The steps are:
(a) from the question, inserts all the figures for both assets and liabilities and use the the capital at the end of financial year 2 to balance the Statement Of Affairs.
(b) after (a),use the simple formulae to compute the Net profit which is =(closing capital + drawings) minus (opening capital + additional capital
ANSWER To Accounting Question No. IR3 On INCOMPLETE RECORDS
(a) Prepare Jim’s Statement Of Affairs as at 31 st March Year 2 and the balancing figure is the capital.
Statement Of Affairs as at 31 st March Year 2
(b) Compute Opening capital & Net profit for Year 2
Calculation Of Opening Capital at 1 April Year 1
Calculation of Net Profit Using the Net Difference between Closing and Opening Capital:
- Revision Notes On Incomplete records
- Accounting Question Test Paper No.IR3 (With Answer) On Incomplete Records
- Section 169 Companies Act 1965-Profit & Loss Account, Balance Sheet & Directors' Report
- Revision Notes: Financial Statements
- Computation Of Profit/(Loss) From Incomplete Records ( Method 1: Comparison Method)