11 November 2009
As there is no other information given, you need not to be worry about tallying the balance sheet. You can simply put 108650 as income over expenditure on the liability side and 12750 on asset side.
Alternatively if you want to tally the B/S, you can show 95900 as drawings on the liability side of the B/S to make income over expenditure to 12750. As from the question it is clearly seems that it is a proprietorship business you can show that much amount as drawing.
11 November 2009
as the opening information is not given, let us assume it as Nil. now, consider the following entries : for sales: Drs. A/c Dr. 2,30,000 To Sales A/c 2,30,000 for purchases: Purchase A/c Dr. 95,750 To Crs. A/c 95,750 for expenses : Expenses A/c Dr. 25,600 To Cash A/c (assumed) 25,600 since nothing is given about how much cash is collected from debtors and what is paid to creditors, let us assume that the creditors are paid fully. for payment to creditors : creditors A/c dr. 95,750 To Cash A/c 95,750 in the above two entries, we have shown total payment of Rs.1,21,350. In addition there is a closing cash balance of Rs. 12,750. it means that total Rs.1,34,100 must have been received from debtors.hence for receipt from debtors: Cash A/c Dr. 1,34,100 To Debtors A/c 1,34,100 it means that bal of drs. i.e 95,900 (2,30,000-1,34,100) will appear into the Balance Sheet. in the question profit is Rs.1,08,650 which will be added to Nil opening capital. hence, liability side will show capital as 1,08,650. On the assets side cash bal. of Rs. 12,750 and Drs. of Rs. 95,900 will be shown and the Balance Sheet will tally. Alternatively, if you want to assume that the whole amount has been received from the Drs, then u can show Rs. 95,900 as drawings in which case instead of showing it on asset side it will be deducted from capital on liability side and your Balance sheet will tally at 12,750. it is simple... no. concentrate more on Journal entries. Thanks and Regards, CA Shakuntala Chhangani
CAclubindia
