Accounts from Incomplete RecordsQ-4 | Accounts from Incomplete RecordsQuestion 4823 of 24
All Questions

Varun does not maintain proper books of account. However, he maintains a record of his bank transactions and also is able to give the following information from which you are requested to prepare trading and profit and loss account for the year 2024: 01.01.2024 31.12.2024 Stock 50,000 62,500 Fixed Assets 7,500 9,000 Details of his Bank transactions were as follows: Sale of Fixed Assets (book value 2,500) 1,750 Expenses paid 49,250 Purchase of fixed assets 50,000 Number of cash transactions took place during the year. Goods are sold at cost plus 25%. Cost of goods was 2,60,000. [MTP Jan 2025]

For any discrepancies in this question, email contact@cadada.in

Ad

Detailed Solution & Explanation

Trading and Profit and Loss Account for the year ended 31st December, 2024 Particulars Amount Particulars Amount To Opening stock To Purchases (balancing figure) To Gross profit c/ d [2,60,000 x 25/100] 50,000 2,72,500 65,000 By Sales (2,60,000 X 125/100) By Closing stock 3,25,000 62,500 3,87,500 3,87,500 To Expenses To Loss on sale of fixed assets (W.N.1) To Depreciation on fixed assets (W.N.1) To Net profit 49,250 750 1,000 14,000 By Gross profit b/ d 65,000 Total 65,000 Total 65,000 Working Note: Fixed Assets A/ c Particulars Amount Particulars Amount To Balance b/ d To Bank (Purchases) 7,500 5,000 By Bank (sale) By Loss on sale of fixed asset (2,500-1,750) By Depreciation (bal. fig) By Balance c/ d 1,750 750 1,000 9,000 Total 12,500 Total 12,500

About This Chapter: Final Accounts

Paper

Paper 1: Accounting

Weightage

25-30%

Key Topics

Sole Proprietor, NPO, Manufacturing

This chapter covers Sole Proprietor, NPO, Manufacturing and is part of Paper 1: Accounting in the CA Foundation exam.

View Official ICAI Syllabus

Exam Strategy Tip

This topic carries 25-30% weightage. Focus on understanding core concepts rather than memorizing.

Key Concepts to Understand

Profit and Loss Account

The second part of the final accounts that records all indirect incomes and indirect expenses to determine the Net Profit or Net Loss for the accounting period. It starts with Gross Profit from the Trading Account.

Related Comparison Tables

Revenue Expenditure vs Capital Expenditure: AccountsTrading Account vs P&L Account: Final Accounts ExplainedSLM vs WDV Depreciation: CA Foundation Accounts

More Questions from Accounts from Incomplete Records

From the following income and expenditure account of a Club for the year-ending 31 March, 2024, you are required to prepare receipt and payment account for the year ending 31 March, 2024 and Balance Sheet as on 1 April, 2023. INCOME AND EXPENDITURE ACCOUNT For the year ending 31st March, 2024 Expenditure Amount Income Amount To Lawn Maintenance To General Expenses To Stationery (depreciation) To Depreciation on Sports Material To Honorarium To excess of income over expenditure 42,000 13,000 1,500 22,000 10,400 44,500 By Subscription By Admission Fees By Sports Material (sale of 2nd Hand Material) By Entertainment 1,05,000 12,000 2,400 14,000 1,33,400 1,33,400 Additional information 1/04/2023 31/03/2024 Cash at bank 60,000 - Stock of sports material 30,000 - Tournament Fund (after deducting tournament expenses of 14,000) - 6,000 Donations for club Building - 1,40,000 Subscription Due 10,000 15,000 Stationery Stock 4,000 - Stationery was depreciated by 25% and Sports material by 50%, [Jan. 2025, 10 Marks]

Statement of Affairs and Balance Sheet.

Single Entry System & Double Entry System

In net worth method profit or loss of the business is calculated by preparing trading and profit & loss account.

As per Companies Act, 2013, a company may prepare its records under single entry system.

Closing Capital means Opening Capital + Additional Capital + Drawings Profit.

Ready to Master Accounts from Incomplete Records?

Practice all 24 questions with instant feedback, earn XP, track your streaks, and ace your CA Foundation exam.

Start Practicing — It's Free