Justin, who keeps books by single entry, had submitted his Income-tax returns to Income-tax authorities showing his incomes to be as follows : $. Year ending March 31, 2010 = 33,075 Year ending March 31, 2013 = 61,875 Year ending March 31, 2011 = 33,300 Year ending March 31, 2014 = 54,630 %3D Year ending March 31, 2012 = 35,415 Year ending March 31, 2015 = 41,670 The Income tax Officer is not satisfied as to the accuracy of the incomes returned. You are appointed as a consultant to assist in establishing correctness of the incomes returned and for that purpose you are given the following information : (a) Business liabilities and assets at March 31, 2009 were : Creditors : $ 32,940, Furniture & Fittings :$ 22,500, Stock: $ 24,390 (at selling price which is 25% above cost), Debtors :$ 11,025, Cash at Bank and in hand $ 15,615. (b) Justin owed his brother $ 18,000 on March 31, 2009. On February 15, 2012 he repaid this amount and on April 1, 2014, he lent his brother $ 13,500. (c) Justin owns a house which he purchased in 2003 for 90,000 and a car which he purchased on October 2010 for $ 33,750. In January, 2014, he bought debentures in X Ltd. Having face value of $ 40,000 for $ 33,750. (d) In May, 2014 a sum of $ 13,500 was stolen from his house. (e) Justin estimates that his living expenses have been 2009-10-$ 13,500; 2010-11- $ 18,000; 2011-12- $ 27,000; 2012-13, 2013-14 and 2014-2015- $ 31,500 p.a. exclusive of the amount stolen. (f) On March 31, 2015 business liabilities and assets were : Creditors $ 37,800, Furniture, Fixtures and Fittings $ 40,500, Stock $ 54,330 (at selling price with a gross profit of 25%), Debtors $ 26,640, Cash-in-hand and at Bank $ 29,025. From the information submitted, prepare statements showing whether or not the incomes declared by Justin are correct.
Justin, who keeps books by single entry, had submitted his Income-tax returns to Income-tax authorities showing his incomes to be as follows : $. Year ending March 31, 2010 = 33,075 Year ending March 31, 2013 = 61,875 Year ending March 31, 2011 = 33,300 Year ending March 31, 2014 = 54,630 %3D Year ending March 31, 2012 = 35,415 Year ending March 31, 2015 = 41,670 The Income tax Officer is not satisfied as to the accuracy of the incomes returned. You are appointed as a consultant to assist in establishing correctness of the incomes returned and for that purpose you are given the following information : (a) Business liabilities and assets at March 31, 2009 were : Creditors : $ 32,940, Furniture & Fittings :$ 22,500, Stock: $ 24,390 (at selling price which is 25% above cost), Debtors :$ 11,025, Cash at Bank and in hand $ 15,615. (b) Justin owed his brother $ 18,000 on March 31, 2009. On February 15, 2012 he repaid this amount and on April 1, 2014, he lent his brother $ 13,500. (c) Justin owns a house which he purchased in 2003 for 90,000 and a car which he purchased on October 2010 for $ 33,750. In January, 2014, he bought debentures in X Ltd. Having face value of $ 40,000 for $ 33,750. (d) In May, 2014 a sum of $ 13,500 was stolen from his house. (e) Justin estimates that his living expenses have been 2009-10-$ 13,500; 2010-11- $ 18,000; 2011-12- $ 27,000; 2012-13, 2013-14 and 2014-2015- $ 31,500 p.a. exclusive of the amount stolen. (f) On March 31, 2015 business liabilities and assets were : Creditors $ 37,800, Furniture, Fixtures and Fittings $ 40,500, Stock $ 54,330 (at selling price with a gross profit of 25%), Debtors $ 26,640, Cash-in-hand and at Bank $ 29,025. From the information submitted, prepare statements showing whether or not the incomes declared by Justin are correct.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Justin, who keeps books by single entry, had submitted his Income-tax returns to Income-tax
authorities showing his incomes to be as follows :
$.
Year ending March 31, 2010 = 33,075 Year ending March 31, 2013 = 61,875
Year ending March 31, 2011 = 33,300 Year ending March 31, 2014 = 54,630
Year ending March 31, 2012 = 35,415 Year ending March 31, 2015 = 41,670
The Income tax Officer is not satisfied as to the accuracy of the incomes returned. You are appointed
as a consultant to assist in establishing correctness of the incomes returned and for that purpose you
are given the following information :
(a) Business liabilities and assets at March 31, 2009 were : Creditors : $ 32,940, Furniture &
Fittings : $ 22,500, Stock: $24,390 (at selling price which is 25% above cost), Debtors :$
11,025, Cash at Bank and in hand $ 15,615.
(b) Justin owed his brother $ 18,000 on March 31, 2009. On February 15, 2012 he repaid this
amount and on April 1, 2014, he lent his brother $ 13,500.
(c) Justin owns a house which he purchased in 2003 for 90,000 and a car which he purchased on
October 2010 for $ 33,750. In January, 2014, he bought debentures in X Ltd. Having face value
of $ 40,000 for $ 33,750.
(d) In May, 2014 a sum of $ 13,500 was stolen from his house.
(e) Justin estimates that his living expenses have been 2009-10-$ 13,500; 2010-11- $ 18,000;
2011-12-$ 27,000; 2012-13, 2013-14 and 2014-2015- $ 31,500 p.a. exclusive of the amount
stolen.
(f) On March 31, 2015 business liabilities and assets were : Creditors $ 37,800, Furniture, Fixtures
and Fittings $ 40,500, Stock $ 54,330 (at selling price with a gross profit of 25%), Debtors $
26,640, Cash-in-hand and at Bank $ 29,025.
From the information submitted, prepare statements showing whether or not the incomes declared by
Justin are correct.
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