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Single Entry and Incomplete Records

1. The document provides instructions for preparing financial statements from single entry and incomplete records. 2. It outlines steps for determining total sales and purchases, adjusting accruals and prepayments, and calculating opening capital. 3. The document also provides an example of preparing income statement, statement of financial position, and other accounts like sales ledger from incomplete records.

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California Knight
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1K views5 pages

Single Entry and Incomplete Records

1. The document provides instructions for preparing financial statements from single entry and incomplete records. 2. It outlines steps for determining total sales and purchases, adjusting accruals and prepayments, and calculating opening capital. 3. The document also provides an example of preparing income statement, statement of financial position, and other accounts like sales ledger from incomplete records.

Uploaded by

California Knight
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
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Chapter - 40, page 616

Single Entry and Incomplete records

To find solutions from single entry/incomplete records:

1. Sales ledger control account: credit sales,


Where total sales = credit sales + cash sales

2. Purchase ledger control account: credit purchases,


Where total purchases = credit purchase + cash purchase

3. Adjust Accruals and Prepayments:


I) Expense Account
II) Income Account

4. Calculate the opening capital: Opening Assets - Opening Liabilities

5. Calculate depreciation using the revaluation method:


I) Opening book value - Closing book value
II) Opening book value + purchase of new non-current assets (CP) - sales
of old non-current asset (CP/BV) - Closing book value

Receipts and Payments Account (Cash and Bank Account Summary)


Date Details $ Date Details $
2021 2021
Jan - 1 Balance b/d Jan - 1 Balance b/d
(opening asset) xxx (opening liability) xxx
Receipts xxx Payments xxx
Dec - 31 Balance c/d Dec - 31 Balance c/d (closing
(closing liability) xxx asset) xxx
Practice Work:
Exercise - 35.4

Sales ledger (Debtor’s A/c)


Date Details $ Date Details $
Balance b/d 21200
Credit sales 89,790 Bank 91190
Balance c/d 19800

Total Sales = 89,790 + 17,400 = 107,190

Purchase ledger (Creditor’s A/c)


Date Details $ Date Details $
Balance b/d 12700
Bank 67360 Credit purchase 68,760
Balance c/d 14100

Total Purchase = 68,760 + 4940 = 73,700

Rent A/c
Date Details $ Date Details $
Balance b/d 390
(owing)
Bank 3950 Income 3,560
Statement

Insurance A/c
Date Details $ Date Details $
Balance b/d 420
(prepaid)
Bank 1470 Income 1,450
statement
Balance c/d 440
(prepaid)

Capital = Assets - Liabilities


= (4100 + 10800 + 21200 + 420 + 1800) - (12700 + 390)
= 25,230

Depreciation: 1800 - 1600 = 200


Income statement for the year ended
Details $ $
Sales 107,190
- Cost of Sales
Opening inventory 10800
+ purchase 73,700
84,500
- closing inventory (12200)
(72,300)
Gross Profit 34,890
- Expenses
Rent 3,560
Insurance 1,450
Sundry expenses 610
Wages 11260
Depreciation 200
(17,080)
Profit for the year 17,810
Statement of financial position
Details Cost Depreciation Net Book Value
Non-current assets:
Fixtures 1600

Current Assets:
Inventory 12,200
Debtors 19,800
Insurance 440
32,440
Total Assets 34,040

Financed by:
Capital 25,230
+ profit for the year 17,810
- Drawings (28,200 + 1200) (29,400)
13,640
+ Current Liabilities
Accounts Payable 14,100
Bank overdraft 6,300
Total equity and liability 34,040

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