Answers1:

StatementofCashflowsason31.12.2014
Particulars
Netincome
Add:CurrentLiability
Less:CurrentAssets
CashflowfromOperatingActivity
CashflowfromInvestingActivity
CashflowfromFinancingActivity
NetCashImpact
OpeningCashBalance
ClosingCashBalance

StatementofIncomeason
31.12.2014
Particulars
Salesfortheyear
Less:Expensesfortheyear
Add:OtherIncomefortheyear
Netincomefortheyear

BalanceSheetasat
31.03.2014
Assets

NonCurrentassets

Cashyearend

TotalAssets

Liabilities

StockholdersEquity
CurrentLiability
NCL

Amount
903944
833698
1039216
698426
242106
752815
296495
1335711
1039216

Amount
6484426
5580948
466
903944

Amount

5400410

1039216

6439626

Amount

3251559
833698
2354369

6439626

TotalLiabilities

Netincome
Add:DecreaseinCurrent
liability
Less:IncreaseinCurrentAssets

CashflowfromOperating
Actiivty

Balancin
gfigure

903944
833698
1,039,216

698426

Answer2:

Jan01
OpeningStock
Purchases
Purchases
Purchases
Closingstock

Units
Price
130
10
200
12
50
9
110
10.5
120

CostofGoodssold=Openingstock+Purchasesclosingstock
COGS=370
ThecalculationofClosingstockisasfollows:
UnderFIFOMethod
ClosingStock

TotalClosingStock

UnderLIFOMethod
ClosingStock

for10
90 unitsat$9

115 for110
5
unitsat
$10.5
124
5

For120
Unitsat
1200 $10

Answer3:
Particulars
Tradereceivables
Add:Allowances

2014
6,049
296

2013
6,377
323

GrossAmountofReceivables

6,345

6,700

GrossAmountofReceivables
(a)
Allowances(b)
Ratio(a/b)

6345
296
4.67%

6700
323
4.82%

Theallowancesratioisgettingbetterastherearelessbaddebtsforallowancesthoughthereisafallin
theamountofreceivables.
CommonSizeAccounts
receivables
Particulars
Tradereceivables
Add:Allowances

2014
6049
296

2013
6377
323

GrossAmountofReceivables(a)

6345

6700

37180

37121

5.85973207
2

5.54044776
1

Sales(b)

Ratio(b/a)

Thecommonsizeratioisdeterioratingaspertheabovecalculations.
Thequalityofthecompanyaccountsreceivablesistheyareilliquidtherealisationofmoneyfrom
debtorsareslowaspercomparedtothesalesamount.
Answer5:
Netincomeandcomprehensiveincomediffersasbecause
netincometakesintofactoralltheexpensesandanddoestakeintofactor
theextraordinaryitemsoritemsbelowtheline.
Comprehensiveincomemeanstheyrepresentthecorebusinessincomeafter
adjustingcertainfactorsandthenderivingthefinalvalue.

Foreigncurrencyadjustmentaffectsthecomprehensiveincomeinversely.
Iftheforeigncurrencyeffectisnegativeandrisingthenitwilldecreaseourcomprehensiveincome
Iftheforeigncurrencyeffectispositivethenitwillincreaseourcomprehensiveincome

DuringtheyearthevalueofdollarforJamesandBrainInchasfallenthatisthereasontheirisalossin
thecalculation.
Dollarhasfallenwhichleadstomoreamountpayableinforeigncurrencyandresultedinanegative
figure.

Answer4:

ThepurposeoftheAllowanceforloanandleaselossesistoreflectestimatedcreditlosseswithinthe
company'sportfolioofloansandleases.Estimatedofthesecreditlossesareestimatesofthecurrent
amountofloanthatareprobablethatthecompanywillbeunabletocollectgiventhefactsand
circumstancessincetheevaluationdate.
Progressivemanagerswilltrytoreservetomanageincomebyunderstatingtheallowanceforloans
andleaselossesandoverstatingtheincome.Sincetheyareprogressiveandtheywillnotconsiderthe
effectofsuchallowances.
Forexample
LoansandLeases
Less:OperatingLiabilityforLoansand
leases
NetLoansandLeases

100000

Asperratecalculatedbyhistoricaldata

10%

10000
90000

Theamountof10000willbeadjustedwiththereservesandtheNetstockholdersequitywillbelow.
Supposeiftherateis15or20%thentheamountoflossesismoreanfthenetimpactwillaffectthe
stockholdersequitymore.