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Q2. Write down a table with the accounts involved / the nature of
account/its affects/ debit or credit. Please have the transactions given
below and prepare the table as per the instructions given above for each
transaction.
a. 1.1.2011 Sunitha started his business with cash Rs. 5, 00,000
b. 2.1.2011 Borrowed from Malathi Rs. 5, 00,000
c. 2.1.2011 Purchased furniture Rs. 1, 00,000
Q3. The following items are found in the trial balance of M/s Sharada
Enterprise on 31st December, 2000.
Sundry Debtors Rs.160000
Bad Debts written off Rs 9000
Discount allowed to Debtors Rs. 1800
Reserve for Bad and doubtful Debts 31-12-1999 Rs. 16500
Reserve for discount on Debtors 31-12-1999 Rs. 3200
You are required to provide the bad and doubtful debts at 5% and for
discount on debtors at 2%. Show the adjustments for bad debts, bad debts
reserve, discount account, and provision for discount on debtors.
Hint: RBD to be provided = 500
Reserve for discount to be provided now =1640
Answer. The amount debited to P&L account towards RBD is computed as follows:
Old RBD
= Rs.16500
= Rs. 9000
Q4. The reports prepared in financial accounting are also used in the
management accounting. But there are few major differences between
financial accounting and management accounting. Explain the differences
Q5. Draw the Balance Sheet for the following information provided by
Sandeep Ltd.
a. Current Ratio: 2.50
b. Liquidity Ratio: 1.50
c. Net Working Capital: Rs.300000
d. Stock Turnover Ratio: 6 times
e. Ratio of Gross Profit to Sales: 20%
f. Fixed Asset Turnover Ratio: 2 times
g. Average Debt collection period: 2 months
h. Fixed Assets to Net Worth: 0.80
I. Reserve and Surplus to Capital: 0.50
Answer. Balance Sheet:
Liabilities
Rs.
Assets
Rs.
Capital
500000
Fixed Assets
600000
Q6. Write the main differences between cash flow analysis and fund flow
analysis.
Following is the balance sheet for the period ending 31st March 2011 and
2012. If the current years net loss is Rs.38, 000, Calculate the cash flow
from operating activities.
31st MARCH
2011
2012
15000
30000
1200
18000
15000
10000
800
300
18000
8000
20000
13000
22000
600
500
Answer. Differences:
1. A cash flow statement is merely a record of cash receipts and disbursements.
Of course, it is valuable in its own way but if fails to bring to light many
important changes involving the disposition of resources. While studying the
short-term solvency of a business one is interested not only in cash balance
but also in the assets
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