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24 4.docx

  1. 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. 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. 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. 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

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