MGT101 Financial Accounting Assigenment#1

MC090201542 Maqsoom Raza

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Trail Balance of Hyper star Traders
As, on 31 December 2009

Amount(Dr.) Amount(Cr.)
Particulars Rs. Particulars Rs.
Opening Stock 120,000 Bills Payable 20,000
Sundry Debtors 100,000 Return Outward 4,800
Long Term Investment 60,000 Sales 924,000
Return Inward 8,000 Interest Received 8,00
Purchases 680,000 Commission Received 2,000
Cash In Hand 4,000 Sundry Creditors 160,000
Bill Receivable 44,000 Capital 280,000
Carriage Out 3,600
Insurance Paid 2,800
Bank Balance 36,000
Salaries 48,000
Wage 45,200
Furniture 40,000
Plant 200,000
Total 1,391,600 Total 1,391,600

Fowling is the adjustment entries that have been taken into account while preparing
Income statement.
1. Stock on 31 December 2009 valued at Rs. 200,000
2. Accrued Bank Charges Rs. 1,50 and Interest on loan Rs.5,00
3. Accrued Dividends Receivable Rs. 2,000
4. Bad debits 5% on Sundry Debaters Rs.100,000
5. Paid Rent Rs.5,000 from Owner’s personal Account
6. Depreciation of Plant Rs. 40,000

Answer: A)
 Hyper Star Traders
Adjustment Entries
Entry # 1
Amount(Dr.) Amount(Cr.)
Particulars Rs. Rs
Closing Stock A/c 200,000
Profit and Loss A/c 200,000
Total 200,000 200,000
Closing Stock is Recorded

Entry # 2
Amount(Dr.) Amount(Cr.)
Particulars Rs. Rs.
Bank charges A/c 150
Accrued Bank charges A/c 1,50
Bank charges A/c 5,00
Accrued Interest on Loan A/c 500
Total 650 650
Adjustment entry for Bank Charges and interest loan Payables that recorded

Entry # 3
Amount(Dr.) Amount(Cr.)
Particulars Rs. Rs.
Accrued dividend A/c 2,000
Dividend Income A/c 2,000
Total 2,000 2,000
Adjustment entry for the accrued dividend Recorded

Entry # 4
Amount(Dr.) Amount(Cr.)
Particulars Rs. Rs.
Bad debts on Sundry debtors A/c 5,000
Sundry debtors A/c 5,000
Total 5,000 5,000
Adjustment entry for bad debts on sundry debtors (100,000*5% = 5000)

Entry # 5
Amount(Dr.) Amount(Cr.)
Particulars Rs. Rs.
House rent expense A/c 5,000
Capital A/c 5,000
Total 5,000 5,000
Adjustment entry for house rent paid from owners personal account

Entry # 6
Amount(Dr.) Amount(Cr.)
Particulars Rs. Rs.
Depreciation on plant A/c 40,000
Plant A/c 40,000
Total 40,000 40,000
Adjustment entry for depreciation of the plant is charged

Answer: B)
Net Sale - Cost of Good Sold= Gross Profit
Gross Profit -Operating Expenses= Operating Profit
Operating Profit + Other Income Received – Financial Expenses= Net
Profit
Hyper Star Traders
Income Statement
For The Year Ended
31 December,2009
Particulars Amount Rs. Amount Rs.
Sales 924,000
Return Inwards 8,000
Net Sales 916,000
Cost of Good Sold
Opening Stock 120,000
Purchases 680,000
Return Outwards (4,800)
Net Purchases 675,200
Wages 45,200
Cost of Goods Available for Sale 840,000
Closing Stock (200,000)
Cost of Good Sold (640,400)
Gross Profit 275,600
Administrative Expenses
Salaries 48,000
House Rent Paid 5,000
Insurances paid 2,800
Depreciation On Plant 40,000
Selling Expenses
Carriage Outward 3,600
Bad Debts on Sundry Debtors 5,000
Total operating Expenses (104,400)
Operating Income 171,200
Other Income Received
Dividends Received 2,000
Interest Received 8,00
Commission Received 2,000
Total Other Income Received 4,800
Net Operating Income 176,000
Financial Expenses
Bank Charges 1,50
Interest on Loan 5,00
Total Financial Expenses (6,50)
Net Profit 175,350
Net Profit Transferred to Balance sheet 175,350

Answer: C)
Assets= Liabilities+ Owner’s Equity
Hyper Star Traders,
Balance Sheet As At 31, December 2009
Particulars Amount Rs. Amount Rs.

Assets
Current Assets
Cash in Hand 4,000
Cash in Bank 36,000
Sundry Debtors 100,000
Bad Debts (5,000)
Net sundry Debaters 95,000
Bills Receivable 44,000
Dividends Receivable 2,000
Closing Stock 200,000
Total current Assets 381,000
Long Term Assets
Long Term Investment 60,000
Total Long Term Assets 60,000
Fix Assets
 Furniture 40,000
Plant 200,000
Depreciation OF Plant (40,000)
Net Written Down Value Of Plant 160,000
Total Long Term Assets 200,000
Total assets 641,000
Liabilities
Current Liabilities
Bills Payable 20,000
Bank Charges Payable 1,50
Bank Interest on Lone Payable 5,00
Sunday Creditors 160,000
Total Current Liabilities 180,650
Long Term and Fix Liabilities
Owner's Equity
Capital 280,000
Owner Paid Rent Add Equity 5,000
Net Owner's Equity 285,000
Add: Net Profit From P&L Account 175,350

Total Liabilities 641,000

Calculations:
Depreciation on plan: Plant value – depreciation = Net WDV of Plant
200,000 – 40,000 = 160,000
Bad Debater on Sundry Debaters:
100,000*5%=%5,000