000 as capital on 31st March, 2006, his position was:
Cash: 30,000; Stock: 4,70,000; Debtors: 3,50,000 and Creditors: 3,00,000.
He withdrew 8,000 per month during this period. Calculate profit on loss for the period.
Solution:
Statement of Affairs
D

for the year ending March 31, 2006

Amount Amount
Liabilities Assets
Rs Rs
U

Creditors 3,00,000 Cash 30,000

Loan from Friend 1,00,000 Stock 4,70,000
Debtors 3,50,000
ST

Capital 4,50,000
(Balancing Figure)
8,50,000 8,50,000

Statement of Profit and Loss

for the year ending March 31, 2006
Amount
Particulars
Rs
Capital as on March 31, 2006 4,50,000
Add: Drawings 48,000
8, 000 × 6
4,98,000
Less: Additional Capital Introduced 75, 000
Adjusted Capital as on March 31, 2006 4,23,000
Less: Capital as on Oct.01, 2005 4, 00, 000
 Profit made during the year 2005-06 23,000

Question:16
From the following information relating to the business of Abhay who keeps books on Single Entry System, ascertain the profit
or loss for the year 2018–19:

1st April, 2018 31st March, 2019

Machinery 8,000 8,000

Furniture 2,000 2,000
Stock 7,000 5,000
Sundry Debtors 4,000 4,500
Bank Balance 200 Cr. 1,800 Dr.
Sundry Creditors 5,000 3,500

Abhay withdrew 4,100 during the year to meet his household expenses. He introduced 300 as fresh capital on 15th January,
2019. Machinery and Furniture are to be depreciated at 10% and 5% p.a. respectively.
Solution:
Statement of Affairs
as on April 01, 2018
Amount Amount
Liabilities Assets

Bank Overdraft 200 Machinery 8,000

Sundry Creditors 5,000 Furniture 2,000
Capital (Balancing Figure) 15,800 Stock 7,000
Sundry Debtors 4,000

21,000 21,000

Statement of Affairs
as on March 31, 2019
Amount Amount
Liabilities Assets

Sundry Creditors 3,500 Machinery 8,000

Capital (Balancing Figure) 16,900 Less: 10% Depreciation 800 7,200
Furniture 2,000
Less: 5% Depreciation 100 1,900
Stock 5,000
Sundry Debtors 4,500
Bank Balance 1,800

20,400 20,400

Statement of Profit or Loss

for the year ended March 31, 2019
Amount
Particulars

Capital as on March 31, 2019 16,900

Add: Drawings 4,100
21,000
Less: Additional Capital Introduced 300
Adjusted Capital as on March 31, 2019 20,700
Less: Capital as on April 01, 2018 15, 800
Profit made during the year 2018-19 4,900
Question:17
Aditya a retailer, has not maintained proper books of account but it has been possible to obtain the following details:

Last Year This Year

Trade Creditors 6,270 5,890

Loan from Naresh 5,000 5,000
Stock 12,350 11,980
Cash in Hand 570 650
Shop Fittings 7,250 7,800
Trade Debtors 5,280 4,560
Bank Balance 3,990 4,130

Calculate the net profit for this year and draft the Statement of Affairs at the end of the year after noting that:
a
Shop Fittings are to be depreciated by 780.
b
Aditya has drawn 100 per week for his own use.
c
Included in the Trade Debtors is an irrecoverable balance of 270.
d
Interest at 5% p.a. is due on the loan from Naresh but has not been paid for the year.
Solution:
In the books of Aditya
Statement of Affairs
PreviousYear
Amount Amount
Liabilities Assets
Trade Creditors 6,270 Stock 12,350
Loan from Naresh 5,000 Cash in Hand 570
Capital (Balancing Figure) 18,170 Shop Fittings 7,250
Trade Debtors 5,280
Bank Balance 3,990
29,440 29,440

Statement of Affairs
CurrentYear
Amount Amount
Liabilities Assets

Trade Creditors 5,890 Stock 11,980

Loan from Naresh 5,000 Cash in Hand 650
Add: Outstanding Interest
5, 000 × 5 250 5,250 Shop Fittings 7,800
Capital (Balancing Figure) 16,930 Less: Depreciation 780 7,020
Trade Debtors 4,560
Less: Bad Debts 270 4,290
Bank Balance 4,130

28,070 28,070

Statement of Profit or Loss

CurrentYear
Amount
Particulars
Rs
Capital of the Current Year 16,930
Add: Drawings Rs100 × 52 5,200
22,130
Less: Capital of the Previous Year 18, 170
Profit made during the Current Year 3,960
Question:18
On 1st April, 2018, X started a business with 40,000 as his capital. On 31st March, 2019, his position was as follows:

Creditors 30,000
Bills Payable 10,000
Bank 10,000
Debtors 50,000
Stock 40,000
Plant 68,000
Furniture 12,000

During the year 2018–19, X drew 24,000. On 1st October, 2018, he introduced further capital amounting to 30,000. You are
required to ascertain profit or loss made by him during the year 2018–19.
Adjustments:
a
Plant is to be depreciated at 10%.
b
A provision of 5% is to be made against debtors.
Also prepare the Statement of Affairs as on 31st March, 2019.
Solution:
Statement of Affairs
for the year ended March 31, 2019
Amount Amount
Liabilities Assets
Creditors 30,000 Bank 10,000
Bills Payable 10,000 Debtors 50,000
Capital (Balancing Figure) 1,30,700 Less: 5% Provision
for Doubtful Debts 2, 500 47,500
Stock 40,000
Plant 68,000
Less: 10% 6, 800 61,200
Depreciation
Furniture 12,000

1,70,700 1,70,700

Statement of Profit or Loss

for the year ended March 31, 2019
Amount
Particulars
Capital as on March 31, 2019 1,30,700
Add: Drawings 24,000
1,54,700
Less: Additional Capital Introduced 30, 000
Adjusted Capital as on March 31, 2019 1,24,700
Less: Capital as on April 01, 2018 40, 000
Profit made during the year 2018-19 84,700

Question:19
Chaman maintains his books according to Single Entry System. Following figures were available from the books for the six
months ended 31st December 2018:

1st July, 2018 31st December, 2018

Plant and Machinery 1,50,000 1,40,000

Debtors 65,000 60,000
Cash and Bank balances 25,000 31,000
Stock 40,000 45,000
Creditors 9,000 10,000

Adjustments:
a
He had withdrawn 200 in the beginning of every month for household purposes.
b
Depreciation on Plant and Machinery @ 10% p.a.

60
c
Further Bad Debts 5,000 and Provision for Doubtful Debts to be created @ 2%.
d
During the period, salaries have been prepaid by 500 while wages outstanding were 1,000.
e

E3
Interest on drawings to be reckoned @ 6% p.a.
You are required to prepare the Statement of Profit or Loss for the half year ended 31st December, 2018, followed by Revised
Statement of Affairs as on that date.
Solution:
Statement of Affairs
as on July 01,2018
Liabilities
Creditors
Capital (Balancing
Figure)
Amount
Assets
9,000 Cash and Bank balances
2,71,000 Debtors
ID Amount

25,000
65,000
U
Stock 40,000
Plant and Machinery 1,50,000

2,80,000 2,80,000
YG

Statement of Affairs
as on December 31,2018
Amount Amount
Liabilities Assets
D

Creditors 10,000 Cash and Bank 31,000

balances
Outstanding Wages 1,000 Debtors 60,000
Capital (Balancing Figure) 2,65,500 Stock 45,000
U

Prepaid Salary 500

Plant and Machinery 1,40,000
2,76,500 2,76,500
ST

Statement of Profit or Loss

for the half year ended December 31,2018
Amount
Particulars
Capital at the end of the year 2,65,500
Add: Drawings made during the year 1,200
Adjusted capital at the end of the year 2,66,700
Less: Capital in the beginning of the year 2,71,000
Gross Loss
ProfitbeforeAdjustment 4,300
Less: Interest on Drawings 21
Add: Depreciation on Plant and Machinery 7,000
Bad Debts 5,000
Provision for Doubtful Debts 1,100
 Net Loss
ProfitAfterAdjustment 17,379

Statement of Affairs
Afteradjustments
as on December 31, 2018
Amount Amount
Liabilities Assets
Creditors 10,000 Cash and Bank balances 31,000
Outstanding Wages 1,000 Debtors 60,000
Capital 2,71,000 Less: Bad Debts 5,000
Less: Net Loss 17,379 55,000
Less: Drawings 1,200 Less: Provision for 1,100 53,900
D.D.
Less: Interest on 21 2,52,400 Plant and Machinery 1,40,000
Drawings
Less: Depreciation 7,000 1,33,000
Stock 45,000
Prepaid Salary 500
2,63,400 2,63,400

Working Notes:
WN1: Depreciation on plant and machinery would be charged for six months only i.e., Rs 7,000
1, 40, 000× 10× 6

( 100× 12
)
WN2: Amount of Provision for Doubtful Debts would be Rs 1,100
2

( 100
× (60, 000 − 5, 000)
)
WN3:
Calculation of Amount of Interest on Drawings:
Date Amount Months Product
Jul. 01 200 6 1,200
Aug. 01 200 5 1,000
Sep. 01 200 4 800
Oct. 01 200 3 600
Nov. 01 200 2 400
Dec. 01 200 1 200
Total 4,200

Interest on Drawings
4, 200× 6× 1
100× 12
= = Rs 21

Question:20
A firm sells goods at a Gross profit of 25% of sales. On 1st April, 2018 the Stock was 40,000; Purchases were 1,10,000 and
the Stock on 31st March, 2019 was 30,000. What was the value of Sales?
Solution:
Cost of Goods Sold = Net Sales – Gross Profit
Cost of Goods Sold = Opening Stock + Purchases – Closing Stock
Cost of Goods Sold = 40,000 + 1,10,000 – 30,000 = 1,20,000
Gross Profit = 25% of Sales or 33.33% of COGS
Gross Profit = 40,000
Net Sales = Cost of Goods Sold + Gross Profit
Net Sales = 1,20,000 + 40,000 = 1,60,000
Question:21
A firm sells goods at Cost plus 25%. Sales to credit customers 3/4oftotal
was 1,80,000. His Opening and Closing Stocks were 20,000 and 15,000 respectively. Find out the value of Purchases.
Solution:
Credit Sales = 1,80,000 3/4ofTotalSales

Total Sales = 2,40,000

Gross Profit = 25% of Cost or 20% of Sales
Gross Profit = 48,000
Cost of Goods Sold = Net Sales – Gross Profit
Cost of Goods Sold = 2,40,000 – 48,000 = 1,92,000
Cost of Goods Sold = Opening Stock + Purchases – Closing Stock
1,92,000 = 20,000 + Purchases – 15,000
Purchases = 1,87,000

Question:22
Calculate Stock in the beginning:

Sales 80,000
Purchases 60,000
Stock at the end 8,000
Loss on Cost 1/6
Solution:
Let cost be Rs 100
Loss = 16.67 1/6of100

Sale = 83.33 100– 16.67

% Loss on Sale = 20% 16.67/83.33

Loss on Sale = 16,000 20

Cost of Goods Sold = Net Sales + Loss on Sale

Cost of Goods Sold = 80,000 + 16,000 = 96,000
Cost of Goods Sold = Opening Stock + Purchases – Closing Stock
96,000 = Opening Stock + 60,000 – 8,000
Opening Stock = 44,000

Question:23
Calculate the Stock at the end:

Stock in the beginning 20,000

Cash Sales 60,000
Credit Sales 40,000
Purchases 70,000
Rate of Gross Profit on Cost 1/3
Solution:
Rate of Gross Profit on Cost = 1/3
Rate of Gross Profit on Sale = 1/4
Total Sales = Cash Sales + Credit Sales
Total Sales = 60,000 + 40,000 = 1,00,000
Gross Profit = 25,000 1/4of1, 00, 000

Cost of Goods Sold = Net Sales – Gross Profit

Cost of Goods Sold = 1,00,000 – 25,000 = 75,000
Cost of Goods Sold = Opening Stock + Purchases – Closing Stock
75,000 = 20,000 + 70,000 – Closing Stock
Closing Stock = 15,000
Question:24
Calculate the value of Closing Stock from the following information:

Purchases 93,000
Wages 20,000
Sales 1,20,000
Carriage Outwards 3,200
Opening Stock 16,000
Rate of Gross Profit 25% on Cost.
Solution:
Rate of Gross Profit on Cost = 1/4
Rate of Gross Profit on Sale = 1/5
Gross Profit = 24,000 1/5of1, 20, 000

Cost of Goods Sold = Net Sales – Gross Profit

Cost of Goods Sold = 1,20,000 – 24,000 = 96,000
Cost of Goods Sold = Opening Stock + Purchases + Direct Expenses – Closing Stock
96,000 = 16,000 + 93,000 + 20,000 – Closing Stock
Closing Stock = 33,000

Question:25
Calculate Purchases:

Cost of Goods Sold 65,000

Stock in the beginning 4,000
Closing Stock 5,000
Solution:
Cost of Goods Sold = Opening Stock + Purchases – Closing Stock
65,000 = 4,000 + Purchases – 5,000
Purchases = 66,000

Question:26
Calculate Sales:
Cost of goods sold 2,00,000
Rate of Gross Profit 20% on Sales
Solution:
Rate of Gross Profit on Sale = 1/5
Rate of Gross Profit on Cost = 1/4
Gross Profit = 50,000 1/4of2, 00, 000

Sales = Cost of Goods Sold + Gross Profit

Sales = 2,00,000 + 50,000 = 2,50,000

Question:27
Debtors in the beginning of the year were ​ 30,000, Sales on credit during the year were 75,000, Cash received from the
Debtors during the year was 35,000, Returns Inward regardingcreditsales
were 5,000 and Bills Receivable drawn during the year were 25,000. Find the balance of Debtors at th end of the year,
assuming that there were Bad Debts during the year of 2,000.
Solution:
Debtors Account
Dr. Cr.
Amount Amount
Particulars Particulars
Balance b/d 30,000 Cash A/c 35,000
 Sales A/c 75,000 Sales Return A/c 5,000
Bill Receivable A/c 25,000
Bad-Debts A/c 2,000
Balance c/d 38,000

1,05,000 1,05,000

Question:28
Creditors on 1st April, 2018 were 15,000, Purchases on credit were 30,000, Cash paid to Creditors during 2018-19 was
20,000, Returns Outward regardingcreditpurchases
were 1,000 and Bills Payable accepted during the year were 10,000. Find the balance of Creditors on 31st March, 2019.
Solution:
Creditors Account
Dr. Cr.
Amount Amount
Particulars Particulars

Cash A/c 20,000 Balance b/d 15,000

Purchases Return A/c 1,000 Purchases A/c 30,000
Bills Payable A/c 10,000
Balance c/d 14,000

45,000 45,000

Question:29
Following information is given of an accounting year:
Opening Creditors 15,000; Cash paid to creditors 15,000; Returns Outward 1,000 and Closing creditors 12,000.
Calculate Credit Purchases during the year.
Solution:
Creditors Account
Dr. Cr.
Amount Amount
Particulars Particulars
Cash A/c 15,000 Balance b/d 15,000
Purchases Return A/c 1,000 Purchases A/c 13,000
Balance c/d 12,000

28,000 28,000

Question:30
From the following information supplied by Rohit, who keeps his books on Single Entry System, you are required to calculate
Total Purchases:

Opening balance of Bills Payable 5,000

Opening balance of Creditors 6,000
Closing balance of Bills Payable 7,000
Closing balance of Creditors 4,000
Cash paid to Creditors during the year 30,200
Bills Payable discharged during the year 8,900
Returns Outward 1,200
Cash Purchases 25,800
Solution:
Creditors Account
 Dr. Cr.

Amount Amount
Particulars Particulars
Cash A/c 30,200 Balance b/d 6,000
Purchases Return A/c 1,200 Purchases A/c 40,300
Bills Payable A/c 10,900
Balance c/d 4,000

46,300 46,300

Total Purchases = Cash Purchases + Credit Purchases

Total Purchases = 25,800 + 40,300 = 66,100

Question:31
Cash sales of a business in a year were ​ 85,000, the Cost of Goods Sold includingdirectexpenses
was 97,000 and Gross Profit as shown by the Trading Account for the year was 1,29,000. Calculate Credit Sales during the
year.
Solution:
Gross Profit = Net Sales – Cost of Goods Sold
1,29,000 = Net Sales – 97,000
Net Sales = 2,26,000
Credit Sales = Total Net Sales – Cash Sales
Credit Sales = 2,26,000 – 85,000 = 1,41,000

Question:32
From the following information, calculate Total Sales made during the period:

Debtors as on 1st April, 2018 20,400

Cash received from debtors during the year
60,800
asperCashBook
Returns Inward 5,400
Bad Debts 2,400
Debtors as on 31st March, 2019 27,600
Cash Sales asperCashBook 56,800
Solution:
Debtors Account
Dr. Cr.
Amount Amount
Particulars Particulars
Balance b/d 20,400 Cash A/c 60,800
Sales A/c 75,800 Sales Return A/c 5,400
Bad-Debts A/c 2,400
Balance c/d 27,600

96,200 96,200

Total Sales = Cash Sales + Credit Sales

Total Sales = 56,800 + 75,800 = 1,32,600

Question:33
Calculate Total Sales from the following information:

Bills Receivables as on 1st April, 2018 7,800

Debtors as on 1st April, 2018 30,800
Cash received on maturity of Bills Receivable during the
20,900
year
Cash received from Debtors 70,000
Bad Debts written off 4,800
Returns Inward 8,700
Bills Receivable dishonoured 1,800
Bills Receivable on 31st March, 2019 6,000
Debtors as on 31st March, 2019 25,500
Cash Sales during the year 15,900
Solution:
Debtors Account
Dr. Cr.
Amount Amount
Particulars Particulars

Balance b/d 30,800 Cash A/c 70,000

Bill Receivable A/c 1,800 Sales Return A/c 8,700
Sales A/c 97,300 Bad-Debts A/c 4,800
Bill Receivable A/c 20,900
Balance c/d 25,500

1,09,000 1,09,000

Total Sales = Cash Sales + Credit Sales

Total Sales = 15,900 + 97,300 = 1,13,200

Question:34
From the following information, ascertain the opening balance of Sundry Debtors and the closing balance of Sundry Creditors:

Sundry Creditors as on 31st March, 2018 20,600

Sundry Debtors as on 31st March, 2019 37,400
Stock as on 31st March, 2018 26,000
Stock as on 31st March, 2019 24,000
During the year ended 31st March, 2019:
Purchases 1,10,000
Discount allowed by creditors 800
Discount allowed to customers 1,100
Cash paid to sundry creditors 95,000
Bills Payable issued by them 14,000
Bills Receivable received from customers 16,500
Cash received from customers 1,30,000
Bills receivable dishonoured 1,900
Solution:
Debtors Account
Dr. Cr.
Amount Amount
Particulars Particulars

Balance b/d 43,100 Cash A/c 1,30,000

Bill Receivable A/c 1,900 Discount Allowed A/c 1,100
Sales A/c 1,40,000 Bill Receivable A/c 16,500
Balance c/d 37,400

1,85,000 1,85,000
Cost of Goods Sold = Opening Stock + Purchases – Closing Stock

Cost of Goods Sold = 26,000 + 1,10,000 – 24,000 = 1,12,000

30
70
Gross Profit = × 1, 12, 000 = Rs 48, 000

Sales = Cost of Goods Sold + Gross Profit

Sales = 1,12,000 + 48,000 = 1,60,000

Credit Sales = 1,60,000 – 20,000 = 1,40,000

Creditors Account
Dr. Cr.
Amount Amount
Particulars Particulars

Cash A/c 95,000 Balance b/d 20,600

Discount Received A/c 800 Purchases A/c 1,10,000
Bills Payable A/c 14,000
Balance c/d 20,800

1,30,600 1,30,600

Question:35
Roshan, whose accounts are maintained by Single Entry System, acquired a retail business on 1st April, 2018. He had
40,000 of his own and he borrowed 20,000 from his wife. He paid 15,000 for Goodwill, 5,000 for Furniture and 35,000 for
Stock.
Total cash received by him during the financial year from the Debtors was 2,30,000. His payments were:

Purchases 1,56,000
Salary and Wages 21,400
Trade Expenses 7,200
Rent:
For business premises 5,920
For private house 2,960
Payments made for domestic purposes and
26,400
drawings

At the end of the year, the Stock was 37,500. He owed 13,500 to Creditors for goods and his customers owed to him 15,000.
Provide 5% for Depreciation on Furniture, Interest at 5% on wife's Loan and 1,000 for Doubtful Debts.
Prepare the Cash Account, the Profit and Loss Account for the year ended 31st March, 2019 and the Balance Sheet at the
close of the year.
Solution:
Trading Account for the year ended 31st March, 2019
Dr. Cr.
Amount Amount
Particulars Particulars
Opening Stock 35,000 Sales 2,45,000
Purchases: Cash 1,56,000 Closing Stock 37,500
Credit 13,500 1,69,500
Gross Profit c/d 78,000
2,82,500 2,82,500
 Profit and Loss Account
for the year ended March 31, 2019

Dr. Cr.
Amount Amount
Particulars Particulars

Salary and Wages 21,400 Gross Profit b/d 78,000

Trade Expenses 7,200
Rent for Business Premises 5,920
Provision for Doubtful Debts 1,000
Depreciation on Furniture 250
Interest on wife’s loan 1,000
Net Profit t/d to Capital 41,230
78,000 78,000

Balance Sheet
as on March 31, 2019
Amount Amount
Liabilities Assets
Creditors 13,500 Cash Balance 15,120
Wife’s Loan from Wife 20,000 Stock 37,500
Add: O/s Interest 1,000 21,000 Furniture 5,000
Capital 40,000 Less: Depreciation 250 4,750
Less: Drawings 29,360 Debtors 15,000
10,640 Less: Provision for Doubtful Debts 1,000 14,000
Add: Net Profit 41,230 51,870 Goodwill 15,000
86,370 86,370

Cash Account
Amount Amount
Liabilities Assets
Capital 40,000 Goodwill 15,000
Wife’s Loan 20,000 Furniture 5,000
Debtors 2,30,000 Stock 35,000
Purchases 1,56,000
Salary and Wages 21,400
Trade Expenses 7,200
Rent for Business Premises 5,920
Drawings2, 960 + 26, 400 29,360
Balance c/d 15,120
2,90,000 2,90,000

Working Notes

Dr. Creditors Account Cr.

Particulars Amount Amount
Particulars

Balance 13,500 Purchases-Credit B/F 13,500

c/d
13,500 13,500

Dr. Debtors Account Cr.

Amount Amount
Particulars Particulars

Sales A/c B/F 2,45,000 Cash 2,30,000

Balance c/d 15,000
 2,45,000 2,45,000

Question:36
Vijay commenced business as food grains merchant on 1st April, 2018 with a capital of 4,00,000. On the same day, he
purchased furniture for 80,000. From the following particulars obtained from his books which do not conform to Double Entry
principles, you are required to prepare the Trading and Profit and Loss Account for the year ended 31st March, 2019 and the
Balance Sheet as on that date:

Sales includingCashSales 2, 00, 000 5,00,000

Purchases (including Cash Purchases 1,20,000 4,00,000
Vijay's Drawings inCash 40,000
Salaries to Staff 48,000
Bad Debts written off 4,000
Trade Expenses paid 16,000

Vijay used goods of 12,000 for personal purposes during the year. On 31st March, 2019, his Debtors amounted to 1,40,000
and Creditors 80,000. Stock-in-Trade on that date was 1,60,000.
Solution:
Trading Account
for the year ended March 31, 2019
Dr. Cr.
Amount Amount
Particulars Particulars
Purchases 4,00,000 Sales 5,00,000
Less: Drawings 12,000 3,88,000 Closing Stock 1,60,000
Gross Profit 2,72,000
6,60,000 6,60,000

Profit & Loss Account

for the year ended March 31, 2019
Dr. Cr.
Amount Amount
Particulars Particulars
Salary 48,000 Gross Profit 2,72,000
Trade Expenses 16,000
Bad Debts 4,000
Net Profit 2,04,000
2,72,000 2,72,000

Balance Sheet
as on March 31, 2019
Dr. Cr.
Amount Amount
Liabilities Assets
Capital 4,00,000 Cash in Hand 2,56,000
Less: 52,000 Debtors 1,40,000
Drawings
Add: Net Profit 2,04,000 5,52,000 Less: Bad Debts 4,000 1,36,000
Creditors 80,000 Furniture 80,000
Closing Stock 1,60,000
6,32,000 6,32,000

Cash Account
Dr. Cr.
Amount Amount
Particulars Particulars
 Capital A/c 4,00,000 Creditors A/c 2,00,000
Debtors A/c 1,60,000 Drawings A/c 40,000
Sales A/c 2,00,000 Furniture A/c 80,000
Purchases A/c 1,20,000
Salaries A/c 48,000
Trade Expenses A/c 16,000
Balance c/d 2,56,000
7,60,000 7,60,000

Debtors Account
Dr. Cr.
Amount Amount
Particulars Particulars

Sales A/c 3,00,000 Cash A/c 1,60,000

Balance c/d 1,40,000

3,00,000 3,00,000

Creditors Account
Dr. Cr.
Amount Amount
Particulars Particulars

Cash A/c 2,00,000 Purchases A/c 2,80,000

Balance c/d 80,000

2,80,000 2,80,000

Question:37
Following information is obtained from the books of Vinay, who maintained his books of account under Single Entry System:

1. Receipts for the year ended 31st March, 2019:

From Debtors 88,125
Cash Sales 20,625
Paid by Vinay 12,500
1,21,250
2. Payments during the year:
New plant bought 3,125
Drawings 7,500
Salaries 5,625
Wages 33,625
Interest paid 375
Rent paid 6,625
Light and power 2,375
Sundry Expenses 10,625
Sundry Creditors 38,125
1,08,000

Vinay banks all receipts and makes payments by means of cheque.

3.
As at 31st March, 2018 As at 31st March, 2019
Assets and Liabilities

Sundry Creditors 12,625 12,000

Sundry Debtors 18,750 30,625
Bank 3,125 ?
Stock 31,250 15,625
 Plant 37,500 36,575

From the above information, prepare Trading and Profit and Loss Account for the year ended 31st March, 2019 and Balance
Sheet as on that date.
Solution:
Trading Account
for the year ended March 31, 2019
Dr. Cr.
Amount Amount
Particulars Particulars
Opening Stock 31,250 Sales 1, 00, 000 + 20, 625 1,20,625
Purchases 37,500 Closing Stock 15,625
Light & Power 2,375
Wages 33,625
Gross Profit 31,500
1,36,250 1,36,250

Profit & Loss Account

for the year ended March 31, 2019
Dr. Cr.
Amount Amount
Particulars Particulars
Depreciation on Plant 4,050 Gross Profit 31,500
Interest 375
Rent 6,625
Salary 5,625
Sundry Expenses 10,625
Net Profit 4,200
31,500 31,500

Balance Sheet
as on March 31, 2019
Dr. Cr.
Amount Amount
Liabilities Assets

Capital 78,000 Bank 16,375

Less: Drawings 7,500 Closing Stock 15,625
Add: Additional Capital 12,500 Debtors 30,625
Add: Net Profit 4,200 87,200 Plant 36,575
Creditors 12,000

99,200 99,200

Balance Sheet
as on April 01, 2018
Dr. Cr.
Amount Amount
Liabilities Assets
Creditors 12,625 Bank 37,500
Capital (bal. fig.) 78,000 Closing Stock 18,750
Debtors 3,125
Plant 31,250
90,625 90,625

Bank Account
Dr. Cr.
 Amount Amount
Particulars Particulars

Balance b/d 3,125 Creditors A/c 38,125

Capital A/c 12,500 Drawings A/c 7,500
Debtors A/c 88,125 Interest A/c 375
Sales A/c 20,625 Light & Power A/c 2,375
Plant A/c 3,125
Rent A/c 6,625
Salaries A/c 5,625
Sundry Expenses A/c 10,625
Wages A/c 33,625
Balance c/d 16,375
1,24,375 1,24,375

Debtors Account
Dr. Cr.
Amount Amount
Particulars Particulars
Balance b/d 18,750 Cash A/c 88,125
Sales A/c (bal.fig.) 1,00,000 Balance c/d 30,625

1,18,750 1,18,750

Creditors Account
Dr. Cr.
Amount Amount
Particulars Particulars

Cash A/c 38,125 Balance b/d 12,625

Balance c/d 12,000 Purchases A/c (bal.fig.) 37,500

50,125 50,125

Question:38
Surya does not keep a systematic record of his transactions. He is able to give you the following information regarding his
assets and liabilities:
31st March 2018 31st March, 2019

Creditors for goods 21,000 19,000

Creditors for expenses 1,500 1,800
Bills Payable 8,700 11,500
Sundry Debtors 35,000 34,000
Stock Atcost 28,000 25,000
Furniture and Fittings 10,000 12,000
Cash 5,100

Following additional information is also available for the year ended 31st March, 2019:

Bills Payable Issued 20,800

Cash Sales 15,000
Payment to Sundry Creditors 31,000
Expenses paid 6,600
Drawings 8,000

Bad Debts during the year were 900. As regards sale, Surya tells you that he always sells goods at Cost plus 25%. Furniture
and Fittings are to be depreciated at 10% of the value in the beginning of the year.
Prepare Surya's Trading and Profit and Loss Account for the year ended 31st March, 2019 and his Balance Sheet on that date.
Solution:
Trading Account
for the year ended 31st March, 2019
Dr. Cr.
Amount Amount
Particulars Particulars
Opening Stock 28,000 Sales: Cash 15,000
Purchases 49,800 Credit 51,000 66,000
Gross Profit c/d 13,200 Closing Stock 25,000
91,000 91,000

Profit and Loss Account

for the year ended March 31, 2019
Dr. Cr.
Amount Amount
Particulars Particulars
Bad Debts 900 Gross Profit b/d 13,200
Expenses 6,600
Add: Closing Creditors for Expenses 1,800
8,400
Less: Opening Creditors for Expenses 1,500 6,900
Depreciation on Furniture and Fittings 1,000
Net Profit t/d to Capital 4,400
13,200 13,200

Balance Sheet
as on March 31, 2019
Amount Amount
Liabilities Assets

Creditors for Goods 19,000 Cash Balance 4,600

Creditors for Expenses 1,800 Stock 25,000
Bills Payable 11,500 Debtors 34,000
Capital 46,900 Furniture and Fittings 12,000
Less: Drawings 8,000
38,900
Add: Net Profit 4,400 43,300

75,600 75,600

Working Notes
Balance Sheet
as on March 31, 2018
Amount Amount
Liabilities Assets

Creditors for Goods 21,000 Cash Balance 5,100

Creditors for Expenses 1,500 Stock 28,000
Bills Payable 8,700 Debtors 35,000
Capital BalancingFigure 46,900 Furniture and Fittings 10,000
78,100 78,100

Cash Account
Amount Amount
Liabilities Assets

Balance b/d 5,100 Expenses 6,600

Sales 15,000 Sundry Creditors 31,000
Debtors 51,100 Furniture and Fittings 3,000
 Bills Payable 18,000
Drawings 8,000
Balance c/d 4,600
71,200 71,200

Dr. Creditors for Goods Account Cr.

Amount Amount
Particulars Particulars

Bills 20,800 Balance b/d 21,000

Payable
Cash 31,000 Purchases-Credit B/F 49,800
Balance c/d 19,000
70,800 70,800

Dr. Debtors Account Cr.

Amount Amount
Particulars Particulars

Balance b/d 35,000 Bad Debts 900

Sales- 51,000 Cash BalancingFigure 51,100
Credit
Balance c/d 34,000
86,000 86,000

Dr. Bills Payable Account Cr.

Amount Amount
Particulars Particulars

Cash BalancingFigure 18,000 Balance b/d 8,700

Balance b/d 11,500 Creditors for goods 20,800
29,500 29,500

Dr. Furniture and Fittings Account Cr.

Amount Amount
Particulars Particulars

Balance b/d 10,000 Depreciation 1,000

Cash-Purchases B/F 3,000 Balance c/d 12,000
13,000 13,000

Computation of Cost of Goods Sold and Credit Sales

COGS = Opening. Stock + Purchases – closing. Stock = 28,000 + 49,800 – 25,000 = 52,800

Gross Profit = 52,800 × 25/100= 13,200

Total Sales = COGS + Gross Profit = 52,800 + 13,200 = 66,000 Credit Sales = Total Sales – Cash Sales

= 66,000 – 15,000 = 51,000

Note: It has been assumed that a Drawings in cash of Amount 8,000 has been made by Surya during the year.