Preparation of accounts for Single Entry and Incomplete Records

Incomplete records and missing figures

EXAMPLE

A trader known as Bushiri does not keep proper books of accounts. However, he provides the following particulars:

	31-12-10	31-12-11
	Sh.	Sh.
Cash at bank	45,000	30,000
Cash in hand	3,000	40,000
Stock in trade	400,000	450,000
Debtors	120,000	200,000
Creditors	300,000	200,000
Equipment	50,000	50,000
Furniture	40,000	40,000

Additional information:

• During the year 2011, Bushiri introduced Sh. 60,000 as additional capital and withdrew Sh. 40,000 as drawings.
• Write off depreciation on furniture at 10% and on equipment at 5%.

Prepare statements of affairs at the end of years 2010 and 2011 as well as statement of profit or loss for the year ended 31^st December 2011.

Statement of affairs as at 31^st Dec 2010

Liabilities		Assets
		Non-current asset
Capital	268,000	Equipment	50,000
		Furniture	40,000
			90,000
		Current assets
		Debtors	120,000
Current liabilities		Stock	400,000
Creditors	300,000	Cash in hand	3,000
		Cash at bank	45,000
	568,000		568,000

Statement of affairs as at 31^st Dec 2011

Liabilities		Assets
		Non-current assets
Capital	603,500	Equipment	47,500
		Furniture	36,000
			83,500
		Current assets
		Debtors	200,000
Current liabilities		Stock	450,000
Creditors	200,000	Cash in hand	40,000
		Cash at bank	30,000
	803,500		803,500

Statement of computing net profit or net loss

Opening Capital + Additional Capital + Net profit – Drawings = Closing capital

$268,000 + 60,000 + \text{Net profit} - 40,000 = 603,500$

$328,000 + \text{Net profit} - 40,000 = 603,500$

$\text{Net profit} = 603,500 - 288,000$

$\therefore \text{Net profit} = 315,500$