Professional Documents
Culture Documents
ASSIGNMENT-A
Question 1
Journalize the following transactions in the books of Mr. Walter:
a) Paid rent of building $ 12,000 half of the building is used by the
proprietor for residential use.
b) Paid fire insurance of the above building in advance $ 1,000.
c) Paid life insurance premium $ 2,000.
d) Paid income-tax $ 3,000.
ANSWER
Date
01-04-13
02-04-13
03-04-13
04-04-13
Particulars
Drawing A/c
To Cash A/c
(Being Paid Rent of the Building)
Drawing A/c
DR
To Cash A/c
(Being Paid Fire Insurance)
Drawing A/c
DR
To Cash A/c
(Being Paid Life Insurance)
Salary A/c
DR
To Cash A/c
(Being Paid Salary to Clerk)
12,000
1,000
2,000
500
12,000
1,000
2,000
500
05-04-13
06-04-13
07-04-13
08-04-13
09-04-13
10-04-13
Depreciation A/c
DR
To Cash A/c
(Being Charged Depreciation on
Furniture)
Capital A/c
DR
To Interest A/c
(Being got Interest on Capital)
Interest A/c
DR
To Drawing A/c
(Being Charged Interest on
Drawing )
Ram A/c
DR
To Interest A/c
(Being Provided Interest on Loan
to Ram)
Advance Commission A/c
DR
To Commission A/c
1,200
4,500
900
3,000
500
Brokerage A/c
To Cash A/c
(Being Brokerage due to Us)
500
DR
1,200
4,500
900
3,000
500
500
Question 2
From following figures extracted from the books of Mr. XYZ, you are required
to prepare a Trading & Profit & Loss Account for the year ended 31st March,
2008 and a Balance Sheet as on that date after making the necessary
adjustments.
$
Mr. XYZs Capital
$
228,800
Stock 1.4.2007
38,500
Mr. XYZ
Drawings
13,200
Wages
35,200
Plant &
Machinery
99,000
Sundry creditors
44,000
Freehold
property
66,000
Postage &
Telegrams
1,540
Purchases
110,000
Insurance
1,760
Returns
outwards
1,100
2,970
Salaries
13,200
Bad debts
660
Office Expenses
2,750
Office rent
2,860
Loose tools
2,900
Sundry Debtors
29,260
Factory lighting
1,100
44,000
Provision for
doubtful debts
880
Balance on
1.4.2007
Cash at bank
Bills payable
ANSWER
Question 3
1,100
Interest
on loan to Mr.
Krish
29,260
5,500
Cash in hand
sales
2,640
231,440
Following is the Trial Balance of M/s. Trinity Foods as on 30th June 2007
(after closing Nominal Accounts). Prepare a Balance Sheet on the basis of
this trial balance.
Particulars
Debit (in Rupees) Credit( in Rupees)
Cash
10,000
Capital
1,00,000
Bank
77,000
Furniture
25,000
Ram
15,000
Rahim
50,000
Trading & Profit & Loss
47,000
1,62,000
1,62,000
ANSWER
Amount
1,00,000
15,000
47,000
1,62,000
Assets
Cash
Bank
Furniture
Rahim
Amount
10,000
77,000
25,000
50,000
1,62,000
Question 4
Given below are the financial statements of Safal Enterprises, using the tool
of ratio analysis comment on the profitability and liquidity position of the
firm for the year 2006-07. Total no. of shares outstanding for the firm is
2.69crores. In the view of growth opportunities in the near future the firm
has been maintaining a policy of 45% payout.
Answer
Particulars
2006
2007
1.
3.44
33.22/11.25=3
2.
1.71
33.02-16.64/11.25=
17.18/11.25= 1.52
4.22 Times
= 144/37.50 = 3.84
Times
2.54 Times
144/37.50 = 3.84
Times
8.06 Times
29.26/4.01= 7.24
Times
38.4 %
26.71/60.07= 44.5%
3.
4.
5.
6.
7.
8.
20/51.96
Debt to Equity Ratio= Total
Debt/Total
Equity= 20/31/96
Profit Margin= Net Income/ Sales=
13.24/132=
9.
62.5%
26.71/33.36 = 80%
10%
15.79/144= 10.96%
25.48 %
15.79/60.07 =
26.2%
15.79/33.36= 47.3 %
13.24
15.79
Question 5
Given below are the balance sheets of the two firms- Gloria Ltd and Victoria
Ltd as on 31st March 2007.
1. Can the financial positions of the two firms be compared assuming that
the two firms fall in the same industry?
Answer
Yes, The Financial conditions and positions of the two firms can be
compared assuming that the two firms fall in the same Industry. The
reason behind this is that all the accounts of both the companies are
similar.
ASSIGNMENT-B
Question 1
Find out the cost of raw material purchased from the data given below:
Particulars
Rs.
Prime Cost
2,00,000
Closing Stock of Raw Material
20,000
Direct Labour Cost
1,00,000
Expenses on Purchases
10,000
ANSWER
Cost of Raw Material Purchases is Rs. 2, 90, 000.
Question 2
The product of a manufacturing concern passes through two processes A
and B and then to finished stock. It is ascertained that in process A
normally 5% of the total input is scrap which realizes Rs. 80 per tonne.
From the following information relating to process A for the month of
August 2007, prepare process A account.
Materials
500 Tonnes
Cost Of Materials
Rs.125/Tonne
Wages
Rs.14000
Manufacturing Overheads
Rs.4000
Output
415 Tonnes
ANSWER
Process A Account
DR
CR
Particular
Quantity
Amount
Particular
Quantity
Amount
To Material
(in
Tonnes)
500
To Labour
(In
Rupees)
62,500 By Normal Loss
(in
Tonnes)
25
(In
Rupees)
2,000
25
2,000
14,000
To Overhead
4,000
500
80,500
Question 3
Ahmedabad Company Ltd. manufactures and sells four types of products
under the brand name Ambience, Luxury, Comfort and Lavish. The sales
mix in value comprises the following:
Brand name Percentage
Ambience 33 1/3
Luxury 41 2/3
Comfort 16 2/3
Lavish 8 1/3
-----100
The total budgeted sales (100%) are $ 600,000 per month.
The operating costs are:
Ambience 60% of selling price Luxury
Luxury 68% of selling price Comfort
Comfort 80% of selling price Lavish
Lavish 40% of selling price
The fixed costs are $. 159,000 per month.
a. Calculate the breakeven point for the products on an overall basis.
b. It has been proposed to change the sales mix as follows, with the sales
per month remaining at $. 6,00,000:
Brand Name Percentage
Ambience 25
Luxury 40
Comfort 30
Lavish 05
---
100
Assuming that this proposal is implemented, calculate the new breakeven
point.
ANSWER
Ambiance
3,97,500
Luxury
Fixed
Cost/Contribution
Margin
4,96,875
Comfort
Fixed
Cost/Contribution
Margin
7,95,000
Lavish
Fixed
Cost/Contribution
Margin
2,65,000
Case Study
Questions
1. Is the profitability performance of the firm satisfactory? If not, how can it
be improved?
ANSWER
ASSIGNMENT-C
State whether the following are true or false:
1. Accounting is a language of business.
Answer- True
2. Accounting is a service function.
Answer- True
3. Accounting records only those transactions and events which are financial
character.
Answer- True
4. Drawings reduce capital.
Answer- True
5. Capital is increased by profit and decreased by losses.
Answer- True
6. The system of recording transaction on the basis of their two old aspects is
called double entry system.
Answer- True
7. Purchases made from B for cash should be debited to B.
Answer- False
8. Earnings of revenue means increase in Cash/Bank balance.
Answer- True
9. The balance of an account is always known by the side which is shorter.
Answer- True
10. The return of goods by a customer should be debited to Returns Inwards
Account.
Answer- False
11. Goods bought for resale are referred to as Stocks.
Answer- False
12. If the business has any liability, the proprietors capital must be more
than the total assets.
Answer- False
13. Withdrawal of money by the owner is an expense for the business.
Answer- False
14. Ledger is called the book of final entry.
Answer- True
15. Cash book is used to record all receipts and payments of cash.
Answer- True
16. Sales book is used to record all credit sales.
Answer- False
17. The journal is not a book of original entry.
Answer- False
18. Goodwill is an intangible asset.
Answer- True
19. Salaries & Wages appearing in the trial balance are shown on the
liabilities side of the balance sheet.
Answer- True
20. The profit & loss account is one of the financial statements.
Answer- True
21. Share having preferential right as to dividend and repayment of capital
are termed as equity share capital.
Answer- True
22. Shares which are not preference shares are called equity shares.
Answer- True
23. The amount of share premium received by the company is shown under
the heading reserves & surplus in the companys balance sheet.
Answer- True
24. Debenture holders are not the member of the company.
Answer- True
25. There are no legal restrictions, similar to shares, for issue of debentures
at discount.
Answer- True
26. Fixed cost per unit remains constant.
Answer- False
27. Direct cost is that cost which can not be easily allocated to cost units.
Answer- False
28. Selling overheads form a part of cost of production.
Answer- False
29. Manufacturing and administrative overheads are different.
Answer- False
30. Total fixed cost remains unaffected by the change in volume of output.
Answer- False
31. Variable cost per unit remains fixed.
Answer- True
32. In chemical industries unit costing is used.
Answer- True
33. The output of a process is transferred to next process.
Answer- True
34. Good units bear the abnormal loss arising in the process costing.
Answer- True
35. Excess of pre-estimated loss over actual loss is known as abnormal loss.
Answer- True
36. Marginal costing is a method of ascertaining cost.
Answer- True
37. A firm earns no profit or incurs no loss at BEP.
Answer- True
38. Margin of Safety implies Break Even Point.
Answer- True
39. In marginal costing, stock is valued at fixed costs.
Answer- True
40. Sales below BEP mean profit.
Answer- False