Accounting Question Test Paper No.IR3 (With Answer) On Incomplete Records

October 8th, 2008 Comments off
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The below question illustrates the preparation of a simple Statement Of Affair (all the assets and liabilities are given with the balancing figure of the capital) and using the net difference of closing and opening capital adjustments to compute the net profit:-

Jim commenced business on 1 April Year 1 with $5,000 in the business bank account and a motor vehicle at $3,500 which he transferred to the business. He failed to keep ledger accounts. During the year to 31 st March Year 2, Jim drew goods which cost $3,200 for his own personal use and drew cash amounting to $8,150. At 31 st March Year 2, the business assets and liabilities were:

 

 

$

Motor car at valuation

2,800

Closing stock at cost

3,195

Rates prepaid

360

Wages accrued due

470

Cash in hand

190

Fixtures & Fittings (cost $4,000)

3,600

Debtors

2,180

Creditors

1,310

Loan(at interest of 10% per annum) from Johnny

3,000

Interest on Loan accrued due

150,

Bank overdraft

1,420

 

Required:

(a) Prepare a Statement Of Affairs to show Jim’s Capital at 31 st March Year 2 (16 marks)

(b) Calculate Capital at the start of business and using this figure together with his Capital at end of the financial year, calculate Jim’s profit for the year ended 31 st March Year 2 (9 marks)

REFER ANSWER

 

 

 

 

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Financial Accounting

 
 

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