One of my client filing return for 4 year under section 44Ad and no balance sheet prepared by Client and Tax practioner (not me)
Now the client want me to prepaed Balance sheet for year 2016-17 .my querry is how to dertermined capital balance as on 1st apirl 2016(opening capital balance)
Use This
Owners Equity at the End *****
Add: Drawings During the Year *****
Less: Additional Capital During the Year *****
Adjusted Owners Equity at the End *****
Less: Owners Equity at the End *****
Net Profit For the Year *****
where there is no books of accounts, we can go for accounting treatment under incomeplete books of accounts.
here we can go for statement of affairs method to determine opening capital.
Excesss of Assests minus liabilities is the capital, first see how much capital is invested,add back profit of each year and less personal drawings the balance figures normaly will tally or at least it will come near to that figures other way is difference amount take as gift from relatives,if the period is more than six years old calling for accounts is less
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