NCERT Solutions for Class 11 Accountancy Chapter 11 - Accounts From Incomplete Records

NCERT Solutions are said to be an extremely helpful study material while preparing for the CBSE Class 11 Accountancy examinations. This study material owns a deep knowledge and the Solutions collected by the subject matter wizards are no distinct.

NCERT Solution For Class 11 Commerce Accountancy Chapter 11 – Accounts From Incomplete Records furnishes us with an all-inclusive data to all the concepts. As the students would have to learn the basic fundamentals about the subject of accountancy in Class 11, this curriculum for Class 11 is a comprehensive study material; which explains the concepts in a great way.

Download PDF of NCERT Solutions For Class 11 Accountancy Chapter 11 – Accounts From Incomplete Records

 

ncert sol class 11 accountancy chapter 11
ncert sol class 11 accountancy chapter 11
ncert sol class 11 accountancy chapter 11
ncert sol class 11 accountancy chapter 11
ncert sol class 11 accountancy chapter 11
ncert sol class 11 accountancy chapter 11
ncert sol class 11 accountancy chapter 11
ncert sol class 11 accountancy chapter 11
ncert sol class 11 accountancy chapter 11
ncert sol class 11 accountancy chapter 11
ncert sol class 11 accountancy chapter 11
ncert sol class 11 accountancy chapter 11
ncert sol class 11 accountancy chapter 11
ncert sol class 11 accountancy chapter 11
ncert sol class 11 accountancy chapter 11
ncert sol class 11 accountancy chapter 11
ncert sol class 11 accountancy chapter 11
ncert sol class 11 accountancy chapter 11
ncert sol class 11 accountancy chapter 11
ncert sol class 11 accountancy chapter 11
ncert sol class 11 accountancy chapter 11
ncert sol class 11 accountancy chapter 11
ncert sol class 11 accountancy chapter 11
ncert sol class 11 accountancy chapter 11
ncert sol class 11 accountancy chapter 11
ncert sol class 11 accountancy chapter 11
ncert sol class 11 accountancy chapter 11
ncert sol class 11 accountancy chapter 11
ncert sol class 11 accountancy chapter 11
ncert sol class 11 accountancy chapter 11
ncert sol class 11 accountancy chapter 11
ncert sol class 11 accountancy chapter 11
ncert sol class 11 accountancy chapter 11
ncert sol class 11 accountancy chapter 11
ncert sol class 11 accountancy chapter 11
ncert sol class 11 accountancy chapter 11
ncert sol class 11 accountancy chapter 11
ncert sol class 11 accountancy chapter 11
ncert sol class 11 accountancy chapter 11

 

Access NCERT Solutions For Class 11 Accountancy Chapter 11 – Accounts From Incomplete Records

Short Questions for NCERT Accountancy Solutions Class 11 Chapter 11

1. State the meaning of incomplete records?

Accounting records prepared without following the double entry book keeping system strictly are called as incomplete records. In this type of recording mechanism some of the transactions are recorded either by making one entry or no entry. In this way it impacts assets, liabilities, revenue and expenses and hence are known as incomplete records

2. What are the possible reasons for keeping incomplete records?

Incomplete records are kept due to the following reasons:

  • Businesspersons lack a requisite accounting knowledge and are more inclined to follow this method.
  • Recording transactions using single entry system tends to be less time consuming and requires less maintenance
  • It is cost effective way of keeping records as it doesn’t require a specialist
  • It gives the owner flexibility to record those transactions which are more important for business

3. Distinguish between statement of affairs and balance sheet.

 
Basis of Difference Statement of Affairs Balance Sheet
Meaning It is a statement that shows the assets, liabilities and capital of a business entity on basis of single entry system of bookkeeping It is a statement showing assets, liabilities and capital of a business entity prepared on the basis of double entry system of bookkeeping
Reliability As the data is based on estimates, it is not reliable. It is more reliable as it based on a tested method of data entry
Accounting Method Incomplete records forms the basis of its preparation Prepared from double entry book keeping
Accuracy Very Less Accurate to a large extent

4. What practical difficulties are encountered by a trader due to incompleteness of accounting records?

Following difficulties are faced by trader due to incompleteness of accounting records:

1. It is not possible to determine accuracy of accounts and correctly prepare trial balance as the records are not as per the double entry system.

2. It is difficult to make tax authorities believe, the reliability of the income that is computed.

3. Determining and evaluating financial results of a business will not be possible

4. True profit or loss cannot be determined as all transactions are not recorded.

5. Profitability, liquidity and solvency of a business cannot be determined. Hence, investors will be doubtful about investment.

6. Encourages fraud as there is no arithmetical accuracy in the records.

Long Questions for NCERT Accountancy Solutions Class 11 Chapter 11

1. What is meant by a ‘statement of affairs’? How can the profit or loss of a trader be ascertained with the help of a statement of affairs?

It is a statement that shows assets and liabilities, that is prepared at the beginning and end of one accounting period. Assets and liabilities are shown in two sides similar to a balance sheet. However, the basic difference between statement of affairs and balance sheet is that, the former is prepared from incomplete records while the latter is prepared from ledger entries. Capital is said to be the difference between the totals of assets and liabilities.

Capital will be shown at the beginning and end of accounting period when a statement of affairs is prepared. Using this information, a statement of profit and loss is prepared to find out the profit or loss. Adjustments needs to be made for withdrawals by owner and for fresh capital introduced by owners during the period.

A business earns profit if the net results of calculation is positive and is said to make a loss if the results are negative. Thus, profit and loss of owners can be determined using this process.

2. Is it possible to prepare the profit and loss account and the balance sheet from the incomplete book of accounts kept by a trader’? Do you agree? Explain.

It is possible to prepare profit and loss account and balance sheet from incomplete book of accounts by a process known as conversion method. In this method, the incomplete records gets converted to double entry records. It is easy to convert some of the incomplete entries such as debtors, creditors, cash payments, cash sales and cash receipts as they are easily available. However, there will be some transactions for which details are not available. Still such details can be found using logic. Here are some transactions that are necessary for creating complete record.

1. Opening capital

2. Credit Purchases

3. Credit sales

4. Bills Payable accepted

5. Opening Capital

6. Payment to creditors

In some cases payment received from debtors and amount paid to creditors, for such cases it is essential to prepare debtor or creditor account to determine the values first. The final accounts can be prepared after these accounts are prepared.

3. Explain how the following may be ascertained from incomplete records:

(a) Opening capital and closing capital

(b) Credit sales and credit purchases

(c) Payments to creditors and collection from debtors

(d) Closing balance of cash.

1. Opening capital and closing capital: By preparing the opening statement of affairs at the start of the accounting period the opening capital value can be determined, while by preparing a closing statement of affairs, the value of closing capital can be determined.

 

Statement of Affairs as on….

 

Liabilities Amount

Assets Amount

Bills Payable Land and Building
Creditors Plant and Machinery
Outstanding expenses Furniture
Opening Capital (Balancing Figure)* Stock
Debtors
Bank

Cash

Prepaid Expenses
Opening Capital (Balancing Figure)*

 

* When total of liabilities are more than total of assets, capital is shown in assets side and represents debit balance.

When the total of assets’ balance exceeds total of liabilities’ balance, capital is shown in the liabilities side.

2. Credit Sales and Credit Purchases: Credit sales are found to be missing from incomplete records. For evaluating it, there is need of preparing total debtors account. The total sales return, if there is any, must be deducted from the total debtors account. The credit sales is given by the balancing figure.

Similarly, to evaluate credit purchases, preparing total creditor account is necessary. Total purchase returns should be deducted from total creditors account. The balancing figure represents the credit purchase.

Total Debtors Account
Dr. Cr.
Particulars J.F. Amount

Particulars J.F. Amount

Balance b/d Cash (Cash Received)
Bills Receivable Bank (Cheque Received)
(Bill Dishonoured) Discount Allowed
Bank (Cheque Dishonoured) Bad Debts
Credit Sales (Balancing Figure) Sales Returns
Bills Receivable

(Bill Received)

Balance c/d

           

Total Creditors Account
Dr. Cr.
Particulars J.F. Amount ₹ Particulars J.F. Amount

Cash Paid Balance b/d
Bank (Cheque Issued)  – Bank

(Cheque Dishonoured)

Bills Payable (Bills Accepted)  – Bills Payable (Bills Dishonoured)
Discount Received  – Credit Purchases
Purchases Returns  – (Balancing Figure )
Balance c/d  –

 

3. Payment to creditors and collection from debtors: For determining payment to creditors preparing total creditors account is required, by deducting total purchase returns, the balancing figure provides the payment to creditors while for determining collection from debtors, preparing total debtors account is necessary, by deducting total sales returns, the balancing figure provides the collection from debtors.

4. Closing balance of cash: To evaluate closing balance of cash, preparing cash book summary is necessary. Cash book summary includes all receipts from debit and all payments done during that period in credit part, the balancing figure provides the balance of cash. Total creditor or total debtor accounts are required if amount paid to creditors or received from debtors are not present.

Numerical Questions for NCERT Accountancy Solutions Class 11 Chapter 11

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
Drawings made during the period 3,75,000
Additional Capital introduced 50,000

The solution is as follows:

Statement of Profit and Loss
Particulars Amount

Capital at the end of the year 5,00,000
Add: Drawings made during the year 3,75,000
Less: Capital in the beginning of the year (7,50,000)
Less: Additional capital introduced (50,000)
Profit during the year 75,000

2. Manveer started his business on April 01, 2016 with a capital of ₹ 4, 50,000. On March 31, 2017 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 March 31, 2017.

The solution is as follows:

Books of Manveer

Statement of Affairs as on March 31, 2017

Liabilities Amount ₹ Assets Amount ₹
Loan from Susheel 45,000 Cash 99,000
Bills Receivable 75,000
Plant 48,000
Closing Capital

(Balancing Figure)

4,07,000 Land and Building 1,80,000
Furniture 50,000
4,52,000 4,52,000
Statement of Profit and Loss as on March 31, 2017
Particulars
Capital on March 31, 2017 4,07,000
Add: Drawings made during the year (₹ 8,000 × 12) 96,000
Less: Capital on April 01, 2016 (4,50,000)
Profit during the year 2017 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
Business premises 8,600
Machinery 2,100
Sundry creditors 33,400
Drawings made during the year 26,400

 

The solution is as follows:

Statement of Affairs
Liabilities Amount ₹ Assets Amount ₹
Sundry Creditors 33,400 Stock 59,500
Capital (Balancing figure) 62,700 Sundry Debtors 25,900
Business Premises 8,600
Machinery 2,100
96,100 96,100
Statement of Profit and Loss
Particulars Amount

Capital at the end of the year 62,700
Add: Drawings made during the year 26,400
Less: Capital of the beginning of the year (70,000)
Less: Additional capital introduced during the year (17,500)
Profit 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
Drawings made during the year 60,000
Fresh capital introduce during the year 1,00,000
Profit of the current year 80,000

 

The solution is as follows:

Capital in the beginning = Capital at the end + Drawings – (Fresh Capital Introduced + Profit)
= 4,00,000 + 60,000 – (1,00,000 + 80,000)
= ₹ 2,80,000

5. Following information is given below: calculate the closing capital

  April.01, 2016 March.31, 2017
     
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

Calculation of profit or loss and ascertainment of statement of affairs at the end of the year (Opening Balance is given)

 

The solution is as follows:

Statement of Affairs as on April 01, 2016
Liabilities Amount ₹ Assets Amount

Creditors 5,000 Bills Receivable 30,000
Bills Payable 10,000 Stock 5,000
Capital (Balancing figure) 22,000 Cash 2000
37,000 37,000
Statement of Affairs as on March 31, 2017
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

Capital on March 31, 2017 (Closing) is ₹ 20,000

Statement of Profit and Loss
Particulars Amount

Capital on March 31, 2017 20,000
Less: Capital on April 01, 2016 (22,000)
Loss during the year 2017 (2,000)

6. Mrs. Anu started firm with a capital of ₹ 4, 00,000 on 1st October 2016. 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 March. 31, 2017, 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.

The solution is as follows:

Books of Mrs. Anu

Statement of Affairs as on March 31, 2017

Liabilities Amount ₹ Assets Amount

Creditors 3,00,000 Cash 30,000
10% Loan from Friends 1,00,000 Stock 4,70,000
Capital (Balancing figure) 4,50,000 Debtors 3,50,000
8,50,000 8,50,000
Statement of Profit and Loss as on March 31, 2017
Particulars Amount

Capital on March 31, 2017 4,50,000
Add: Drawings during the year (8,000 × 6 months) 48,000
Less: Capital on October 01, 2016 (4,00,000)
Less: Additional capital introduced (75,000)
Mrs. Anu earned profit during the year 2017 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
Stock in trade 2,00,000
Further capital introduced 3,20,000
Drawings made during the period 80,000

Ascertainment of statement of affairs at the beginning and at the end of the year and calculation of profit or loss.

 

The solution is as follows:

Books of Mr. Arnav

Statement of Affairs at the end of year

Liabilities Amount

Assets Amount

Creditors 6,00,000 Bills Receivable 60,000
Capital (Balance figure) 16,40,000 Cash in Hand 80,000
Furniture 9,00,000
Building 10,00,000
Stock in Trade 2,00,000
22,40,000 22,40,000
Statement of Profit and Loss
Particulars Amount

Capital at the end of the year 16,40,000
Add: Drawings during the year 80,000
Less: Capital at the beginning of the year (15,00,000)
Less: Further capital introduced (3,20,000)
Loss during the year 1,00,000

8. Mr. Akshat keeps his books on incomplete records following information is given below:

  April 01, 2016 March 31, 2017
     
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
Business premises   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.

The solution is as follows:

Books of Mr. Akshat

Statement of Affairs as on April 01, 2016

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
Business Premises 75,000
Furniture 9,000
2,42,500 2,42,500
Statement of Affairs as on March 31, 2017
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
Business Premises 1,35,000
Furniture 7,500
3,19,000 3,19,000
Statement of Profit and Loss as on March 31, 2017
Particulars Amount

Capital on March 31, 2017 1,74,000
Add: Drawings made during the year 45,000
Less: Capital on April 01, 2016 (1,32,500)
Less: Additional capital introduced (25,000)
Profit earned by Mr. Akshat during the year 2016–2017 61,500

9. Gopal does not keep proper books of account. Following information is given below:

  April. 01, 2016 March. 31, 2017
     
Cash in hand   18,000   12,000
Cash at bank   1,500   2,000
Stock in trade   80,000   90,000
Sundry debtors   36,000   60,000
Sundry creditors   60,000   40,000
Loan   10,000   8,000
Office equipment   25,000   30,000
Land and Building   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

The solution is as follows:

Books of Gopal

Statement of Affairs as on April 01, 2016

Liabilities Amount

Assets Amount

Sundry Creditors 60,000 Cash in hand 18,000
Loan 10,000 Cash at bank 1,500
Stock in trade 80,000
Sundry Debtors 36,000
Office Equipments 25,000
Capital (Balancing figure) 1,30,500 Land and Buildings 30,000
Furniture 10,000
2,00,500 2,00,500
Statement of Affairs as on March 31, 2017
Liabilities Amount

Assets Amount

Sundry Creditors 40,000 Cash in Hand 12,000
Loan 8,000 Cash at Bank 2,000
Stock in Trade 90,000
Sundry Debtors 60,000
Office Equipments 30,000
Capital (Balancing figure) 1,76,000 Land and Buildings 20,000
Furniture 10,000
2,24,000 2,24,000
Statement of Profit and Loss as on March 31, 2017
Particulars Amount

Capital on March 31, 2017 1,76,000
Add: Drawing made during 2017 12,000
Less: Capital on April 01, 2016 (1,30,500)
Less: Additional capital introduced (20,000)
Profit during the year 37,500

The profit earned is ₹37,500.

10. Mr. Muneesh maintains his books of accounts from incomplete records. His books provide the information:

 

  April. 01, 2016 March. 31, 2017
     
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.

Statement of Affairs as on April 01, 2016
Liabilities Amount ₹ Assets Amount ₹
Creditors 14,000 Cash 1,200
Debtors 16,800
Stock 22,400
Furniture 7,500
Capital (Balancing figure) 33,900
47,900 47,900
Statement of Affairs as on March 31, 2017
Liabilities Amount ₹ Assets Amount ₹
Creditors 15,200 Cash 1,600
Bills Receivable 2,400
Debtors 27,200
Stock 24,400
Capital (Balancing figure) 56,400 Investment 8,000
Furniture 8,000
71,600 71,600
Statement of Profit and Loss as on March 31, 2017
Particulars Amount

Capital on March 31, 2017 56,400
Add: Drawing made during the year (₹ 300 × 12) 3,600
Less: Capital on April 01, 2016 (33,900)
Less: Additional Capital Introduced (16,320)
Profit earned during the year 2017 9,780

Working Note:

Additional Capital Introduced = 16,000 × 102
100
= 16,320

 

11. Mr. Girdhari Lal does not keep full double entry records. His balance as on April 01, 2016 is as.

 

Liabilities Amount

Assets Amount

Sundry creditors 35,000 Cash in hand 5,000
Bills payable 15,000 Cash at 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.

The solution is as follows:

 

Books of Mr. Girdhari Lal

Statement of Affairs as on April 31, 2016

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 and Loss
Particulars Amount

Capital at the end of the year 39,550
Add: Drawings (₹ 500 × 12 months) 6,000
Less: Capital at the beginning of the year 2016 (40,000)
Less: Additional capital introduced (1,500)
Profit earned during the year 2017 4,050

 

12. Mr. Ashok does not keep his books properly. Following information is available from his books.

 

  April. 01, 2016 March. 31, 2017
     
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 up to October 31, 2016 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 March 31, 2017.

The solution is as follows:

Books of Mr. Ashok

Statement of Affairs as on April 01, 2016

Liabilities Amount

Assets Amount

Sundry Creditors 45,000 Sundry 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
Statement of Affairs as on March 31, 2017
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 and Loss
Particulars Amount

Capital on March 31, 2017 (25,000)
Add: Drawings (₹ 1,500 × 7 months) + (4,500 × 5 months) 33,000
Less: Capital on April 01, 2016 (18,900)
Less: Additional capital introduced (sale of car) (50,000)
Loss during the year 2017 (60,900)

The loss during the year 2017 is ₹ 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, 2011 from the following information:

 

  April. 01, 2016 March. 31, 2017
     
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

 

The following adjustments were made:

(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.

The solution is as follows:

Books of Krishna Kulkarni

Statement of Affairs as on April 01, 2016

Liabilities Amount

Assets Amount

Creditors 10,000 Cash in Hand 10,000
Bills Payable 4,000 Debtors 20,000
Bills Receivable 20,000
Stock 40,000
Furniture 8,000
Investment 40,000
Capital (Balancing figure) 2,24,000 Cast at Bank 1,00,000
2,38,000 2,38,000
Statement of Affairs as on March 31, 2017
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
Car 80,000
Less: Depreciation 5% (4,000) 76,000
Stock 30,000
Furniture 48,000
Less: Depreciation 10% 4,800 43,200
Capital (Balancing figure) 3,35,200 Investment 50,000
Cast at Bank 90,000
4,29,200 4,29,200
Statement of Profit and Loss
Particulars Amount

Capital on March 31, 2017 3,35,200
Add: Drawings made during the year (₹ 5,000 × 12 months) 60,000
Less: Capital on April 01, 2016 (2,24,000)
Less: Fresh capital introduced during the year (30,000)
Profit earned during the year 2017 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 March 31, 2017

 

  April. 31, 2016 March. 31, 2017
     
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.

The solution is as follows:

Statement of Affairs as on April 31, 2016
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
Furniture 40,000
Bills Receivable 8,000
Machinery 50,000
Capital (Balancing figure) 1,82,000 Investment 30,000
2,44,000 2,44,000
Statement of Affairs as on March. 31, 2017
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
Less: Bad-debt 2,000
1,38,000
Less: 5% Provision (6,900) 1,31,100
 Furniture 60,000
Capital (Balancing figure) 4,33,400 Less: Depreciation (6,000) 54,000
Bills Receivable 28,000
Machinery 1,00,000
Less: Depreciation (10,000) 90,000
Investment 80,000
Prepaid Insurance 700
4,87,800 4,87,800
Statement of Profit and Loss
Particulars Amount

Capital on March 31, 2017 4,33,400
Add: Drawings made during the year (₹ 10,000 × 12) 1,20,000
Less: Capital on April 31, 2016 (1,82,000)
Less: Fresh capital introduced during the year (2,00,000)
Profit earned during the year 2017 1,71,400

Profit earned during year 2017 is ₹1, 71,400

15. From the following information calculate the amount to be paid to creditors:

 
Sundry creditors as on March 31, 2017 1,80,425
Discount received 26,000
Discount allowed 24,000
Return outwards 37,200
Return inward 32,200
Bills accepted 1,99,000
Bills endorsed to creditors 26,000
Creditors as on April 01, 2016 2,09,050
Total purchases 8,97,000
Cash purchases 1,40,000
The solution is as follows:
Creditors Account
Dr. Cr.
Particulars Amount

Particulars Amount

Discount Received 26,000 By Balance b/d 1,80,425
Return Outwards 37,200 Purchases – credit
Bills accepted 1,99,000 (8,97,000 – 1,40,000) 7,57,000
B/R (endorsed to creditors) 26,000
Balance c/d 2,09,050
Cash/Bank (Balancing figure) 4,40,175
9,37,425 9,37,425

Amount paid to Creditors is ₹ 4, 40,175.

16. Find out the credit purchases from the following:

 
Balance of creditors April 01, 2016 45,000
Balance of creditors March 31, 2017 36,000
Cash paid to creditors 1,80,000
Cheque issued to creditors 60,000
Cash purchases 75,000
Discount received from creditors 5,400
Discount allowed 5,000
Bills payable given to creditors 12,750
Return outwards 7,500
Bills payable dishonoured 3,000
Bills receivable endorsed to creditors 4,500
Bills receivable endorsed to creditors dishonoured 1,800
Return inwards 3,700
Creditors Account
Dr. Cr.
Particulars Amount

Particulars Amount

Cash 1,80,000 Balance b/d 45,000
Bank 60,000 B/P (dishonoured) 3,000
Discount Received 5,400 B/R (dishonoured) 1,800
B/P (accepted) 12,750
Return Outwards 7,500 Purchases – credit
B/R (endorsed to creditors) 4,500 (Balancing figure) 2,56,350
Balance c/d 36,000
3,06,150 3,06,150

Therefore the Credit Purchases are amounting to ₹ 2, 56,350

17. From the following information calculate total purchases.

 
Creditors April. 01, 2016 30,000
Creditors March. 31, 2017 20,000
Opening balance of Bills payable 25,000
Closing balance of Bills payable 35,000
Cash paid to creditors 1,51,000
Bills discharged 44,500
Cash purchases 1,29,000
Return outwards 6,000

 

Creditors Account
Dr. Cr.
Particulars Amount

Particulars Amount

Cash 1,51,000 Balance b/d 30,000
Return Outwards 6,000 Purchases – credit 2,01,500
Bills Payable (accepted) 54,500 (Balancing figure)
Balance c/d 20,000
2,31,500 2,31,500
Bills Payable Account
Dr. Cr.
Particulars Amount ₹ Particulars Amount ₹
Cash (Bills discharged) 44,500 Balance b/d 25,000
Creditors – (Bills Payable

accepted) (Balancing figure)

54,500
Balance c/d 35,000
79,500 79,500
Total Purchases = Cash Purchases + Credit Purchases (as per Creditors Account)
= 1,29,000 + 2,01,500
= ₹ 3,30,500

18. The following information is given

 
Opening creditors 60,000
Cash paid to creditors 30,000
Closing creditors 36,000
Returns Inward 13,000
Bill matured 27,000
Bill dishonoured 8,000
Purchases return 12,000
Discount allowed 5,000

 

Calculate credit purchases during the year

The solution is as follows:

Creditors Account
Dr. Cr.
Particulars Amount

Particulars Amount

Cash 30,000 Balance b/d 60,000
Purchases Return 12,000 B/P (dishonoured) 8,000
B/P (accepted) (see note) 27,000 By Purchases – credit 37,000
Balance c/d 36,000 (Balancing figure)
1,05,000 1,05,000

 

Note: The return inwards and discount allowed belong to the Debtors account. So, it is not considered in the creditors account.

19. From the following, calculate the amount of bills accepted during the year.

Bills payable as on April 01, 2016 1, 80,000

Bills payable as on March 31, 2017 2, 20,000

Bills payable dishonoured during the year 28,000

Bills payable honoured during the year 50,000

The solution is as follows:

 

Bills Payable Account
Dr. Cr.
Particulars Amount

Particulars Amount

Creditors (dishonoured) 28,000 Balance b/d 1,80,000
Cash/Bank 50,000 Creditors (acceptance) 1,18,000
Balance c/d 2,20,000 (Balancing figure)
2,98,000 2,98,000

20. Find out the amount of bills matured during the year on the basis of information given below;

 
Bills payable dishonoured 37,000
Closing balance of Bills payable 85,000
Opening balance of Bills payable 70,000
Bills payable accepted 90,000
Cheque dishonoured 23,000

The solution is as follows:

Bills Payable Account
Dr. Cr.
Particulars Amount

Particulars Amount

Creditors (Bill dishonoured) 37,000 Balance b/d 70,000
Cash/Bank (Balancing figure) 38,000 Creditors – acceptance 90,000
Balance c/d 85,000 (Balancing figure)
1,60,000 1,60,000

 

Therefore the Bill Payable matured during the year is ₹ 38,000.

21. Prepare the bills payable account from the following and find out missing figure if any:

 
Bills accepted 1,05,000
Discount received 17,000
Purchases returns 9,000
Return inwards 12,000
Cash paid to accounts payable 50,000
Bills receivable endorsed to creditor 45,000
Bills dishonoured 17,000
Bad debts 14,000
Balance of accounts payable (closing) 85,000
Credit purchases 2,15,000

 

The solution is as follows:

Bills Payable Account
Dr. Cr.
Particulars Amount

Particulars Amount

Creditors (Bills dishonoured) 17,000 Creditors (acceptance) 1,05,000
Cash/Bank (Balancing figure) 88,000
1,05,000 1,05,000
Account Payable Account
Dr. Cr.
Particulars Amount

Particulars Amount

Discount Received 17,000 Purchases – Credit 2,15,000
Purchases Return 9,000 B/P (dishonoured) 17,000
Cash 50,000
B/R (endorsed) 45,000 Balance b/d 79,000
B/P (acceptance) 1,05,000 (Balancing figure)
Balance c/d 85,000
3,11,000 3,11,000

Bills payable discharged is ₹ 88,000 and the opening balance of creditors is ₹ 79,000.

22. Calculate the amount of bills receivable during the year.

 
Opening balance of bills receivable 75,000
Bill dishonoured 25,000
Bills collected (honoured) 1,30,000
Bills receivable endorsed to creditors 15,000
Closing balance of bills receivable 65,000

The solution is as follows:

Bills Receivable Account
Dr. Cr.
Particulars Amount

Particulars Amount

Balance b/d 75,000 Debtors (B/R dishonoured) 25,000
Cash/Bank (honoured) 1,30,000
Creditors (endorsed) 15,000
Debtors (B/R received) 1,60,000 Balance c/d 65,000
(Balancing figure)
2,35,000 2,35,000

 

Therefore, the Bills receivable received from Debtors ₹ 1, 60,000.

23. Calculate the amount of bills receivable dishonoured from the following information.

 
Opening balance of bills receivable 1,20,000
Bills collected (honoured) 1,85,000
Bills receivable endorsed 22,800
Closing balance of bills receivable 50,700
Bills receivable received 1,50,000

The solution is as follows:

Bills Receivable Account
Dr. Cr.
Particulars Amount

Particulars Amount

Balance b/d 1,20,000 Cash/Bank (honoured) 1,85,000
Creditors (endorsed) 22,800
Balance c/d 50,700
Debtors (B/R received) 1,50,000 Debtors (dishonoured) 11,500
(Balancing figure) (Balancing figure)
2,70,000 2,70,000

 

So the Bills Receivable dishonoured is ₹ 11,500.

24. From the details given below, find out the credit sales and total sales.

 
Opening debtors 45,000
Closing debtors 56,000
Discount allowed 2,500
Sales returns 8,500
Irrecoverable amount 4,000
Bills receivables received 12,000
Bills receivable dishonoured 3,000
Cheque dishonoured 7,700
Cash sales 80,000
Cash received from debtors 2,30,000
Cheque received from debtors 25,000

The solution is as follows:

Debtors Account
Dr. Cr.
Particulars Amount

Particulars Amount

Balance b/d 45,000 Discount Allowed 2,500
B/R (dishonoured) 3,000 Sales Returns 8,500
Bank (cheque dishonoured) 7,700 Bad-debts (irrecoverable amount) 4,000
Sales – Credit 2,82,300 B/R (received) 12,000
(Balancing figure) Cash 2,30,000
Bank 25,000
Balance c/d 56,000
3,38,000 3,38,000

Credit sales is ₹ 2, 82,300

Total Sales = Cash Sales + Credit Sales
= 80,000 + 2,82,300
= ₹ 3,62,300

25. From the following information, prepare the bills receivable account and total debtors account for the year ended March 31, 2017.

 
Opening balance of debtors 1,80,000
Opening balance of bills receivable 55,000
Cash sales made during the year 95,000
Credit sales made during the year 14,50,000
Return inwards 78,000
Cash received from debtors 10,25,000
Discount allowed to debtors 55,000
Bills receivable endorsed to creditors 60,000
Cash received (bills matured) 80,500
Irrecoverable amount 10,000
Closing balance of bills receivable on March. 31, 2017 75,500

The solution is as follows:

Debtors Account
Dr. Cr.
Particulars Amount

Particulars Amount

Balance b/d 1,80,000 Return Inwards 78,000
Sales—Credit 14,50,000 Discount Allowed 55,000
Cash 10,25,000
Bad debt (irrecoverable amount) 10,000
B/R (received) 1,61,000
Balance c/d 3,01,000
(Balancing figure)
16,30,000 16,30,000
Bills Receivable Account
Dr. Cr.
Particulars Amount

Particulars Amount

Balance b/d 55,000 Cash (Bills matured) 80,500
Creditors (endorsed) 60,000
Balance c/d 75,500
Debtors (received) 1,61,000
(Balancing figure)
2,16,000 2,16,000

The missing figure in the bills receivable account–B/R received from debtors’ is ₹ 1, 61,000 and the missing figure in the debtors account–closing balance is ₹ 3, 01,000.

26. Prepare the suitable accounts and find out the missing figure if any.

 
Opening balance of debtors 14,00,000
Opening balance of bills receivable 7,00,000
Closing balance of bills receivable 3,50,000
Cheque dishonoured 27,000
Cash received from debtors 10,75,000
Cheque received and deposited in the bank 8,25,000
Discount allowed 37,500
Irrecoverable amount 17,500
Returns inwards 28,000
Bills receivable received from customers 1,05,000
Bills receivable matured 2,80,000
Bills discounted 65,000
Bills endorsed to creditors 70,000

The solution is as follows:

Debtors Account
Dr. Cr.
Particulars Amount

Particulars Amount

Balance b/d 14,00,000 Cash 10,75,000
Bank (cheque dishonoured) 27,000 Bank 8,25,000
B/R (dishonoured) 40,000 Discount Allowed 37,500
Bad debt (irrecoverable amount) 17,500
Return Inwards 28,000
Sales—Credit (Balancing figure) 6,21,000 B/R (received) 1,05,000
20,88,000 20,88,000
Bills Receivable Account
Dr. Cr.
Particulars Amount

Particulars Amount

Balance b/d 7,00,000 Cash (B/R matured) 2,80,000
Bank (Bill endorsed) 65,000
Creditors (endorsed) 70,000
Debtors (B/R received) 1,05,000 Balance c/d 3,50,000
Debtors (dishonoured) 40,000
(Balancing figure)
8,05,000 8,05,000

 

As per solution, the missing figure in the bills receivable account is B/R dishonoured of ₹ 40,000. The missing figure in the debtors account is the credit sales of ₹ 6, 21,000.

27. From the following information ascertain the opening balance of sundry debtors and closing balance of sundry creditors

 
Opening stock 30,000
Closing stock 25,000
Opening creditors 50,000
Closing debtors 75,000
Discount allowed by creditors 1,500
Discount allowed to customers 2,500
Cash paid to creditors 1,35,000
Bills payable accepted during the period 30,000
Bills receivable received during the period 75,000
Cash received from customers 2,20,000
Bills receivable dishonoured 3,500
Purchases 2,95,000

 

The rate of gross profit is 25% on selling price and out of the total sales

₹ 85,000 was for cash sales.

 

(Hint: Total sales = 4,00,000 = 3,00,000 × 100 × 100 )
75

The solution is as follows:

Sundry Debtors Account
Dr. Cr.
Particulars Amount

Particulars Amount

Balance b/d 54,000 Discount Allowed 2,500
(Balancing figure) B/R (received) 75,000
B/R (dishonoured) 3,500 Cash 2,20,000
Sales—Credit 3,15,000
Balance c/d 75,000
3,72,500 3,72,500
Sundry Creditors Account
Dr. Cr.
Particulars Amount

Particulars Amount

Discount Received 1,500 Balance b/d 50,000
Cash 1,35,000 Purchases – credit 2,95,000
B/P (accepted) 30,000
Balance c/d 1,78,500
(Balancing figure)
3,45,000 3,45,000

Opening balance of debtors is ₹ 54,000 and the closing balance of creditors is ₹ 1, 78,500.

Working Notes:

Total Sales = Cash Sales + Credit Sales

Total Sales = Cost of Goods Sold + Gross Profit

Cost of Goods Sold = Opening Stock + Purchases – Closing Stock
= 30,000 + 2,95,000 – 25,000
= ₹ 3,00,000

Let us assume the sales to be 100%

Sales = Cost of Goods sold + Gross Profit
Then 100% = Cost of Goods sold + 25%
Cost of Goods Sold = 100% – 25% = 75%
Gross Profit = Cost of Goods Sold × % of Gross Profit
% of Cost of Goods Sold
= 3,00,000 × 25
75
= 1,00,000
Sales = Cost of Goods Sold + Gross Profit
= 3,00,000 + 1,00,000
= ₹ 4,00,000
Total Sales = Cash Sales + Credit Sales
Or, 4,00,000 = 85,000 + Credit Sales
Or, Credit Sales = 4,00,000 – 85,000
= ₹ 3,15,000

Note: It is assumed that all purchases are made on credit.

28. Mrs. Bhavana keeps his books by Single Entry System. You are required to prepare final accounts of her business for the year ended March 31, 2017. Her records relating to cash receipts and cash payments for the above period showed the following particulars:

Summary of Cash
Dr.     Cr.
Receipts Amount ₹ Payments Amount ₹
Opening balance of cash 12,000 Paid to creditors 53,000
Further capital 20,000 Business expenses 12,000
Received from debtors 1,20,000 Wage paid 30,000
    Bhavana’s drawings 15,000
    Balance at bank on 35,000
    March. 31,2017  
    Cash in hand 7,000
  1,52,000   1,52,000
       

The following information is also available:

  April. 01, 2016 March. 31, 2017
     
Debtors   55,000   85,000
Creditors   22,000   29,000
Stock   35,000   70,000
Plant   10,00,000   1,00,000
Machinery   50,000   50,000
Land and Building   2,50,000   2,50,000
Investment   20,000   20,000

 

All her sales and purchases were on credit. Provide depreciation on plant and building by 10% and machinery by 5%, make a provision for bad debts by 5%.

The solution is as follows:

Books of Mrs. Bhavana

Debtors Account

Dr. Cr.
Particulars Amount

Particulars Amount

Balance b/d 55,000 Cash 1,20,000
Sales—Credit 1,50,000 Balance c/d 85,000
2,05,000 2,05,000
Creditors Account
Dr. Cr.
Particulars Amount

Particulars Amount

Cash 53,000 Balance b/d 22,000
Purchases—Credit 60,000
Balance c/d 29,000
82,000 82,000
Statement of Affairs as on April.01, 2016
Particulars Amount

Particulars Amount

Creditors 22,000 Debtors 55,000
Capital—Opening 5,00,000 Stock 35,000
(Balancing figure) Plant 1,00,000
Machinery 50,000
Land and Building 2,50,000
Investment 20,000
Cash 12,000
5,22,000 5,22,000

Plant of ₹ 1, 00,000 has been taken in to the statement of affairs on April 01, 2016, instead of ₹ 10, 00,000.

Trading Account as on March 31, 2017
Dr. Cr.
Particulars Amount

Particulars Amount

Opening Stock 35,000 Sales 1,50,000
Purchases 60,000 Closing Stock 70,000
Wages 30,000
Profit and Loss (Gross Profit) 95,000
(Balancing figure)
2,20,000 2,20,000
Profit and Loss Account
Dr. Cr.
Particulars Amount

Particulars Amount

Business Expenses 12,000 Trading (Gross profit) 95,000
Depreciation on Plant 10,000
Depreciation on Building 25,000
Depreciation Machines 2,500
Provision for Doubtful Debt 4,250
Net Profit 41,250
(Balancing figure)
95,000 95,000
Balance Sheet as on March 31, 2017
Liabilities Amount

Assets Amount

Creditors 29,000 Debtors 85,000
Capital—Opening 5,00,000 Less: 5% Provision

for Bad-debt

(4,250) 80,750
Add: Net Profit 41,250 Stock 70,000
Add: Further Capital 20,000 Plant 1,00,000
5,61,250 Less: 10% Depreciation (10,000) 90,000
Less: Drawings (15,000) 5,46,250
Machinery 50,000
Less: 10% Depreciation (2,500) 47,500
Land and Building 2,50,000
Less: 10% Depreciation (25,000) 2,25,000
Investment 20,000
Cash in Hand 7,000
Cash at Bank 35,000
5,75,250 5,75,250

Concepts covered in this chapter –

  • Meaning of incomplete records
  • Features of incomplete records
  • Reasons of incompleteness and its limitations
  • Ascertainment of profit and loss
  • Preparing statement of affairs
  • Difference between statement of affairs and balance sheet
  • Preparing trading and profit and loss account and the balance sheet
  • Ascertaining credit purchases
  • Ascertainment of credit sales
  • Ascertainment of missing information through summary of cost

Conclusion

NCERT Solutions for Class 11 Accountancy Chapter 11 provides a wide degree of illustrative examples; which assists the students to comprehend and learn quickly. The above mentioned are the illustrations for the Class 11 CBSE syllabus. For more solutions and study materials of NCERT solutions for Class 11 Accountancy, visit BYJU’S or download the app for more information.

 

Leave a Comment

Your email address will not be published. Required fields are marked *