Page 27 - Chapter-11.pmd

Accounts from Incomplete Records 463

(iv) Statement of Affairs as on December 31, 2014

Liabilities Amount Assets Amount
Rs. Rs.
Creditors 24,000 Debtors 45,000
Cash 4,500
Stock 25,000
Capital in the beginning 81,500 Furniture and Fixtures 15,000
(Balancing figure)
Motor Van 16,000
1,05,500 1,05,500

(v) Calculation of Closing Stock

Rs.
Total sales 89,800
Less Sales return (3,000)
Net sales 86,800
Total purchases 69,000
Less Purchases returens (2,000)
(67,000)
Rate of gross profit on cost 40%
Suppose cost of goods sold is 100
Then, Gross profit equals to 40
Sales equals to 140
Hence, Cost of goods sold will be

100
,
Sale = Rs. 86,800 = × 86 800 = 62 000
,
140
The amount of closing stock will be calculated as :
Net Purchases 67,000
Add Closing stock 25,000
Cost of goods available for sale 92,000
Less Cost of goods sold (62,000)
Closing stock 30,000

Key Terms Introduced in the Chapter
• Incomplete records • Statement of Affairs

Summary with Reference to Learning Objectives
1. Incomplete records : Incomplete records refer to, lack of accounting records
according to the double entry system. Degree of incompleteness may vary from
highly disorganised records to organised, but still not complete.
2. Difference between statement of affairs and balance sheet : A statement of affairs
is a statement showing various assets and liabilities of a firm on date, with

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