C hapter 2: Single entry and incomplete

records
Contents of chapter
This chapter shows how to deduce missing figures such as gross and net profits from single entry and
incomplete records. It also shows how to calculate stock or cash lost.

This chapter also covers the final accounts of non-profit making organisations, e.g. clubs and associations, etc.
drawn up from incomplete records.

Notes for teachers

There are many small businesses using single entry or incomplete records.
1

Remember that if only one figure is missing, we can deduce that figure, e.g.
2
(i) $
Opening capital 25,000
Add Net profit (A) ? must be $25,500
?
Less Drawings 11,500
Closing capital 39,000

(ii) $
Opening capital (B) ? must be $33,000
Add Net profit 37,000
?
Less Drawings 16,000
Closing capital 54,000

(iii) Total Debtors

$ $
Balances b/f 14,800 Cash and bank 85,000
Credit sales (C) ? Balances c/f 17,000
102,000 102,000

Credit sales for the period (C) must be $87,200.

(iv) Total Creditors

$ $
Cash and bank 64,800 Balances b/f 13,400
Balances c/f 17,100 Credit purchases (D) ?
81,900 81,900

Credit purchases for the period (D) must be $68,500.

8
3 Goods stolen or lost by fire etc.

Stock loss, usually known, can be estimated by using ratios and stock movement records from the date of
last stock-taking to the date of the accident. Without such computations, the firm would not be able to
make an insurance claim in respect of the loss.

4 A statement of affairs is drawn up to deduce the missing figure of opening capital.

5 A cash and bank summary lets us start to be able to draw up a proper set of final accounts.
Comparing double entry and single entry:
Double entry: Trial balance + Adjustments = Basis for drawing up final accounts.
Single entry: Cash book summary + Adjustments = Basis for drawing up final accounts.

Non-profit making organisations

6
(i) The difference between assets and liabilities on the statement of affairs is the balance of the
accumulated fund.
(ii) An income and expenditure account is drawn up to find whether there is a surplus of income over
expenditure or an excess of expenditure over income.
(iii) Non-profit making organisations may have some activities which are run to make a profit to help
finance the organisations.

9
 Answers to MCQs and exercises
2.1 A 2.2 C 2.3 B 2.4 B 2.5 D

2.6
(a) (Date omitted)
Total Debtors
$ $
Balances b/f 2,760 Cash 14,610
Sales (balancing figure) 14,940 Balances c/f 3,090
17,700 17,700

Total Creditors
$ $
Cash 9,390 Balances b/f 1,080
Balances c/f 1,320 Purchases (balancing figure) 9,630
10,710 10,710

(b)
K Chan
Trading Account for the year ended 31 October 20X6
$ $
Opening stock 2,010 Sales 14,940
Add Purchases 9,630
11,640
Less Closing stock 2,160
Cost of goods sold 9,480
Gross profit 5,460
14,940 14,940

2.7X
Workings:
(W1)
Total Debtors
20X7 $ 20X8 $
Jun 1 Balances b/f 5,670 May 31 Bank 45,112
20X8 " 31 Balances c/f 6,108
May 31 Sales (balancing figure) 45,550
51,220 51,220

(W2)
Total Creditors
20X8 $ 20X7 $
May 31 Bank 29,375 Jun 1 Balances b/f 3,410
" 31 Balances c/f 4,126 20X8
May 31 Purchases (balancing figure) 30,091
33,501 33,501

10
 Trading Account for the year ended 31 May 20X8
$ $
Opening stock 11,590 Sales (W1) 45,550
Add Purchases (W2) 30,091
41,681
Less Closing stock (balancing figure) 9,796
Cost of goods sold 31,885
Gross profit ($45,550 × 30%) 13,665
45,550 45,550

2.8
T Yeung
Statement of Affairs as at 31 August 20X4
Cost Accumulated Net book
depreciation value
$ $ $
Fixed Assets
Equipment 5,400 600 4,800
Motor vehicle 12,600 3,000 9,600
18,000 3,600 14,400
Current Assets
Stock 16,200
Debtors 9,600
Cash 300 26,100
Less Current Liabilities
Creditors 9,800
Bank overdraft 6,000 15,800
Net current assets 10,300
24,700

Less Long-term Liabilities

Loan from W Au 11,200
13,500
Financed by:
Capital 10,000
Add Net profit (balancing figure) 21,500
31,500
Less Drawings 18,000
13,500

2.9X
(a)
L Lee
Statements of Affairs as at 30 June
20X7 20X8 20X7 20X8
$ $ $ $
Fixtures 2,500 2,200 Capital (balancing figure) 17,566 22,900
Stock 8,690 9,245 Creditors 5,322 3,798
Debtors 6,277 7,040
Bank 5,211 8,116
Cash 210 97
22,888 26,698 22,888 26,698

11
 (b) $
Capital as at 30.6.20X7 17,566
Add Net profit (balancing figure) 9,632
Additional capital 1,000
28,198
Less Drawings ($4,927 + $371) 5,298
Capital as at 30.6.20X8 22,900

(c) Capital
20X8 $ 20X7 $
Jun 30 Drawings 5,298 Jul 1 Balance b/f 17,566
" 30 Balance c/f 22,900 20X8
Jun 30 Bank 1,000
" 30 Profit and loss 9,632
28,198 28,198

2.10X
(a)
William Lam
Statement of Affairs as at 31 August 20X6
$
Cash 230
Bank 4,418
Office equipment 8,000
Stock 33,480
Debtors 23,780
Car 6,000
75,908
Less Creditors 18,104
Capital as at 31.8.20X6 57,804
(b)
William Lam
Statement of Affairs as at 31 August 20X7
Cost Accumulated Net book
depreciation value
Fixed Assets $ $ $
Office equipment 12,000 1,800 10,200
Car 6,000 800 5,200
18,000 2,600 15,400
Current Assets
Stock 42,982
Debtors 16,642
Expenses prepaid 144
Cash 168 59,936

Less Current Liabilities

Creditors 12,004
Expenses owing 472
Bank overdraft 330 12,806
Net current assets 47,130
62,530

12
 Financed by:
Capital as at 1.9.20X6 57,804
Add Cash introduced 5,600
Net profit (balancing figure) 14,246
77,650
Less Drawings 15,120
62,530

2.11
(a)
Capital at 31.12.20X3 $
Bank 1,890
Cash 48
Stock 11,163
Debtors 6,013
Rates prepaid 282
Van 2,800
22,196
Less Creditors 4,896
17,300

(b)
Cash Book
Cash Bank Cash Bank
$ $ $ $
Balances b/f 48 1,890 Cash 5,400
Debtors 44,656 Creditors 642 31,695
Sales 698 Rent 2,750
Loan from T Ho 2,000 Rates 1,316
Bank 5,400 Drawings 5,289 3,095
Sundry expenses 122 1,642
Balances c/f 93 2,648
6,146 48,546 6,146 48,546

(c)
Nancy Kwan
Trading and Profit and Loss Account for the year ended 31 December 20X4
$ $
Sales ($7,132 + $44,656 – $6,013 + $698) 46,473
Less Cost of goods sold:
Opening stock 11,163
Add Purchases ($5,091 + $31,695 – $4,896 + $642) 32,532
43,695
Less Closing stock 13,021 30,674
Gross profit 15,799
Less Expenses:
Rent ($2,750 + $250) 3,000
Rates ($1,316 + $282 – $312) 1,286
Sundry expenses ($1,642 + $122) 1,764
Depreciation: Van ($2,800 – $2,400) 400 6,450
Net profit 9,349

13
 2.12
(a)
G Choy
Statement of Affairs as at 1 January 20X7
$ $
Stock 55,448
Debtors 36,124
Rates prepaid 840
Furniture and fittings 10,000
Bank 1,620
104,032
Less Creditors 22,496
Rent owing 600 23,096
Capital 80,936

(b)
W1: Sales W2: Purchases
Receipts: $ Payments: $
Bank 151,744 Bank 117,948
Cash 38,520 Cash 11,976
190,264 129,924
– Opening debtors 36,124 – Opening creditors 22,496
154,140 107,428
+ Closing debtors 34,496 + Closing creditors 29,556
Sales for the year 188,636 Purchases for the year 136,984

W3: Rates prepaid $ W4: Rent owing $

Paid 3,560 Paid 6,600
+ Opening balance 840 – Opening balance 600
4,400 Rent for the year 6,000
– Closing balance 900
Rates for the year 3,500

G Choy
Trading and Profit and Loss Account for the year ended 31 December 20X7
$ $
Sales (W1) 188,636
Less Cost of goods sold:
Opening stock 55,448
Add Purchases (W2) 136,984
192,432
Less Closing stock 60,576 131,856
Gross profit 56,780

Less Expenses:
Wages 21,888
Rates (W3) 3,500
Rent (W4) 6,000
Sundry expenses 1,500
Depreciation: Furniture and fittings ($10,000 – $9,000) 1,000 33,888
Net profit 22,892

14
 G Choy
Balance Sheet as at 31 December 20X7
Cost Aggregate Net book
depreciation value
Fixed Assets $ $ $
Furniture and fittings 10,000 1,000 9,000
Current Assets
Stock 60,576
Debtors 34,496
Rates prepaid 900 95,972
Less Current Liabilities
Creditors 29,556
Bank overdraft 2,408 31,964
Net current assets 64,008
73,008
Financed by:
Capital as at 1.1.20X7 80,936
Add Net profit 22,892
103,828
Less Drawings ($26,164 + $4,656) 30,820
73,008

2.14X
(a)
Total Debtors
20X8 $ 20X9 $
Apr 1 Balances b/f 2,980 Mar 31 Cash 10,820
20X9 " 31 Balances c/f (balancing figure) 3,680
Mar 31 Sales 11,520
14,500 14,500

Total Creditors
20X9 $ 20X8 $
Mar 31 Cash 7,780 Apr 1 Balances b/f 1,880
" 31 Balances c/f (balancing figure) 2,220 20X9
Mar 31 Purchases 8,120
10,000 10,000

(b) 31.3.20X8 31.3.20X9

$ $
Bank 1,460 1,740
Office furniture 600 500
Stock 2,320 2,620
Cash 60 80
Debtors 2,980 3,680
7,420 8,620
Less Creditors 1,880 2,220
Capital 5,540 6,400

15
 (c) $
Capital 31.3.20X8 5,540
Add Net profit (B) 3,400
(A) 8,940
Less Drawings 2,540
Capital as at 31.3.20X9 6,400

By arithmetical deduction, (A) is $8,940. Thus $5,540 + (B) = $8,940, i.e. (B) is $3,400.

2.15
(a)
Cash Book
Cash Bank Cash Bank
$ $ $ $
Capital 280,000 Equipment 137,200
Debtors 151,480 Fixtures and fittings 53,200
Sales 92,820 197,120 Creditors 331,800
Rent and rates 25,200
Electricity 8,400
Sundry expenses 4,480 18,900
Drawings 53,200
Travel expenses 2,940
Wages 32,200
Balance c/f 53,900
92,820 628,600 92,820 628,600
(b)
W1:
Total Debtors
$ $
Credit sales (balancing figure) 196,560 Discounts allowed 3,920
Bad debts 1,680
Bank 151,480
Balances c/f ($41,160 – $1,680) 39,480
196,560 196,560

Credit sales $196,560 + Cash sales ($197,120 + $92,820) = Total sales $486,500

W2:
Total Creditors
$ $
Bank 331,800 Purchases (balancing figure) 381,640
Discounts received 2,940
Balances c/f 46,900
381,640 381,640

W3:

Manager’s commission = 10% × $18,410 = $1,674

(100 + 10)%

16
 K Han
Trading and Profit and Loss Account for the year ended 31 March 20X5
$ $
Sales (W1) 486,500
Less Cost of goods sold:
Purchases (W2) 381,640
Less Closing stock 41,090 340,550
Gross profit 145,950
Add Discounts received 2,940
148,890
Less Expenses:
Wages 32,200
Rent and rates 25,200
Electricity 8,400
Travel expenses 2,940
Sundry expenses ($18,900 + $4,480) 23,380
Discounts allowed 3,920
Bad debts 1,680
Depreciation:
Equipment ($137,200 × 20%) 27,440
Fixtures and fittings ($53,200 × 10%) 5,320
Manager’s commission (W3) 1,674 132,154
Net profit 16,736

(c)
K Han
Balance Sheet as at 31 March 20X5
Fixed Assets $ $ $
Equipment 137,200
Less Depreciation 27,440 109,760
Fixtures and fittings 53,200
Less Depreciation 5,320 47,880
157,640
Current Assets
Stock 41,090
Debtors (W1) 39,480
Bank 53,900
134,470
Less Current Liabilities
Creditors 46,900
Manager’s commission owing 1,674 48,574
Net current assets 85,896
243,536
Financed by:
Capital
Cash introduced 280,000
Add Net profit 16,736
296,736
Less Drawings 53,200
243,536

17
 2.16
(a)
Total Debtors
$ $
Balances b/f 16,840 Bank 67,595
Sales (balancing figure) 76,770 Cash 6,630
Balances c/f 19,385
93,610 93,610

Total Creditors
$ $
Bank 49,382 Balances b/f 6,238
Cash 406 Purchases (balancing figure) 47,737
Balances c/f 4,187
53,975 53,975

(b)
Cash
$ $
Balance b/f (balancing figure) 165 Drawings 6,070
Cash loan 500 Creditors 406
Debtors 6,630 General expenses 707
Balance c/f 112
7,295 7,295

(c) Capital 1.1.20X6 $ $

Stock 10,500
Cash 165
Debtors 16,840
Rent paid in advance 115
Vans ($8,000 – $2,000 – $1,500) 4,500
Fixtures [$2,000 – ($2,000 × 10% × 3)] 1,400
33,520
Less Bank overdraft 2,059
Creditors 6,238
Motor expenses owing 123 8,420
25,100
(d)
S Au
Trading and Profit and Loss Account for the year ended 31 December 20X6
$ $
Sales 76,770
Less Cost of good sold:
Opening stock 10,500
Add Purchases 47,737
58,237
Less Closing stock 11,370 46,867
Gross profit 29,903
Less Expenses:
Rent and rates ($3,728 + $115 + $230) 4,073
Motor expenses ($4,624 – $123 + $238) 4,739
General expenses ($846 + $707) 1,553
1
Loan interest ($500 × 16% × ) 40
2
Depreciation: Van ($4,500 × 25%) 1,125
Fixtures [($2,000 + $3,500) × 10%] 550 12,080
Net profit 17,823

18
2.17
(a)
Bank
$ $
Furniture disposals 72,220 Balance (overdraft) b/f 62,790
Debtors (balancing figure) 1,098,602 Wages 162,245
Creditors 769,170
Rent, rates and electricity 31,370
Sundry expenses 24,177
Furniture (W1) 85,000
Balance c/f 36,070
1,170,822 1,170,822

W1: $
Furniture at cost as at 30.4.20X6 88,000
Less Furniture sold, at cost 41,000
47,000
Add Bought during the year (balancing figure) 85,000
Furniture at cost as at 30.4.20X7 132,000

(b)
K Shin
Trading and Profit and Loss Account for the year ended 30 April 20X7
$ $
Sales (W2) 1,212,712
Less Cost of goods sold:
Opening stock 127,110
Add Purchases (W3) 767,855
894,965
Less Closing stock 108,920 786,045
Gross profit 426,667
Add Profit on sale of furniture (W4) 35,620
462,287
Less Expenses:
Wages 162,245
Rent, rates and electricity (W5) 31,510
Sundry expenses 24,177
Depreciation: Furniture and fixtures (W6) 13,200 231,132
Net profit 231,155

W2:
Total Debtors
$ $
Balances b/f 114,160 Bank 1,098,602
Sales (balancing figure) 1,212,712 Drawings 159,000
Balances c/f 69,270
1,326,872 1,326,872

W3:
Total Creditors
$ $
Bank 769,170 Balances b/f 101,115
Balances c/f 118,220 Purchases (balancing figure) 786,275
887,390 887,390

∴ Net purchases = $786,275 – $18,420 = $767,855

19
 W4:
Disposals of Furniture
$ $
Furniture and fixtures 41,000 Bank 72,220
Profit and loss (balancing figure) 35,620 Provision for depreciation ($41,000 – $36,600) 4,400
76,620 76,620

W5:
Rent, Rates and Electricity
$ $
Rates prepaid b/f 2,090 Accrued electricity b/f 1,410
Bank 31,370 Profit and loss (balancing figure) 31,510
Accrued electricity c/f 2,330 Rates prepaid c/f 2,870
35,790 35,790
W6:
Depreciation on furniture and fixtures:
$132,000 (W1) × 10% = $13,200

K Shin
Balance Sheet as at 30 April 20X7
Fixed Assets $ $ $
Furniture and fixtures at cost 132,000
Less Aggregate depreciation (W7) 18,200 113,800
Current Assets
Stock 108,920
Trade debtors 69,270
Prepayments (rates) 2,870
Bank 36,070
217,130
Less Current Liabilities
Trade creditors 118,220
Accrued expenses (electricity) 2,330 120,550
Net current assets 96,580
210,380
Financed by:
Capital
Balance at 1.5.20X6 (W8) 156,645
Add Net profit 231,155
387,800
Less Drawings ($18,420 + $159,000) 177,420
210,380
W7: $
Provision for depreciation: Balance b/f 9,400
Less Furniture sold 4,400
5,000
Add For the year (see W6) 13,200
18,200

20
 W8:
Statement of Affairs as at 1 May 20X6
Assets $ $
Furniture and fixtures, at net value ($88,000 – $9,400) 78,600
Stock 127,110
Trade debtors 114,160
Prepaid rates 2,090
321,960
Less Liabilities
Bank overdraft 62,790
Trade creditors 101,115
Accrued electricity 1,410 165,315
Capital as at 1 May 20X6 156,645

2.18X
(a)
Statement of Affairs as at 1 January 20X1
$ $
Display equipment (at net book value) 7,310
Car (at net book value) 6,400
Stock 1,000
Cash at bank 4,100
Cash in hand 100
18,910
Less Creditors 3,350
Loan from father 10,000 13,350
Capital as at 1.1.20X1 5,560

(b) Calculation of bank balance as at 31 December 20X1

Bank
$ $
Balance b/f 4,100 Rates 630
Sales 56,000 Insurance 1,300
Payments to suppliers 25,250
Loan interest 550
Drawings 8,000
Motor expenses 670
Shop assistants’ wages 8,000
Purchase of new display stand 2,000
Sundry expenses 360
Electricity 625
Rent of shop 5,600
Telephone 200
Balance c/f (balancing figure) 6,915
60,100 60,100

21
 (c)
May Pak
Trading and Profit and Loss Account for the year ended 31 December 20X1
$ $
Sales 56,000
Less Cost of sales:
Opening stock 1,000
Add Purchases (balancing figure) 22,400
23,400
Less Closing stock 1,000 22,400
Gross profit ($56,000 × 60%) 33,600
Less Expenses:
Rates 630
Insurance 1,300
Loan interest ($10,000 × 6%) 600
Motor expenses ($670 + $73) 743
Wages (shop assistants) 8,000
Sundry expenses 360
Electricity 625
Rent of shop 5,600
Telephone ($200 + $48) 248
Depreciation:
Car ($8,000 × 20%) 1,600
Display equipment [($8,600 + $2,000) × 15%] 1,590 21,296
Net profit 12,304

May Pak
Balance Sheet as at 31 December 20X1
Cost Accumulated Net book
depreciation value
Fixed Assets $ $ $
Display equipment 10,600 2,880 7,720
Car 8,000 3,200 4,800
18,600 6,080 12,520

Current Assets
Stock 1,000
Cash at bank 6,915
Cash in hand 100 8,015
Less Current Liabilities
Creditors ($3,350 + $22,400 – $25,250) 500
Accruals ($73 + $48 + $50) 171 671
Net current assets 7,344
19,864
Less Long-term Liability
Loan from father 10,000
9,864
Financed by:
Capital as at 1 January 20X1 5,560
Add Net profit 12,304
17,864
Less Drawings 8,000
9,864

22
2.19
F Tong
Trading Account for the period from 1 January 20X6 to 17 March 20X7
$ $
Opening stock 8,640 Sales 7,740
Add Purchases 4,530
13,170
Less Closing stock (C) 6,720
Cost of goods sold (B) 6,450
Gross profit (A) 1,290
7,740 7,740

4 ,500 2 1
Gross profit percentage last year = × 100% = 16 % or
27 ,000 3 6
1
So (A) is × $7,740 = $1,290
6
(B) is therefore $7,740 – $1,290 = $6,450
(C) is therefore $13,170 – $6,450 = $6,720
Of the $6,720 stock owned by Tong, $360 worth was in transit and therefore not destroyed by fire.
Stock at cost, lost in fire = $6,720 – $360 = $6,360

2.20X
K Chan
Trading Account for the period from 1 January 20X6 to 5 May 20X6
$ $
Sales 33,120
Less Cost of goods sold:
Stock 1.1.20X6 11,600
Add Purchases 25,600
37,200
Less Stock 5.5.20X6 (C) 12,360 (B) 24,840
Gross profit (A) 8,280

$24 ,000 1
Gross profit percentage last year = =
1
$96 ,000 4
So (A) is × $33,120 = $8,280
4
(B) is therefore $33,120 – $8,280 = $24,840
(C) is therefore $37,200 – $24,840 = $12,360
$ $
Stock owned 5.5.2002 12,360
Less Goods not delivered 960
Less Goods not stolen 760 1,720
Stock loss in the burglary 10,640

2.21X

(a) Bank
$ $
Balance b/f 103,440 Trade creditors 945,600
Receipts from debtors (W4) 1,391,520 Rent and rates 161,280
Drawings 103,200
Administration costs 176,640
Balance c/f (difference) 108,240
1,494,960 1,494,960

23
 Workings need to be done in the following order:
1. Find purchases.
2. Find cost of goods sold.
3. Calculate sales.
4. Calculate cash received from debtors.

W1: Purchases
Total Creditors
$ $
Bank 945,600 Balances b/f 100,800
Discounts received 28,800 Purchases (difference) 1,056,000
Balances c/f 182,400
1,156,800 1,156,800

W2: Calculation of the cost of goods sold:

Cost of goods sold and lost in fire $

Opening stock 44,800
Add Purchases (W1) 1,056,000
1,100,800
Less Closing stock 140,800
960,000

$
Of which: Lost in fire 96,000
Cost of goods sold (balancing figure) 864,000
960,000

W3: Calculation of sales:

2
Margin is 40 per cent or 2 and therefore mark-up is .
5 3

$
Cost of goods sold 864,000
2
Add Mark-up ($864,000 × ) 576,000
3
Sales 1,440,000

W4: Calculation of receipts from debtors:

Total Debtors
$ $
Balances b/f 151,200 Discounts allowed 38,880
Sales (W3) 1,440,000 Cash received (balancing figure) 1,391,520
Balances c/f 160,800
1,591,200 1,591,200

24
(b)
Anna Dai
Trading and Profit and Loss Account for the year ended 31 March 20X8
$ $
Sales (W3) 1,440,000
Less Cost of goods sold:
Opening stock 44,800
Add Purchases (W1) 1,056,000
1,100,800
Less Closing stock 140,800
960,000
Less Stock lost in fire 96,000
(W2) 864,000
Gross profit 576,000
Add Discounts received 28,800
604,800
Less Expenses:
Cost of goods lost in fire 96,000
Rent and rates 168,480
Administration costs ($176,640 + $2,880 – $1,920) 177,600
Discounts allowed 38,880
Depreciation: Office premises (W5) 12,000
Delivery van (W5) 14,400 507,360
Net profit 97,440

W5: Office premises $240,000 × 5% = $12,000

Delivery van ($120,000 – $48,000) × 20% = $14,400

(c)
Anna Dai
Balance Sheet as at 31 March 20X8
$ $ $
Fixed Assets
Office premises at cost 240,000
Less Depreciation to date ($144,000 + $12,000) 156,000 84,000
Delivery van at cost 120,000
Less Depreciation to date ($48,000 + $14,400) 62,400 57,600
141,600
Current Assets
Stock 140,800
Debtors 160,800
Prepaid expenses 1,920
Bank 108,240
411,760
Less Current Liabilities
Trade creditors 182,400
Expenses owing ($168,480 – $161,280 + $5,520) 12,720 195,120
Net current assets 216,640
358,240
Financed by:
Capital as at 1.4.20X7 364,000
Add Net profit 97,440
461,440
Less Drawings 103,200
358,240

25
 2.22
Total Debtors
$ $
Balances b/f 11,520 Bank 38,160
Sales 42,320 Cash (balancing figure) 3,250
Discounts allowed 840
Balances c/f 11,590
53,840 53,840

Cash
$ $
Balance b/f 8,260 Expenses 2,180
Debtors 3,250 Drawings 5,000
Profit and loss (cash loss) (balancing figure) 3,530
Balance c/f 800
11,510 11,510

2.23X
Total Creditors
$ $
Bank 12,560 Balances b/f 21,698
Cash (balancing figure) (A) 27,374 Credit purchases 43,609
Balances c/f 25,373
65,307 65,307

Total Debtors
$ $
Balances b/f 30,874 Cash (balancing figure) (B) 143,436
Credit sales 129,010 Balances c/f 16,448
159,884 159,884

Cash
$ $
Balance b/f 3,910 Cash banked 49,800
Cash from debtors (B) 143,436 Cash to creditors (A) 27,374
Cash sales 8,660 Electricity 1,070
Cash purchases 2,120
Drawings 5,850
Cashier’s salary 10,720
Cash shortage (C) 52,850
Balance c/f 6,222
156,006 156,006

Cash shortage (C) $52,850 is the balancing figure in the cash account.

26
2.24X
Workings:
W1: Sales for the period: $
Opening stock 42,800
Add Purchases 87,100
129,900
Less Closing stock 39,720
Sales (at cost) 90,180
1 1
If margin = 20 per cent or , mark-up = or 25%. Therefore, sales (at selling price) = $90,180 x 125% = $112,725
5 4
W2:
Total Creditors
$ $
Bank (Balancing figure) 68,920 Balances b/f 146,400
Discounts received 1,380 Purchases 87,100
Balances c/f 163,200
233,500 233,500

W3:
Petty Cash
$ $
Balance b/f 687 Payments 1,128
Bank 2,313 Balance c/f 1,872
3,000 3,000

(a)
Cash
$ $
Balance b/f 10,260 Expenses 14,780
Sales ($112,725 × 20%) 22,545 Balance c/f 18,025
32,805 32,805

Cash stolen = $18,025 + $1,872 = $19,897

(b)
Bank
$ $
Balance b/f 62,180 Creditors 68,920
Sales ($112,725 × 80%) 90,180 Rates 6,500
Petty cash 2,313
Balance c/f 74,627
152,360 152,360

2.25
(a)
Quarry Bay Table Tennis Club
Trading Account for the year ended 31 December 20X5
$ $
Sales — Table tennis equipment 171,600
Less Cost of goods sold:
Opening stock 26,565
Add Purchases (W1) 144,100
170,665
Less Closing stock 28,050 142,615
Profit from sale of table tennis equipment 28,985
27
 W1:
Total Creditors — Table Tennis Equipment
$ $
Bank 145,200 Balances b/f 14,850
Balances c/f 13,750 Purchases (balancing figure) 144,100
158,950 158,950

(b)
Quarry Bay Table Tennis Club
Income and Expenditure Account for the year ended 31 December 20X5
Income $ $
Subscriptions (W2) 66,165
Profit from sale of table tennis equipment 28,985
Profit from table tennis competition 11,220
106,370
Less Expenditure
Rent of premises 26,400
Rates of premises ($5,170 + $5,170) 10,340
Floor repairs 1,815
Administration costs 14,850
Tuition fees 13,530
Loss from annual dinner ($17,765 + $1,155 – $16,610) 2,310
Legal expenses 3,300
Loss from sale of fixtures ($10,560 – $8,800) 1,760
Depreciation: Fixtures ($18,150 × 10%) 1,815 76,120
Surplus of income over expenditure 30,250

W2:
Subscription
$ $
Owing b/f 2,475 Paid in advance b/f 3,135
Income and expenditure Bank (for 20X4) 2,475
(balancing figure) 66,165 Bank (for 20X5) 63,030
Paid in advance c/f 2,145 Bank (for 20X6) 2,145
70,785 70,785

(c)
Quarry Bay Table Tennis Club
Balance Sheet as at 31 December 20X5
Fixed Assets $ $ $
Fixtures 18,150
Less Aggregate depreciation 1,815 16,335
Current Assets
Stock 28,050
Prepayment (rent) 13,200
Cash at bank 62,040
103,290
Less Current Liabilities
Sundry creditors ($1,155 + $13,750 + $3,300) 18,205
Subscriptions received in advance 2,145 20,350
Net current asset 82,940
99,275
Financed by:
Accumulated fund as at 1.1.20X5 (W3) 69,025
Add Surplus of income over expenditure 30,250
99,275

28
 W3:
Accumulated fund at 31.12.20X4:
$ $
Bank 29,040
Old fixtures, at net book value 10,560
Stock of table tennis equipment 26,565
Rent prepaid 13,200
Rates prepaid 5,170
Subscriptions owing 2,475
87,010
Less Subscriptions received in advance 3,135
Sundry creditors 14,850 17,985
69,025

2.26X
(a)
Finance is Good Club
Finance Books Trading Account for the year ended 31 March 20X4
$ $
Sales income 23,148
Less Cost of goods sold:
Opening stock 3,690
Add Purchases (W1) 9,198
12,888
Less Closing stock 2,952 9,936
Gross profit 13,212
Less Expenses:
Wages and salaries (W2) 1,125
Net profit 12,087
W1: $
Paid to creditors 9,828
– Creditors 31.3.20X3 7,740
2,088
+ Creditors 31.3.20X4 7,110
Purchases 9,198

W2: (Paid $3,600 + Owing $900) × 25% = $1,125

(b)
Finance is Good Club
Income and Expenditure Account for the year ended 31 March 20X4
$ $
Income
Subscriptions receivable for the year ($90 × 80) + ($180 × 120) 28,800
Profit from sales of finance books 12,087
40,887
Less Expenditure
Wages and salaries ($3,600 + $900) × 75% 3,375
Lighting 2,106
Loss from ‘Finance yourself’ course 576
Presents for guests 2,340
Subscriptions owing written off 720
Depreciation ($27,000 + $86,400) × 20% 22,680 31,797
Surplus of income over expenditure 9,090

29
 (c)
Finance is Good Club
Balance Sheet as at 31 March 20X4
$ $ $
Fixed Assets
Clubhouse at cost 1,440,000
Computers: Cost ($61,200 + $86,400) 147,600
Less Provision for depreciation to date ($61,200 – $27,000 + $22,680) 56,880 90,720
1,530,720

Current Assets
Stock of books 2,952
Subscriptions in arrear ($28,800 – $25,650) 3,150
6,102
Less Current Liabilities
Creditors for books 7,110
Wages and salaries owing 900
Subscriptions in advance 1,620
Bank overdraft (W3) 38,772 48,402 (42,300)
1,488,420
Financed by:
Accumulated fund
Balance as at 31.3.20X3 (W4) 1,479,330
Add Surplus of income over expenditure 9,090
1,488,420

W3: This is the closing balance of the receipts and payments account. Debit side $72,918 – Credit side $111,690
= Overdraft $38,772.

W4: Clubhouse $1,440,000 + Computers $27,000 + Stock $3,690 + Bank $15,660 + Subscriptions owing $720 –
Creditors for supplies $7,740 = $1,479,330.

2.27
(a)
Mr Ho
Trading and Profit and Loss account for the year ended 31 March 20X1
$ $
Sales ($2,180,000 + $380,000) 2,560,000
Less Cost of goods sold:
Purchases ($890,000 + $210,000) 1,100,000
Less Closing stock 110,000 990,000
Gross profit 1,570,000
Add Interest income 6,300
1,576,300
Less Expenses:
6
Insurance ($1,800 × ) 900
12
Salaries 832,000
Rent ($220,000 – $20,000) 200,000
Bank charges 500
Sundry expenses 40,000
Depreciation: Office equipment ($10,000 × 20%) 2,000
Van ($75,000 – $40,000) 35,000
Furniture ($54,000 – $42,000) 12,000 1,122,400
Net profit 453,900

30
(b)
Balance Sheet as at 31 March 20X1
Fixed Assets $ $
Office equipment ($10,000 – $2,000) 8,000
Van 40,000
Furniture 42,000 90,000
Current Assets
Stock 110,000
Trade debtors 380,000
Prepayment ($20,000 + $ 900) 20,900
Bank 225,000
735,900
Less Current Liabilities
Trade creditors 210,000
Net current assets 525,900
615,900
Financed by:
Capital ($75,000 + $54,000 + $126,000) 255,000
Add Profit for the year 453,900
708,900
Less Drawings ($72,000 + $21,000) 93,000
615,900

31