1. Q.1
ANI INITIATIVES
Dec-06
Sales 0
COGS 0
Gross Profit 0
S, G & A Exp 6350
EBITDA -6350
Dep
Exp -3316.6
EBIT -9666.6
Interest 0
PBT -9666.6
Tax 0
PAT -9666.6
Div 0
Surplus C/F to B/S -9666.6
Jan-07
Sales 0
COGS 0
Gross Profit 0
S, G & A Exp 2850
EBITDA -2850
Dep
Exp -3316.6
EBIT -6166.6
Interest 0
PBT -6166.6
Tax 0
PAT -6166.6
Div 0
Surplus C/F to B/S -6166.6

2. Feb-07
Sales 9500
COGS 0
Gross Profit 9500
S, G & A Exp 22550
EBITDA -13050
Dep
Exp -3316.6
-16366.
EBIT 6
Interest 0
-16366.
PBT 6
Tax 0
-16366.
PAT 6
Div 0
-16366.
Surplus C/F to B/S 6
Mar-07
Sales 26000
COGS 7700
Gross Profit 18300
S, G & A Exp 2850
EBITDA 15450
Dep
Exp -3316.6
EBIT 12133.4
Interest 0
PBT 12133.4
Tax 0
PAT 12133.4
Div 0
Surplus C/F to B/S 12133.4
Q.4
Balance Sheet of Kochi Oil Mills as of 31st December, 20X6
Assets Liabilites and Owners Equity

3. Current Assets Current Liabilities
Cash 768300 Accounts Payable 1382800
Accounts
Receivables 1621600 Wages Payable 650000
Inventory 1985000 Taxes Payable 850000
Prepaid Rent and Long term loans due
Insurance 100000 within the year 600000
Total 4474900 Total 3482800
Long term
Property, Plant and Machinery Liabilities
Freehold Land 2100000 Long term loans 5200000
Plant and Equipment 3926000
Less: Accumulated
Depreciation -3200000 Owner's Equity
726000 Owner's Capital 1000000
Goodwill - Retained Earnings -2381900
-1381900
Total Liabilities and Owners
Total Assets 7300900 Equity 7300900
Principles used in making the changes required
(a) Matching Principle and Realisation Concept: 14500 is deducted from cash
balances and retained earnings. 32800 is added to cash balances and retained
earnings.
(b) The invoices are raised at the time of the order and not the time of the delivery of
goods. So Realisation Concept is applied again to deduct 28400 from Accounts
receivable and Retained earnings.
(c) Conservatism principle - Inventory is revalued on the asset side, and the amount
of revaluation is deducted from retained earnings.
(d) Prepaid rents and insurance has been corrected to 100000. Accordingly, 60000 are
deducted from retained earnings. (Matching Concept)
(e) Since accumulated depreciation is correct, and cost of plant and machinery has
increased, the value in the balance sheet is an inflated figure. So we deduct
9,24,000 from Plant and Machinery and Retained Earnings. (Conservatism is
used in recording at historical cost).
(f) Prudence is used for this item – goodwill is removed form the asset side, and
deducted accordingly form retained earnings.
Q.8

4. BONG, HARRY & MALLU
PROFIT & LOSS AC FOR THE YEAR
PARTICULARS AMOUNT PARTICULARS AMOUNT
To Purchases 3,320.80BySales 4,800.00
" Wages & Other Operating Exp. 785.00 " Closing Inventory 256.50
" Gross profit 950.70
5,056.50 5,056.50
" Collection Losses 48.00ByGross profit 950.70
" Bad Debts 9.00
" Depreciation 243.96
" Net Profit transferred to Partners'
Capital Ac 649.74
950.70 950.70
BALANCE SHEET OF BONG, HARRY & MALLU
As on 31st December, 2016
Assets Amount Liabilities & Owner's Equity Amount
Current Assets: Current Liabilities:
Cash 2,768.29 Accounts Payable 368.00
Accounts Receivable 600.00 Promissory Notes 85.00
Inventory 256.50 Wages Payable 12.89
Total Current Assets 3,624.79 Total Current Liabilities 465.89
Property, Plant & Machinery: Owner's Equity
Delivery Van 1,284.00 Owner's Capital 3,600.00
Less:Accumulated Dep. 243.96 1,040.04 Retained Earnings 649.74
Less:Drawings 50.80 4,198.94
Total Assets 4,664.83 Total Liabilities & Owner's Equity 4,664.83