MGT101 - Financial Accounting Assignment # 2 Solution and Discussion Spring 2013

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GMT + 3 Hours MGT101 - Financial Accounting Assignment # 2 Solution and Discussion Spring 2013

Post by Victoria333 on Sat Jun 22, 2013 1:56 pm

A company, whose accounting year is calendar year, purchased machinery inclusive of installation charges amounting to Rs. 250,000 on 1st January 2008.
On 1
st October 2012, the machinery has become obsolete and is sold for Rs. 60,140.
Company charged the deprecation @20% per annum on plant and machinery. It is the policy of the company to charge the deprecation of all fixed assets on the basis of use under diminishing balance method.
Required:
1. Prepare depreciation schedule for five years showing the four columns i.e. Years, Depreciation expense, Accumulated depreciation and Book value.
2. Calculate the profit or loss on disposal of machinery.
QUESTION-02
Required:
Based on the above information, you are required to calculate the following for the period ended on 31
st December 2012:
1. Net sales
2. Gross purchases
3. Administration expenses
4. Financial expenses
5. Current assets
6. Current liabilities
Following information is available of a business concern for the yearof 2012.
ItemsRs.
Gross sales
900,000
Return inwards
50,000
Return outwards
40,000
Net purchases
950,000
Gross loss
200,000
Advertising expenses
200,000
Distribution expenses
100,000
Salaries of clerical staff
300,000
Office rent
250,000
Bank charges
50,000
Long term loan taken from bank on 1
st January @ 12% per annum
500,000
Cash
90,000
Accounts receivable
60,000
Plant and machinery
300,000
Building
900,000
Accounts payable
35,000
Short term borrowings
25,000
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GMT + 3 Hours Re: MGT101 - Financial Accounting Assignment # 2 Solution and Discussion Spring 2013

Post by Victoria333 on Sat Jun 22, 2013 1:58 pm

Solution Q # 1
     
Year Costdepreciation acc depreciation        book value 
 5000050000200000 
 4000090000160000 
 32000122000128000 
 25600147600102400 
 1536016296087040 
 
                                                                                      250000
1st                50000                     50000                             200000
2nd              40000                        90000                           160000
3rd                32000                      122000                         128000
4th                25600                      147600                         102400
5th                15360                      162960                         87040
note =  5ht year dep caculated in 9/12 like that
102400*9/12*20/100=15360
book value = 87040
sale price = 60140
loss = 26900 (87040-60140)
 
 
Q.2
(1) Net sale
net sale=gross sale -return inward
=900000-50000
=850000
(2)gross purchases
gross purchases=net purchases return outward
=950000+40000
=990000
(3)administration expenses
admin expense=salaries of clerical staff + office rent
=300000+250000
=550000
(4)financial expense
interest on bank loan 12%+bank charges
=50000+60000
=110000
(5)current assets
cash +account receivable
=90000+60000
=150000
(6)current liabilities
account payable +short term borrowing+interst on bank loan
=35000+25000+60000
=120000



SEMESTER SPRING 2013
FINANCIAL ACCOUNTING (MGT101)
ASSIGNMENT NO – 02
Asad Azeem (mc130200467)
 
 
QUESTION-1

  • Prepare depreciation schedule for five years showing the four columns i.e. Years, Depreciation expense, Accumulated depreciation and Book value.

Years
Depreciation expense
Accumulated depreciation
Book value.
01-January-2008
  
250,000
31-December-2008
50,000
50,000
200,000
31-December-2009
40,000
90,000
160,000
31-December-2010
32,000
122,000
128,000
31-December-2011
25,600
147,600
102,400
31-December-2012
15,360
162,960
87,040
 

  • Calculate the profit or loss on disposal of machinery.

 
 
Book value after five years Rs. 87,040
Sale price Rs. 60,140
Profit on sale Rs. 26,900(87,040– 60,140)
 
 
 
 
 
 
 
 
 
 
 
QUESTION-2

  1. 1.      Net sales:

=Sales-Sales Return
=900,000 - 50,000
=850,000

  1. 2.      Gross purchases:

=Net Purchase + Purchase Return
=950,000 + 40,000
=990,000

  1. 3.      Administration expenses:

=Salaries of clerical staff+ Office rent
=300,000 + 250,000
=550,000

  1. 4.      Financial expenses:

= Long term loan taken from bank on 1st January @ 12% per annum + Bank charges
=60,000 + 50,000
=110,000

  1. 5.      Current Assets:

=Cash + Accounts Receivable
=90,000 + 60,000
=150,000

  1. 6.      Current liabilities:

=Loan (Long Term + Short Term) + Accounts Payable
= 465,000(440,000+25,000) +35,000
=500,000


Q.2

(1) Net sale
net sale=gross sale -return inward
=900000-50000
=850000
(2)gross purchases
gross purchases=net purchases return outward
=950000+40000
=990000
(3)administration expenses
admin expense=salaries of clerical staff + office rent
=300000+250000
=550000
(4)financial expense
interest on bank loan 12%+bank charges
=50000+60000
=110000
(5)current assets
cash +account receivable
=90000+60000
=150000
(6)current liabilities
account payable +short term borrowing+interst on bank loan
=35000+25000+60000
=120000
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