Friday, January 16, 2015
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Join Date: Oct 2014
Location: Islamabad
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Quote:
Originally Posted by Tariq Haroon
ACCOUNTING AND AUDITING
CSS PAPER-2014
Solution Presented By: Muhammad Tariq
Solution –Q-2
PROFIT & LOSS A/C SUN COMPANY LTD ON 31.12.2013
PARTICILAR AMOUNT IN RS. PARTICILAR AMOUNT IN RS.
Opening Stock 50000 Sales 300000
Purchases 160000 Closing Stock 65000
Purchases Returns (1000)
Carriage in 4000
Gross Profit 152000 Gross Profit 152000
Salaries 45000 Discount Received 1500
Depreciation 39750 Bad Debts Recovered (Other Income) 500
Rent 34800
Director’s Fee 9000
Trade Expenses 9000
Bad Debts 2000+2500 4500
Interest on loan 4500+500 5000
Profit for the year before Tax 6950
TOTAL 154000 TOTAL 154000
PROFIT & LOSS APPROPRIATION A/C SUN COMPANY LTD ON 31.12.2013
PARTICILAR AMOUNT IN RS. PARTICILAR AMOUNT IN RS.
Dividend Paid 4500 Profit and Loss Balance Carried Forward 35000
Income Tax Provision 10000 Profit for the year 6950
Profit after appropriation 27450
TOTAL 41950 TOTAL 41950
BALANCE SHEET SUN COMPANY LTD ON 31.12.2013
PARTICILAR AMOUNT IN RS. PARTICILAR AMOUNT IN RS.
FIXED ASSETS CAPITAL & RESERVES
Furniture 15000-2250 12750 Share Capital 500000
Machinery 300000-27500 272500 Profit for the year 27450
Premises 200000-10000 190000 General Reserves 30000
CURRENT ASSETS CURRENT LIABILITIES
Bills Receivables 21000 Salary Payables 2500
Prepaid Insurance 1500 Interest on Bank loan Payable 500
Investment at book value 20000 Income Tax Payable 10000
Sundry Debtors 60000-12000 48000 Sundry Creditors 20000
Cash at Bank 9700 LONG TERM LIABILITIES
Stock 65000 10% Bank Loan 50000
TOTAL 640450 TOTAL 640450
Solution –Q-3
Current Ratio 140000/60000 2.33
Acid Test Ratio 100000/60000 1.67
Debt Equity Ratio 200000/200000 1.00
Gross Profit Ratio 84000/600000 14 %
Operating Ratio 551600/600000 (N-01) 91.93%
Note-01: CGS + Admin Exp + Selling Exp
516000+35600=551600
It can also be calculated as follows:
GP-NP= 84000-40000 = 44000
44000-8400* =35600
Markup on debenture/ Interest expense
* 6% X 140000 =8400
Solution –Q-5
REVALUATION A/C ON 31.12.2013
PARTICILAR DR.
RS. PARTICILAR CR.
RS.
Bad Debts 1000 Land & Building 6000
Balance brought down
Share of A 2800
Share of B 2800
Share of C 1400
7000 Stocks 2000
TOTAL 8000 TOTAL 8000
CAPITAL A/C OF MR. A ON 31.12.2013
PARTICILAR DR.
RS. PARTICILAR CR.
RS.
Opening Balance 24000
Share from Reserve A/C 800
Share from Good-Will 4000
Share from Revaluation A/C 2800
Balance Carried Forward 45600 Cash Bring by Mr. A 14000
TOTAL 45600 TOTAL 45600
CAPITAL A/C OF MR. B ON 31.12.2013
PARTICILAR DR.
RS. PARTICILAR CR.
RS.
Opening Balance 16000
Share from Reserve A/C 800
Share from Good-Will 4000
Share from Revaluation A/C 2800
Balance Carried Forward 30400 Cash Bring by Mr. B 6800
TOTAL 30400 TOTAL 30400
CAPITAL A/C OF MR. C ON 31.12.2013
PARTICILAR DR.
RS. PARTICILAR CR.
RS.
Opening Balance 12000
Share from Reserve A/C 400
Share from Good-Will 2000
Share from Revaluation A/C 1400
Balance paid by cash 15800
TOTAL 15800 TOTAL 15800
BANK A/C ON 31.12.2013
PARTICILAR DR.
RS. PARTICILAR CR.
RS.
Opening Balance 10000 Paid to Mr. C 15800
Cash brought by Mr. A 14000
Cash brought by Mr. A 6800
Closing Balance C/ Forward 15000
TOTAL 30800 TOTAL 30800
BALANCE SHEET SUN COMPANY LTD ON 31.12.2013
PARTICILAR AMOUNT IN RS. PARTICILAR AMOUNT IN RS.
FIXED ASSETS CAPITAL & RESERVES
Land & Building 36000 Capital
Share of A 45600
Share of B 30400 76000
Good Will 10000
CURRENT ASSETS CURRENT LIABILITIES
Stocks 12000 Sundry Creditors 10000
Bills Receivables 4000
Sundry Debtors 9000
Cash at Bank 15000
TOTAL 86000 TOTAL 86000
Solution –Q-6
MACHINERY A/C ON 31.12.2011
PARTICILAR DR.
RS. PARTICILAR CR.
RS.
Opening balance Machine-1 12150 Dep. for the year on Machine-1 1215
New Machine Purchased 500000 Dep. for the year on Machine-2 50000
Balance C/ Forward Machine-1 10935
Balance C/ Forward Machine-2 450000
TOTAL 512150 TOTAL 512150
MACHINERY A/C ON 31.12.2012
PARTICILAR DR.
RS. PARTICILAR CR.
RS.
Opening balance Machine-1 10935 Dep. for the year on Machine-1 1094
Opening balance Machine-2 450000 Dep. for the year on Machine-2 45000
Balance C/ Forward Machine-1 405000
Balance C/ Forward Machine-2 9841
TOTAL 460935 TOTAL 460935
On Jan-01-2013 the balance of Machine-1 was Rs. 9841
Depreciation up-to 30.06.2013 (N-1) Rs. - 608
Book Value on 01.07.2013 Rs. 9233
Sold for Rs. -8400
Loss on sale of Machine-1 Rs. 833
MACHINERY A/C ON 31.12.2013
PARTICILAR DR.
RS. PARTICILAR CR.
RS.
Opening balance Machine-1 9841 Dep. for the year on Machine-1 up-to 30.06.2013 608
Opening balance Machine-2 405000 Dep. for the year on Machine-2 (Note-2) 50000
Cash received on disposal of Machine-1 8400
Profit/Loss A/c 833
Balance C/ Forward Machine-2 355000
TOTAL 414841 TOTAL 414841
Note-01: as the cost of initial balance of machine is not given; we assume that the balance on 01.01.2011 as a cost of machine-01.
12150 X 10% X 6/12=608
Note-02: cost of Machine-02 was 500,000 and depreciation on it for 2013 is 10% of 500,000 that is Rs.50,000.
Solution –Q-7
CREDITORS A/C ON 31.12.2013
PARTICILAR DR.
RS. PARTICILAR CR.
RS.
Payments to creditors 100000 Opening Balance NIL
Closing Balance 120000 Credit Purchases 220000
TOTAL 220000 TOTAL 220000
DEBTORS A/C ON 31.12.2013
PARTICILAR DR.
RS. PARTICILAR CR.
RS.
Opening Balance NIL Receipt from Debtors 140000
Credit Sales 250000 Closing Balance 110000
TOTAL 250000 TOTAL 250000
PROFIT & LOSS A/C OF HASSAN ON 31.12.2013
PARTICILAR AMOUNT IN RS. PARTICILAR AMOUNT IN RS.
Opening Stock Nil Total Sales 42000+250000 292000
Total Purchases 56000+220000 2760000 Closing Stock 20000
Expenses 22000
Gross Profit 14000 Gross Profit 14000
Depreciation on motor cycle 6000
Profit for the year 8000
TOTAL 14000 TOTAL 14000
CASH AT BANK A/C ON 31.12.2013
PARTICILAR DR.
RS. PARTICILAR CR.
RS.
Opening Balance Purchase of Motor Cycle 60000
Capital 90000 Payments to creditors 100000
Cash Sales 42000 Cash Purchases 56000
Receipt from Debtors 140000 Expenses Paid 22000
Closing Balance 24000
TOTAL 272000 TOTAL 272000
BALANCE SHEET OF HASSAN ON 31.12.2013
PARTICILAR AMOUNT IN RS. PARTICILAR AMOUNT IN RS.
FIXED ASSETS CAPITAL & RESERVES
Motor Cycle 60000-6000 54000 Capital A/C 90000
Less Drawings -10000
Add P/L A/C +8000
88000
CURRENT ASSETS CURRENT LIABILITIES
Stocks 20000 Sundry Creditors 120000
Debtors/ Receivables 110000
Cash at Bank 24000
TOTAL 208000 TOTAL 208000
Solution –Q-8
Direct income
Markup earned 35000
Direct expenses
Markup expensed (37000)
Gross Loss (2000)
Indirect Income
Income from dealing in foreign currency 4500
Commission, exchange and brokerage 1200
Non-mark-up income 19000
Other income 22000
Gain on sale of securities 13000
Dividend income 5400 65100
Income before indirect expenses 63100
Indirect Expenses
Administrative expenses 16000
Bad debts written off 5000
Other charges 4700
Provision for diminution in investment’s value 7000
Provision against non-performing loans 2500
Other provisions 200 35400
Income before Tax 27700
Income tax provision 1500
Net Income 26200
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For acid test ration you should deduct inventiry /stock from total current assets
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