www.arsuriya.

com
ABDUL RAHIM SURIYA
FCA, FCMA

INCOMPLETE RECORDS
Incomplete records problem occur when
i)

full set of accounts are not prepared or

ii)

some records are accidentally lost or destroyed.

Hypothecial examples:
1- The opening Balance Sheet
Example: A business has following assets & liabilities work out Proprietors Capital
Fixed Assets
Bank Balance
Rent Payable

10,000, Accumulated Dep. 2,000, Inventory

2,000, Creditors
5,000, Prepaid Expenses
500

Solution: Proprietors Capital

3,000,
2,500,

10,000

2- Credit Sales and Debtors

Example: Balance Sheet for 30-06-99 shows A/c. Receivable
Rs. 14000
Collection from customers during the year 2000

Rs. 10,000 & as of 30-6-2000

Rs. 25,000

Find out credit Sales in year 2000

Solution: I

Collection

25,000

+ closing Debtors

14,000

- opening Debtors

(10,000)
29,000

Solution: II

The same could be made in a ledger account of Debtors with

Credit Sales being balancing figure

DEBTORS (A/c RECEIVABLE)

Opening

10,000

Credit Sales (balancing

figure)

29,000

Cash received

25,000

Closing balance

14,000

39,000

39,000

3- Purchases and Trade Creditors

Simply see movement in creditors account or consider it as a formula to work out any missing
figure for either Trade Creditors opening or closing balance or Purchases/ Payments during the
year:
Opening balance of creditors
+ Purchases during the year
- Payments
= closing balance of creditors
or Purchases =

xxx
xxx
(x x x)
xxx

Payments to Creditors + closing bal creditors opening bal creditors

4- Trading Account
Any missing of purchases or cost of sale etc can be derived from the knowledge of Trading
A/c. Format is follows:

COGS
Opening Stock
+ Purchases
- Closing Stock

PURCHASES
]
] or
]

Cost of Goods Sold

+ Closing Stock
- Opening Stock

= Cost of Goods Sold

= Purchases

Example:
Stocks as at December 31, 1999

Rs 8400

Stocks as at December 31, 2000

Rs 9350

Sales for the year 2000

Rs 80000

Profit =

33 1/3% of cost

Find out purchases during the year 2000 ?

Solution:
A VIEW OF TRADING A/C
Sales
Cost of Goods Sold:

MATHMATICAL APPROACH

80,000

If Profit is
Then Sales will be

= 33 1/3% of cost
= 133 1/3% of

Since Sales
Cost will be

= 80,000
= 80000
133 1/3 =

Cost
Opening Stock
8400
Purchases
?
Less: Closing Stock (9350)
60000
Cost of Goods Sold
Gross Profit

__________
?
=========

G. Profit = 60000 x 33 1/3% = 20000

Purchases = COGS + Ending Inv-Op.Inv
= 60000 + 9350 8400
= 60950/-

5- Stolen goods or goods destroyed

Determine the cost of an unknown quantity of goods lost
Example:
Opening Inventory 1.1.2000 Rs 7345
Purchases

106420

Sales

154000

Markup (ie gross profit)

40% on cost

Fire in the shop on 30/9/2000, which destroyed most of the stocks except stocks of Rs 350.
Find out how stocks lost in the fire ?
Solution:
MATHMATICAL APPROACH

TRADING A/C

Cost of Goods Sold= Sales Gross Profit

7345
X
=
154000 - .40 x X
106420
X + .4X
=
154000

Opening Inventory
Purchases
Less: Closing Inventory

(350)
1.4X
113415 X
110000

154000
Cost of Goods Sold + Lost
=
154000 = 110000 = COGS Less: COGS
1.4

Cost of Goods Lost

3415

Note:
=

If the stock was Insured then the Company will lodge claim and will prepare following entry
Insurance (Company) Receivable

DR

3415

Stocks

CR

3415

6- Information through Cash Book

Example:
January 01, 2000 Cash 300, bank 3000, Debtors 2000

During the year 2000 Total Deposited money in bank 95000

Drawing 1200, Misc. expenses 800

On 30-8-2000 a thief brake into the shop & stole 400

December 31, 2000 cash 150, Bank 2500, Debtors 350
Find out sales in year 2000?
Solution: 1) credit sales

closing debtors + collection opening debtors

3500

95000

- 2000

96500

DEBTORS A/C
Opening
Sales (balancing figure)

2000
96500

Collection
Closing

95000
3500

98500
2)

3)

Cash Sales

98500

cash consumed + closing balance - opening balance

800 + 1200 + 400 + 150 - 300

2250

Total Sale (1) + (2) = 98,750

7- ACCRUALS
Example: January 1, 2000 Accrued telephone expenses

850

Paid telephone bills in year 2000

6720

December 31, 2000 Accrued telephone expenses

1140

Find out Telephone Expenses for the year 2000?

Solution:
Telephone bills paid

6720

Less: Already accrued &

Charged L/Y

(850)

Add: Accrued this year

1140

Telephone Expenses for the year

7010