FIN621 Assignment No. 2 Idea Solution
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FIN621 Assignment No. 2 Idea Solution
by good luck Sun Jun 12, 2011 8:13 am
Semester “Spring 2011”
“Finanacial Statement Analysis (FIN621)”
Assignment No. 02 Marks: 15
“Finanacial Statement Analysis (FIN621)”
Assignment No. 02 Marks: 15
Question:
In the beginning of year 2010 Mr. Nauman, Mr. Ali and their other friends organized a company “Printing Solutions (PVT) Ltd”. to start a business of printing press. The company was authorized to issue 100,000 shares having par value of Rs. 10 each and 50,000 shares of 10% cumulative preferred shares having par value of Rs. 100 each. Following are the transaction occurred during the year 2010.
1. Issued 50% of shares of common stock for cash at Rs. 15 per share to Mr. Nauman and other investors of the company.
2. Issued 1,000 shares of common stock to Mr. Ali for his initial services offered for the incorporation of the company. Total initial expenses were incurred Rs. 14,000.
3. Issued 3,000 preferred shares for Rs. 300,000 for cash.
4. Purchased printing machinery from Mr. Nauman in exchange for 10,000 shares of common stock. The cost of the machinery was Rs. 150,000.
5. Paid cash dividend on preferred stock.
6. The company earned 120,000 Net Income during the year 2010.
Instructions:
1. Prepare the stock holder equity section of the Balance sheet as on 31st December 2010 of Security solutions (PVT) Ltd.
2. Prepare journal entries for the above transactions.
Schedule
Opening Date and Time June 09, 2011 At 12:01 A.M. (Mid-Night)
Due Date and Time June 15 , 2011 At 11:59 P.M. (Mid-Night)
good luck- Monstars
- Posts : 29
Join date : 2011-02-11
Re: FIN621 Assignment No. 2 Idea Solution
by good luck Tue Jun 14, 2011 9:44 pm
Idea Solution:
1)
Cash/Bank 750,000
To share capital 500,000
To share premium 250,000
(Issuance of common shares at premium)
2)
Preliminary expenses 14,000
To share capital 10,000
To share premium 4,000
(Paid to Mr.Ali 1,000 shares of common stock in consideration of initial services)
3)
Cash/Bank 300,000
To share capital(preferred) 300,000
(issued 3,000 shares of preferred stock at par)
4)
Printing machinery 150,000
To share capital 100,000
To share premium 50,000
(issued 10,000 shares of common stock in consideration of printing machinery)
5)
Income summary 30,000
To Dividend 30,000
(Declaration of dividend)
Dividend 30,000
To Cash/Bank 30,000
(Paid dividend in cash)
6)
Income summary 120,000
To retained earnings 120,000
(Earned profit of Rs.120,000)
HERE IS THE SOLUTION OF PART B
1)
Cash/Bank 750,000
To share capital 500,000
To share premium 250,000
(Issuance of common shares at premium)
2)
Preliminary expenses 14,000
To share capital 10,000
To share premium 4,000
(Paid to Mr.Ali 1,000 shares of common stock in consideration of initial services)
3)
Cash/Bank 300,000
To share capital(preferred) 300,000
(issued 3,000 shares of preferred stock at par)
4)
Printing machinery 150,000
To share capital 100,000
To share premium 50,000
(issued 10,000 shares of common stock in consideration of printing machinery)
5)
Income summary 30,000
To Dividend 30,000
(Declaration of dividend)
Dividend 30,000
To Cash/Bank 30,000
(Paid dividend in cash)
6)
Income summary 120,000
To retained earnings 120,000
(Earned profit of Rs.120,000)
[You must be registered and logged in to see this image.]
1)
Cash/Bank 750,000
To share capital 500,000
To share premium 250,000
(Issuance of common shares at premium)
2)
Preliminary expenses 14,000
To share capital 10,000
To share premium 4,000
(Paid to Mr.Ali 1,000 shares of common stock in consideration of initial services)
3)
Cash/Bank 300,000
To share capital(preferred) 300,000
(issued 3,000 shares of preferred stock at par)
4)
Printing machinery 150,000
To share capital 100,000
To share premium 50,000
(issued 10,000 shares of common stock in consideration of printing machinery)
5)
Income summary 30,000
To Dividend 30,000
(Declaration of dividend)
Dividend 30,000
To Cash/Bank 30,000
(Paid dividend in cash)
6)
Income summary 120,000
To retained earnings 120,000
(Earned profit of Rs.120,000)
HERE IS THE SOLUTION OF PART B
1)
Cash/Bank 750,000
To share capital 500,000
To share premium 250,000
(Issuance of common shares at premium)
2)
Preliminary expenses 14,000
To share capital 10,000
To share premium 4,000
(Paid to Mr.Ali 1,000 shares of common stock in consideration of initial services)
3)
Cash/Bank 300,000
To share capital(preferred) 300,000
(issued 3,000 shares of preferred stock at par)
4)
Printing machinery 150,000
To share capital 100,000
To share premium 50,000
(issued 10,000 shares of common stock in consideration of printing machinery)
5)
Income summary 30,000
To Dividend 30,000
(Declaration of dividend)
Dividend 30,000
To Cash/Bank 30,000
(Paid dividend in cash)
6)
Income summary 120,000
To retained earnings 120,000
(Earned profit of Rs.120,000)
[You must be registered and logged in to see this image.]
good luck- Monstars
- Posts : 29
Join date : 2011-02-11
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