Single Entry and Incomplete Record ( )

I. Introduction
The basic concept of keeping accounting records is to use the Double-entry
system. However, most small firms use the single-entry system or their records
are incomplete. Students have to solve the problem by converting them into
formal ( ) double-entry system.
II. Some Common Accounting Computations from Incomplete Records
A. Opening Capital
Opening Capital = Opening Assets – Opening Liabilities
Opening here means the starting date/first day of the financial period/year.
Example 1:
K Wong is a sole trader who does not keep his business transactions under a double-entry
system but he keeps accurate ( ) records. From his records the following information has
been obtained:
1 January 2000
Rs.

Premises 50,000
Furniture and Fittings 7,500
Stock 9,100
Debtors 6,700
Cash at Bank 3,100
Creditors 5,800
His financial year ends on 31 December each year.
REQUIRED:
Calculate K Wong’s Capital as at 1 January 2000.
Solution 1:
Since K Wong’s financial year ends on 31 December every year, the capital on 1
January 2000 is his opening capital.
Capital at 1.1.2000 =
A Statement of Affairs is prepared to find the answer. It is a statement looking
exactly as to a Balance Sheet. The only difference is a Statement of Affairs
stems from incomplete record while Balance Sheet stems from double-entry
system.
K. Wong
Statement of Affairs as at 1 January 2000

Assets
Less: Liabilities
Capital as at 1 January 2000 =

B. Closing Capital
The formula to find closing capital is the same as opening capital, the only difference is
the date.
Closing Capital = Closing Assets – Closing Liabilities
Note : Closing means the ending date/last day of the financial period/year.
Example 2:
The facts are the same as in Example 1. From his records, the following information has
been obtained:
31 December 2000
Rs
Premises 52,000
Furniture and Fittings 7,200
Motor Vehicle 5,500
Stock 10,200
Debtors 6,200
Bank Overdraft 2,800
Creditors 6,300
His financial year ends on 31 December each year.
REQUIRED:
Calculate K. Wong’s Capital as at 31 December 2000.
Ch.33 F.5 PA - Incomplete Record/LWL
Solution 2:
Since K. Wong’s financial year ends on 31 December every year the capital on
31 December 2000 is his Closing Capital.
Formula:
Capital at 31.12.2000 =
K. Wong
Statement of Affairs as at 31 December 2000
Assets
Less : Liabilities = Capital at 31 December 2000 =

C. Net Profit for the Year

Formula:
Net Profit = Closing Capital + Drawings – Opening Capital – Additional
Capital Introduced
Example 3:
The facts are the same as in Examples 1 and 2. The following information is
added:
K. Wong drew $120 each month for his personal used from the business bank
account. In June 2000, he further put $2,000 into the business.