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NMIMS Global Access
School for Continuing Education (NGA-SCE)
Course: Financial Accounting and Analysis
Internal Assignment Applicable for December 2015 Examination
Assignment Marks: 30
Question 1. The following is the Trial Balance of Mrs. Rashi as at 31st March, 2014. You are required to prepare the Profit & Loss Account and Balance Sheet as at that date. (Marks 15)
| Particulars
|
Debit(Rs)
|
Credit(Rs)
|
| Capital Account
|
8,000
|
|
| Plant & Machinery
|
10,000
|
|
| Office Furniture & Fittings
|
520
|
|
| Opening Stock
|
9,600
|
|
| Motor Vans
|
2,400
|
|
| Sundry Debtors
|
9,600
|
|
| Cash in hand
|
80
|
|
| Cash at Bank
|
1,300
|
| Wages : Factory
|
30,000
|
|
| Wages : Office
|
2,800
|
|
| Purchases
|
42,700
|
|
| Sales
|
96,000
|
|
| Bills Receivable
|
1,440
|
|
| Bills Payable
|
1,120
|
|
| Sundry Creditors
|
10,400
|
|
| Returns Inwards
|
1,860
|
|
| Provision for Doubtful Debts
|
500
|
|
| Drawings
|
1,400
|
|
| Return Outwards
|
1,100
|
|
| Rent
|
1,200
|
|
| Factory Lighting & Heating
|
160
|
|
| Telephone
|
70
|
|
| Insurance
|
60
|
|
| Advertising
|
1,130
|
|
| General Expenses
|
200
|
|
| Bad Debts
|
500
|
|
| Discount Allowed
|
840
|
|
| Discount Received
|
740
|
|
| TOTAL(Rs)
|
117,860
|
117,860
|
The following adjustments are to be made:
- Closing Stock Rs. 10,400
- Rent due but not paid upto 31st March 2014 Rs. 400
- Three months factory lightings & heatings are due but not paid Rs.60
- Insurance paid in advance Rs. 20
- Depreciate plant & machinery by 10%, furniture by 5% and motor vans by 25%.
- Write off further bad debts Rs.140 and increase the provision for doubtful debts by Rs. 600.Discounts @ 2 1/2% on debtors & creditors are to be anticipated.
Answer : In the books of Mrs. Rashi.
Profit & Loss Account
| Dr. | Cr. | ||||
| DATE | PARTICULARS | AMOUNT
(Rs) |
DATE | PARTICULARS | AMOUNT
(Rs) |
| To Opening stock | 9600 | By Sales 96000
Less: Ret Inward 1860 |
94140 | ||
| To Purchases 42700
Less: Ret Outward 1100 |
41600 | By Closing stock | 10400 | ||
| To Wages | 30000 |
Question 2 (Marks 15)
- a) What are the main aspects of Accounting Standard 1 (AS 1)
Answer: There are general rules and concepts that govern the field of accounting. These general rules–referred to as basic accounting principles and guidelines–form the groundwork on which more detailed, complicated, and legalistic accounting rules are based. For example, the Financial Accounting Standards Board (FASB) uses the basic accounting principles and guidelines as a basis for their own detailed and comprehensive set of accounting rules and standards.
- b) Calculate the net cash flow from financing activities based on the below data:
- Cash from issue of new equity shares – Rs.50,00,000
- Cash from issue of 12% debentures – Rs.30,00,000
- Interim dividend paid – Rs.10,00,000
- Buy-back of existing shares – Rs.15,00,000
- Repayment of long term loan – Rs.10,00,000
Answer:
| Cash flow from Financing Activities
Cash from issue of new equity shares Cash from issue of 12% Debentures Interim Dividend paid
|
50,00,000 30,00,000 (10,00,000) (3,60,000)
|
- c) Discuss in brief the treatment of following items in Cash Flow Statement as per AS-3.
- Taxes on Income
Taxes may be income tax (tax on normal profit), capital gains tax (tax on capital profits), dividend tax (tax on the amount distributed as dividend to shareholders).AS-3 requires that cash flows arising from taxes on income should be separately disclosed and should be classified as cash flows from operating activities unless they can be specifically identified with financing and investing activities. This clearly implies that:
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