Incomplete records

FA – L1 – Q97 – Preparation of accounts from incomplete records

Prepare statement of profit or loss, statement of affairs, and statement of financial position for Ansah Ventures for 20X9 using incomplete records.

Question

ANSAH VENTURES

Kwame Ansah is a vehicle spare parts dealer in Kumawu. He pays into his bank account the amount of his cash takings after keeping an amount of GH¢2,000 per week for personal use and after payment of wages and other expenses, which for the accounting period ending 31st December 20X9, were as follows:

Expenses	GH¢
Staff wages	1,440
Goods	120,580
Cleaning	1,200
Carriage	600
Sundry	5,000

The following are his bank transactions:

Bank Transactions	GH¢
Income tax	3,000
Telephone	650
Bank lodgements	15,000
Cash sales	6,000
Bulk sales (cheques)	10,000
Treasury bill interest	5,000
Payments to suppliers	15,000
Rent	11,000
Electricity	650
Balance as at 1st January 20X9	6,000

The following additional information was also provided:

Assets and Liabilities	01/01/20X9 (GH¢)	31/12/20X9 (GH¢)
Furniture & fittings	1,200	1,200
Stocks in trade	10,500	7,650
Payables – Goods purchased	1,670	2,750
Payables – Rent	5,000	6,000
Payables – Electricity	500	650
Payables – Telephone	150	200
Payables – Accountancy fee	–	750
Treasury bills	10,000	15,000
Receivables – Bulk sales	8,000	15,000

Required:
(i) Prepare statement of profit or loss for the year ending 31st December 20X9. (10 marks)
(ii) Prepare statement of affairs as at 1st January 20X9. (2 marks)
(iii) Prepare statement of financial position as at 31st December 20X9. (8 marks)

Answer

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Tags: Capital, Depreciation, Expenses, Incomplete records, Inventory, Payables, Receivables, Statement of affairs, Statement of Financial Position, Statement of profit or loss
Level: Level 1

Topic: Preparation of accounts from incomplete records

FA – L1 – Q96 – Preparation of accounts from incomplete records

Prepare statement of profit or loss and financial position for Kofi's business for 20X9 using incomplete records.

Question

Kofi is in business but does not keep proper books of account. In order to prepare his income and expenditure account for the year ended 31 December 20X9 you are given the following information.

| | 1 Jan 20X9 | 31 Dec 20X9 | | | GH¢000 | GH¢000 | | Inventory on hand | 1,310 | 1,623 | | Receivables | 268 | 412 | | Payables for goods | 712 | 914 | | Payables for expenses | 116 | 103 |

In addition you are able to prepare the following summary of his cash and bank transactions for the year.

| Cash account | | | | | — | GH¢000 | — | GH¢000 | | Balance 1 January | 62 | Payments into bank | 3,050 | | Shop takings | 4,317 | Purchases | 316 | | Cheques cashed | 200 | Expenses | 584 | | | | Drawings | 600 | | | | Balance 31 December | 29 | | | 4,579 | | 4,579 |

| Bank account | | | | GH¢000 | | Balance 1 January | 840 | Cash withdrawn | 200 | | Cheques from customers | 1,416 | Purchases | 2,715 | | Cash paid in | 3,050 | Expenses | 519 | | | | Drawings | 400 | | | | Delivery van (purchased 1 September) | 900 | | | | Balance 31 December | 572 | | | 5,306 | | 5,306 |

In addition Kofi says that he had taken goods for personal consumption and estimates that those goods cost GH¢100,000.
In considering accounts receivable Kofi suggests that a provision is to be made of 5% of amounts due after writing off a specific irrecoverable debt of GH¢30,000.
Depreciation on the delivery van is to be recognised at 20% per annum.

Required:
Prepare the statement of profit or loss and a statement of financial position at 31 December 20X9.

Answer

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Tags: Capital account, Cash Flow, Depreciation, Financial Statements, Incomplete records, Inventory, Payables, Receivables, Statement of Financial Position, Statement of profit or loss
Level: Level 1

Topic: Preparation of accounts from incomplete records

FA – L1 – Q95 – Preparation of accounts from incomplete records

Prepare Kofi Mensah's statement of profit or loss and financial position for 20X9 using incomplete records and bank summary.

Question

Kofi Mensah retired from his employment abroad and returned to this country, where he purchased a small kiosk.
He took over the business on 1 July 20X8, acquiring the existing inventory at a valuation of GH¢1,142,000. The rest of the purchase price was apportioned as to GH¢1,500,000 for fixtures and fittings and the balance for goodwill.
The following day he acquired a second-hand computer and accounts package at a price of GH¢80,000. Unfortunately, Kofi Mensah made an error when printing his year-end accounts causing him to lose all data except for printed a summary listing of payments from the till. Other than this, the only records available were his bank statements and a number of vouchers. Surplus cash was banked during the year.
A summary of his bank account for the year ended 30 June 20X9 shows the following.

Receipts	GH¢000	Payments	GH¢000
Cash introduced	5,000	Purchase of business	3,192
Bankings from shop	16,427	Purchase of accounts computer	80
Loan from mother (long-term) (interest at 5% pa)	1,000	Rent (15 months to 30 September 20X9)	500
		Rates (9 months to 31 March 20X9)	84
		Electricity	92
		Purchases for resale	14,700
		Private cheques	1,122
		Balance 30 June 20X9	2,657
	22,427		22,427

The computer print-out was as follows.

	GH¢000
Cash purchases for resale	1,606
Staff wages	742
Sundry shop expenses	156
Cash drawings	520

On 30 June 20X9 inventory, measured at cost, amounted to GH¢1,542,000, amounts due from customers GH¢74,000, and cash in hand amounted to GH¢54,000. Depreciation is to be recognised on fixtures and fittings at a rate of 10%.
Accounts outstanding on 30 June 20X9 were purchases of GH¢470,000 and rates of GH¢120,000 for the year ended 31 March 20Y0.

Required:
Prepare Kofi Mensah’s statement of profit or loss for the year ended 30 June 20X9 and a statement of financial position at that date.

Answer

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Tags: Accruals, Depreciation, Incomplete records, Inventory, Sole Trader, Statement of Financial Position, Statement of profit or loss
Level: Level 1

Topic: Preparation of accounts from incomplete records

FA – L1 – Q94 – Preparation of accounts from incomplete records

Prepare statement of profit or loss and financial position for a sole trader using incomplete records for 20X9.

Question

Kofi Mensah does not keep proper books of account due to his lack of knowledge of double entry system of accounting. He has supplied you the following information with respect to the year ended 31 December 20X9 from the records kept in his diary:
(i) Transactions during the year:

	GH¢
Cash received from customers	80,000
Discount allowed to customers	1,400
Irrecoverable debts written off	1,800
Cash paid to suppliers	63,000
Discount allowed by suppliers	1,000
Sales returns	3,000
Purchases returns	2,000
Expenses paid	6,000
Drawings	5,000
Rent paid	2,500

(ii) Opening balances as on 1 January 20X9:

Assets and liabilities	GH¢
Receivables	45,000
Payables	24,000
Cash	4,500
Furniture and fixtures	15,000
Inventory	25,000
Motor van	16,000

(iii) Receivables and payables as on 31 December 20X9 amounted to GH¢ 48,600 and GH¢ 27,000 respectively.
(iv) Outstanding expenses as on 31 December 20X9 amounted to GH¢ 1,200.
(v) Depreciation is charged on furniture and fixtures at the rate of 10% and on motor van at 20%.
(vi) Kofi Mensah sells goods at cost plus 40% and follows a policy of maintaining an allowance of 5% of the outstanding receivables.

Required:
Prepare the following:
(a) Statement of profit or loss for the year ended 31 December 20X9.
(b) Statement of financial position as at 31 December 20X9.

Answer

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Tags: Accruals, Bad Debts, Depreciation, Discounts, Incomplete records, Inventory, Payables, Receivables, Statement of Financial Position, Statement of profit or loss
Level: Level 1

Topic: Preparation of accounts from incomplete records

FA – L1 – Q92 – Preparation of accounts from incomplete records

Calculate sales for Iridescent's business for 20X9 using incomplete records and a 40% mark-up

Question

Iridescent is a sole trader. She does not keep a full set of accounting records but does keep some records of transactions and documents. She has asked you to prepare her accounts for the year ended 31 December 20X9.
You have been given a list of the assets and liabilities of the business at the start and end of the year.

Assets and liabilities

	At 1 Jan 20X9	At 31 Dec 20X9
	GH₵000	GH₵000
Trade receivables	5,500	6,100
Trade payables	2,800	3,500
Inventory	10,400	?

Iridescent has no idea what her inventory value was at 31 December as she did not count or value her inventory at the year end.
She has also given you a summary of her bank statements for the year.

Summary of bank statements

	Receipts		Payments
	GH₵000		GH₵000
1 Jan	Balance b/d	1,620	To suppliers
Bankings		65,400	For expenses
			Living expenses
			31 Dec Balance c/d

You have also been able to gather the following information from Iridescent:
i) Iridescent banks her takings from the till each week but before doing so pays GH₵50,000 to her employees and takes GH₵30,000 herself. The business operates for 50 weeks each year.
ii) The till always has a cash float of GH₵100,000.
iii) The sales of the business are both cash and credit sales and are all made at a mark-up of 40%.

Required:
(a) Calculate sales for the year.

(b) Calculate the value of the closing inventory at 31 December 20X9.

Answer

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Tags: Closing Inventory, Incomplete records, Mark-up, Payables, Sole Trader
Level: Level 1

Topic: Preparation of accounts from incomplete records

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FA – L1 – Q97 – Preparation of accounts from incomplete records

Prepare statement of profit or loss, statement of affairs, and statement of financial position for Ansah Ventures for 20X9 using incomplete records.

FA – L1 – Q96 – Preparation of accounts from incomplete records

Prepare statement of profit or loss and financial position for Kofi's business for 20X9 using incomplete records.

FA – L1 – Q95 – Preparation of accounts from incomplete records

Prepare Kofi Mensah's statement of profit or loss and financial position for 20X9 using incomplete records and bank summary.

FA – L1 – Q94 – Preparation of accounts from incomplete records

Prepare statement of profit or loss and financial position for a sole trader using incomplete records for 20X9.

FA – L1 – Q92 – Preparation of accounts from incomplete records

Calculate sales for Iridescent's business for 20X9 using incomplete records and a 40% mark-up

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Prepare statement of profit or loss, statement of affairs, and statement of financial position for Ansah Ventures for 20X9 using incomplete records.

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FA – L1 – Q96 – Preparation of accounts from incomplete records

Prepare statement of profit or loss and financial position for Kofi's business for 20X9 using incomplete records.

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FA – L1 – Q95 – Preparation of accounts from incomplete records

Prepare Kofi Mensah's statement of profit or loss and financial position for 20X9 using incomplete records and bank summary.

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FA – L1 – Q94 – Preparation of accounts from incomplete records

Prepare statement of profit or loss and financial position for a sole trader using incomplete records for 20X9.

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FA – L1 – Q92 – Preparation of accounts from incomplete records

Calculate sales for Iridescent's business for 20X9 using incomplete records and a 40% mark-up

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