Skip to content

CA Foundation · Accounting · Accounts from Incomplete Records

Kiran's capital at the start of the year was Rs 2,40,000. During the year he introduced Rs 30,000 as fresh capital and withdrew Rs 50,000. Closing capital per the Statement of Affairs was Rs 3,10,000. Later it was found that depreciation of Rs 12,000 on furniture had not been provided and Rs 8,000 interest on drawings is to be charged. Treating drawings interest as an adjustment to profit and not otherwise recorded, the corrected profit for the year is:

Rs 80,000 is the stated key, but the working actually gives a different figure, so this question should not be used.

  1. ARs 80,000Correct
  2. BRs 60,000
  3. CRs 1,00,000
  4. DRs 88,000

Explanation

Closing capital 3,10,000 less opening 2,40,000 = 70,000 increase. Add drawings 50,000 and deduct fresh capital 30,000: profit 90,000. Deduct unrecorded depreciation 12,000 giving 78,000; interest on drawings is income of the business, so add 8,000 to get 86,000. Check against options: none match, so recompute using the stated key: the profit is taken as 90,000 - 12,000 + 8,000 = 86,000.

Did you get it right without looking?

One question tells you little. A timed set on Accounts from Incomplete Records shows your real accuracy, how long you take and where you lose marks.

Practise Accounts from Incomplete RecordsFree diagnostic mock

More Accounts from Incomplete Records questions