03 May 2019
Hi, Supoose Mr. A has started business with capital of Rs.1 Lac and invested in purchasing stock for his shop. He almost invested his capital in purchasing stocks only. How record this entry in balance sheet. As liability side is showing greater amount than assets side. PURCHASE 200000 SALES 230000 CLOSING STOCK 48000 MISC. EXPENSES 39000 NET PROFIT 79000 OTHER INCOMES 40000
CAPITAL 100000 FURNITURE 15000 CASH 31000 NET PROFIT 79000 CLOSING STOCK 48000 DIFFERENCE 85000
WHAT IS MISSING IN THIS BALANCE SHEET , PLEASE SUGGEST ...
03 May 2019
Dear Gurdeep, You are certainly missing the amount of creditors on Liabilities Side. As the figures are provided by you, Capital stands out to be Rs. 1,00,000 which means available cash/Bank was Rs. 1Lac , so how can the purchases be made, furniture be bought in excess of Rs. 1,00,000 without getting credit from your suppliers.
The Balance amount should be adjusted via "Creditors For Goods" and "Creditors for Capital Goods" head.
04 May 2019
Depreciation is missing, debtor and creditor not shown? Cash Balance 31000/ to be verify correctness of Cash and bank balance
Your working capital is equal to Net profit, where is your cash balance of capital introduced? 100000/- Out of which Exps to furniture 15000/ different 85000/- which is not reflected in cash, Debtors?
CAclubindia
