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ABDUL RAHIM SURIYA
FCA, FCMA
INCOMPLETE RECORDS
Incomplete records problem occur when
i)
ii)
Hypothecial examples:
1- The opening Balance Sheet
Example: A business has following assets & liabilities work out Proprietors Capital
Fixed Assets
Bank Balance
Rent Payable
3,000,
2,500,
10,000
Collection
25,000
+ closing Debtors
14,000
- opening Debtors
(10,000)
29,000
Solution: II
10,000
29,000
Cash received
25,000
Closing balance
14,000
39,000
39,000
xxx
xxx
(x x x)
xxx
4- Trading Account
Any missing of purchases or cost of sale etc can be derived from the knowledge of Trading
A/c. Format is follows:
COGS
Opening Stock
+ Purchases
- Closing Stock
PURCHASES
]
] or
]
= Purchases
Example:
Stocks as at December 31, 1999
Rs 8400
Rs 9350
Rs 80000
Profit =
33 1/3% of cost
MATHMATICAL APPROACH
80,000
If Profit is
Then Sales will be
= 33 1/3% of cost
= 133 1/3% of
Since Sales
Cost will be
= 80,000
= 80000
133 1/3 =
Cost
Opening Stock
8400
Purchases
?
Less: Closing Stock (9350)
60000
Cost of Goods Sold
Gross Profit
__________
?
=========
106420
Sales
154000
40% on cost
Fire in the shop on 30/9/2000, which destroyed most of the stocks except stocks of Rs 350.
Find out how stocks lost in the fire ?
Solution:
MATHMATICAL APPROACH
TRADING A/C
Opening Inventory
Purchases
Less: Closing Inventory
(350)
1.4X
113415 X
110000
154000
Cost of Goods Sold + Lost
=
154000 = 110000 = COGS Less: COGS
1.4
3415
Note:
=
If the stock was Insured then the Company will lodge claim and will prepare following entry
Insurance (Company) Receivable
DR
3415
Stocks
CR
3415
3500
95000
- 2000
96500
DEBTORS A/C
Opening
Sales (balancing figure)
2000
96500
Collection
Closing
95000
3500
98500
2)
3)
Cash Sales
98500
2250
7- ACCRUALS
Example: January 1, 2000 Accrued telephone expenses
850
6720
1140
6720
(850)
1140
7010