Day 4: Issues For Discussion

Business Decsions and Financial S Do it yourself: Exercise 5 to 9 Reference:

http://accounting-ebook.com/main.php?

Financial Accounting by R_Narayanasw R

Day 4: Issues For Discussion Business Decsions and Financial Statements Do it yourself: Exercise 5 to 9 Reference:
http://accounting-ebook.com/main.php?opt=obj&chap=3 Financial Accounting by R_Narayanaswamy: Chapter 2 Ramana's Virtual Class_http://home2.ximb.ac.in/~ramana/VirtualClass/Financial_Statements.htm

Exercise 1 Started Business with on 1st April 50000 Issued 10% Bonds on 1st April 100000 Purchased stock of goods 80000 Purchased stock on credit 25000 Purchased shares of X lt 30000 Sold entire stock on credit to M ltd 350000 Availed 10% Loan on 1st October 200000 Salary per month 3000 Salary paid at the beginning of next month Used the money raised through loan to buy plant Depreciation on plant 20% Dividend distributed 50%

Balance Sheet

Sources

Assets

Balance Sheet

Income Statement

Cash Flow Statement

Incomes

Receipts

Expenses

Payments

Sold 60% stock for cash Collection from debtors Bad debt Depreciation for the year on cost Purchased stock for cash Payment to the creditor Discount given by the creditors Purchased Know-how for cash Amortised over (4 years) Dividend

300000 50% 10% 20% 85000 95% 5% 20000 4 45%

Balance Sheet Opening

Sources
Capital Reserves 12%Loan Creditors 50000 220000 100000 45000 415000 100000 -20000 150000 85000 100000 415000

Assets
Plant Less Accumulated Depreciation Stock Debtors Cash

Income Statement

Cash Flow Statement Opening

Incomes

Receipts Expenses Payments

sold entire stock on credit Collection from debtors Bad debt Depreciation for the year on cost Salaries Payment to the creditor Rent interest due but not paid

80000 50% 40% 20% 35000 20% 20000

Balance Sheet Opening Closing

Sources
Capital Reserves 12%Loan Creditors 50000 30000 100000 195000 375000

Sources
Plant 100000 Less Accumulated Depreciation -20000 Stock 50000 Debtors 85000 Cash 160000 375000

Income Statement

Cash Flow Statement Opening

Incomes

Receipts

Expenses

Payments

q1 Sold 30% of stock for cash Salary per month Rent per month Rent paid Dep per year q2 No sales

100,000 3,000 2,000 24,000 20%

Balance Sheet 1st April q1

Sources
Capital Reserves 12%Loan Creditors 50000 30000 100000 45000 225000

q3 Sold 50%of the stock 200,000 q4 Sold balance stock 85,000 Interest is paid in September and March

Assets
Plant 100000 Less Accumulated Depreciation -20000 Stock 150000 Debtors 85000 Cash 160000 475000

alance Sheet q2

q3

q4

q1

Income Statement q2 q3

q4

Incomes

Expense

q1

Cash Flow Statement q2 q3

q4

Receipts

Payments

Accounting Period

Started Business with Availed 10% Loan on 1st October Purchased stock of goods on credit Purchased stock on credit Purchased plant on credit from X Purchasd shares of Z ltd Sold entire stock on credit Rent paid ( Rent per month =5000) Salary paid ( per month =4000) Sold all shares Interest due but not paid Tax on profit

400000 300000 200000 80000 120000 120000 600000 0 0 145000 30%

Balance Sheet

Accounting Period =12 months Income Statement Cash Flow Statement

Transactions (000) for the Q1

A and B started Business with Cash A also give a laptop as his contribution Availed 12% loan (annual payment) purchased stock for cash Purchased stock on credit from X Purchased plant for cash Dep on laptop (annual)/Plant Expenses for the quarter not paid Sold 50% stock for cash

Balance Sheet 100,000 20,000 100,000 25,000 50,000 65,000 25% 20,000 100,000

Sources

Assets

alance Sheet q1

Income Statement Q1 Incomes

CFS Q1 Opening Receipts

Expenses Payments

CIH

Refer to question 6 for Q1

Transactions (000) for the Q2 Purchased more stock for cash Sold entire stock on credit Expense for the quarter Interest due but not paid Purchased stock on credit Depreciation on laptop dep on plant

Financial Statements for BS 50,000 ##### 20,000 80,000 25% 0 Sources

Plant

Financial Statements for Q2 BS q1 Q2 Incomes

IS Q2 Opening Receipts

CFS

Expenses

Payments 60937.5

Profit

CFS Q2 0

Financial Statements for

Transactions (000) for the Q3 No sales or purchases Expenses for the quarter (not paid) Balance Sheet 20,000 Sources Capital Loan X OS expenses OS interest Creditors Retained Profit 0 Assets Laptop Stock Plant CIH Debtors

Statements for Q3
Balance Sheet q1 Q2 Q3 Income Statement Q3 Incomes Sales 0 Expenses Payments CFS Q3 Opening Receipts 0

Profit

CIH

Transactions (000) for the Q4 Sold entire stock for cash Expenses for the quarter Expenses paid for the year Interest paid for the year Profit distributed as dividend

Balance Sheet 200,000 20,000 q1 Sources

30,000

327,188 Assets

327,188
0

Balance Sheet Q2 Q3

Q4

Income Statement Q4 Incomes

CFS Q4 Opening Receipts

Expenses Payments

489,375 484,063

0 CIH Profit 0 0

489,375 484,063
0 0

0
0