Friends, we will see that when we make accounts from
incomplete records, that is, we make complete accounts from
incomplete records, one aspect is that and another aspect
is that we told you the meaning of accounts from incomplete
records in the clip, what was that?
Do not make proper accounts from incomplete records, do not
make a trading balance sheet,
one aspect is that.
In this clip, a client came to your office, he said that I
have received a notice from the income tax department and
they are asking for my income, get the CSA certified, get
it signed, get my income.
You tell him that you have teledata, when he says that if
there was teledata, I would have got it printed, I would
have got it signed, I have not done any data, any
accounting properly yet, I have not maintained any records
completely, I have incomplete records, everything is
incomplete, you take out my income, you take out my profit
and give it by certifying it.
Now you will say no, we are not doing certification, how
can we certify from incomplete records, go, go from here,
that's it, then the work is done.
There is only one religion of CA, do not come out, do not
come out, do not come out for any work.
Yes, you can do it in one case, when you feel that the hard
work is going to be more,
and the other person is whining about the money, then you
can refuse him that no, no, there is nothing like that, we
will not do it.
Yes, tell him that brother, it will take so much money,
this is a job, this is hard work, if you are ready to give
money, then you do it with a lot of hard work.
Okay sir, so let's see how to get a profit from incomplete
records, this is called the statement of affairs method.
I will give you an example for this, you will solve that
example, then you will come and read the notes.
Where is the pad pad, come in front quickly, I have come, I
have come, I have come, I have come.
Come on, write with me, example.
What information will you ask from him, friends, tell me
this, sir, we will take all the information from him,
assets, liabilities, expenses, drawings, and on the basis
of it, we will try to make a profit by hitting our hands
and feet.
I need something, it's not like you will take it out in the
air, I need something, whatever he remembers, tell him,
okay sir.
So Mr.
X has told you about his assets and liabilities and some
depreciation rate drawings etc.
I have given a lot of information, then you have to use it
to make a profit.
As disclosed by Mr. X are as follows.
Drawings 2000 rupees per month.
Everyone please note down.
As disclosed by Mr. X are as follows.
See friends, we have to find out the profit of 21-22, how
much profit was there in 21-22.
There is an equation, opening capital plus additional
capital plus profits minus drawings is equal to closing
capital is equal to closing capital, that how much capital
was there in the beginning of the year, if he adds the
extra money that he has invested in the year and the money
he has earned, the profits that he has earned, plus it and
the money he has taken out from there, minus it, then how
much closing capital is left, it comes out.
Keep this equation in mind, opening capital plus additional
capital plus profits minus drawings is equal to closing
capital.
See sir, from here additional capital was given in your
question for 40,000 rupees, because LIC policy was matured
and he got 40,000 rupees, he brought additional and
invested it in the business, he also invested that money in
the business.
He has told drawings 2000 rupees per month, so the total of
the year is 24,000.
Consider profits as x, because you are looking for profits,
if we get opening capital and if we get closing capital,
then it becomes a thing, yes, if we get opening and closing
capital, then we will get the value of x.
Now this opening and closing capital was not told by the
question, he did not know, we asked the owner, what is the
opening capital, he said that it was in the beginning, 4-5
years ago, when he started the business, it was 3 lakh
rupees, now we do not know, in 5 years, there must have
been a lot of change in capital, yes, it is true, the
effect of profits, the effect of drawings, so he could not
tell the opening and closing capital. But friends, we have
assets and liabilities, if we use them
make a balance sheet, then we can get capital.
Let's see how, see friends, above we will write Mr.
x, balance sheet, here liabilities,
2 years amount, 31st March 2021 and 31st March 2022,
assets, 31st March 2021 and 31st March
2022, quickly put the values, what are the assets in your
question, look up and see,
Sir, building, furniture, inventory, debtors, bank and
cash, what were the liabilities,
loan, creditors, if you minus the total of liabilities from
all the assets, then the capital will come out as a
balancing figure, remember, okay sir, because assets minus
liabilities is equal to capital, this is also an equation,
there are two things in the liabilities side balance sheet,
liabilities and capital, liabilities were given, capital
was missing, it will come out as a balancing figure, write
the value of the building, first write all the opening
figures, 1,50,000, 1,20,000, 40,000,
and 12,000, after that write here, loan 1,00,000, creditors
40,000, now total all the assets and minus the liabilities,
1,00,000 plus 50,000 plus 1,20,000 plus 40,000 plus 70,000
plus 12,000 will come 3,81,200, minus 1,40,000 will come
2,41,200, 2,41,200, got the opening capital,
congratulations, how will the closing
capital come, closing capital will come like this, but sir,
there is a problem, we do not have the closing value of the
building and furniture, it will come 1,00,000 out of
2,50,000, 2,50,000, how much is 1,00,000 out of 2,50,000,
if you minus 2,50,000, then the closing balance will come
97,500, similarly furniture out of 50,000, 10% means 5,000
minus depreciation
will come 45,000, remaining inventory is 2,70, debtor is
90, bank balance is 85, cash is 3,200, total is 5,90,700,
here loan is 80,000, creditors is 70,000, so how much will
be left, 5,90,000 minus 1,00,000, 4,40,000, 7,00,000,
5,90,000, 7,00,000, 7,00,000, 7,00,000, 5,90,000, 7,00,000,
sir, we got the opening and closing capital also,
congratulations, 2,41,200 and 4,40,700, put it here,
2,41,200, 4,40,700, now how will we get the profits, x is
equal to, 4,40,700 will remain here, 2,41,200 will
here and become minus, 40,000
will go here and become minus, minus 24,000 will go to
other side and become plus 24,000, plus 24,000 will become,
now it will finally come out, 1,83,500, yes sir, 1,83,500,
this is how you can find out the profit, my dear friends,
ok sir, what we did, we took an equation, opening capital
plus additional capital plus profits minus drawings is
equal to closing capital, in this consider profits as x and
put other values, in other values if opening and closing
capital is missing, then make a
sheet, make a balance sheet and calculate the opening and
closing capital, put it in the equation and profits will
come in your pocket, means you will get to know the
profits, how much was the profit, 1,83,500, let's go to the
notes, let's see what is written in the notes, this is
called the statement of affairs method, through the
equation, like I have taught you how to get the profit, now
we have taken the profit through the equation, this is
called the statement of affairs method, why?
friends, the balance sheet which we made in this, actually
this balance sheet is called the statement of affairs SOA,
sir this is exactly like a balance sheet, liability amount,
asset amount, why is it called SOA, this is called
statement of affairs, because friends this is based on
estimation, this is based on half distance data, this is
not a proper balance sheet, which has come through journal,
ledger, trial balance, through trading P&L, this is based
on estimation, that's why this is called
of affairs, and the name of this method is statement of
affairs method, from half distance data, we get the profit
of the client, statement of affairs method, means by making
something like a balance sheet, it is made like a dicto
balance sheet, but the name is different, because it is
based
on estimation, this method follows the principles of
balance sheet, step 1, find out opening and closing
capital, by making statement of affairs first, then how
will the profit loss come out, that equation is written in
a different way, that equation is written in a different
way, what you have to do is, leave the equation written in
the notes, the equation which I made you write, you
remember that equation, do you know how it is written here,
here
it is written in this way in the notes, that if we keep the
profits here, and take the remaining things here, then what
will happen, closing capital minus opening capital minus
additional capital plus drawings, and we have done the same
here, closing capital minus opening capital minus
additional capital plus drawings, so in our notes this
equation is written, what is made in the last is written, I
have explained you through the beginning, now if you
remember the beginning equation, then it
be fine, ok sir, the thing is that it goes to the other
side, so friends whenever a client comes to the office, and
says that I have received a notice from income tax, I have
to find out my profit, take out the profit and certify it,
so follow these steps, and get assets and liabilities
written in the notes, and do not think that we will get
stuck by signing, if anything is right, then on the basis
of assumption, there is no proper profit, there is no solid
profit, we will come out and come
so sir, your job is only that you take a representation
from it, take an MR, that the assets and liabilities you
have told us are correct and true, and on the basis of that
we have done your work, take his sign on it, take it and
keep it with you, in the future you will not face any
problem, what can CA do, ask him for the data, on that
basis he can do his calculation and give it, if he tells
you a lie, then you will not face any problem, and the
income tax person himself has said that go and
it done from CA, then you should not refuse that no sir, if
you give a lie then what will happen, we are not making it,
you will not face any problem, do not worry, ok, the stuck
income tax officer has to answer him, he will tell the
truth 100 times, ok.
okay friends, so much for this clip, will talk more in the
next clips, till then thank you, bye bye take care