Reference no: EM132238790
Assignment -
Problem 1 - A company engaged in hotel business and has given the following transactions which have taken place during the year:
Sales for the year RO 5,00,000, Food & beverages expenses RO 2,50,000, Electricity & water expenses RO 10,000, Washing & cleaning expenses RO 25,000, Uniform expenses RO 20,000, Laundry expenses RO 12,000, Audit fees RO 3,000, Purchase of Refrigerator RO 2,25,000, crockery expenses RO 5,000.
Calculate profit /loss for the year. Also explain the Capex and Opex involved in the year.
Preparation of Profit & Loss Account & Balance together
Now we can prepare Profit & Loss Account and Balance sheet both together for a particular business.
Problem 2 - Mr. Anand after completing his MBA, started his own trading in furniture business under the name Anand Plywoods Private Limited. Company issued 50,000 equity shares of RO 1 each where Mr. Anand and his wife are holding 25,000 equity shares each.
Company purchased a plot of RO 27,500 and constructed a shed/warehouse of RO 7,500. During the year company approached a bank and has taken a loan of RO 50,000 @ 6% interest.
Sale for the year are RO 2,00,000 where company received all the money from the customers and following expenses were incurred and paid.
Purchase of furniture stock RO 1,55,000, Employee cost RO 12,000, Electricity expenses RO 1,000, Advertisement RO 4,500 and delivery expenses RO 1,500.
During the year company paid RO 7,500 to the bank through installments out of which interest amount was RO 5,000 and principle Loan repayment RO 2,500.
1. Explain the capital expenditure and revenue expenditure involved in the first year of business.
2. Explain the capital receipts and revenue receipts which are involved in the first year.
3. Prepare Profit & Loss Account and Balance sheet of the company. Ignore depreciation and tax.
Problem 3 - A manufacturing company started its activities in April, 2017 by issuing 20,000 equity shares of RO 1 each. Company has also issued 1000, secured Debentures of the face value of RO 10 each with 7% interest and maturity of 10 years.
There was sudden change in the project cost and further RO 10,000 was required. Mr. Deepak, who is promoter and majority equity shareholder, invested further RO 10,000 by way of preference shares and company issued 1,000 Preference shares of RO 10 each to him where rate of dividend decided at 10% and maturity period of 5 years.
Company has invested RO 1,80,00 in tangible fixed assets and RO 2,000 in intangible fixed assets such as software.
During the year, Company has also invested RO 2,000 in shares of Bandhan Bank Limited on short term basis.
Company has purchased raw material of RO 1,25,00 out of which company has not yet paid RO 2,500 to the suppliers. Employee cost RO 12,00 and other operating expenses such as repairs & maintenance, power & fuel, electricity, travelling expenses, advertisement, sub contracting expenses are RO 38,00 which are fully paid.
During the year, company has achieved sales of RO 2,80,00 out of which, company has not yet receive RO 80,00 from customers.
At the end of the year, depreciation is charged @ 5% on tangible fixed assets and amortized intangible fixed assets @ 20%.
Raw material lying in stores on 31st March, 2017 was of RO 6,00.
At the end of the year, Company sold investment made in shares of Bhandan Bank at RO 27,00. Interest on Debentures of RO 700 is paid.
Dividend on Preference shares is also paid at agreed rate and dividend to equity shares holders paid at 10%.
Prepare Profit & Loss Account and Balance sheet for the first year of business assuming corporate tax paid at 15%.
Problem 4 - Mr. Satish and Mr. Narayan, after working for more than ten years in a software company started their own software development business under the name Infosys Technologies Private Limited. Both contributed RO 6,000 each towards equity share capital. Company started its activities on 1st July, 2017 and both started looking after the business as Directors of the company.
Company executed agreement with a owner of premises for 5 years and taken on rental basis an office and paid rent of RO 1,400. Company also paid RO 1,000 as deposit for the premises.
Company purchases computers & servers of RO 2,800 and furniture of RO 1,000. Employee Benefit expense paid RO 7,000, Sub contracting charges RO 800, sales and marketing expenses RO 3,500 and administration expenses paid for the year were RO 1,300.
During the year company has purchased Debentures of Tata Motors Ltd of RO 5,000 at 8% interest.
During the year company completed eight different fixed price contracts of RO 20,000 and received RO 16,000 from customers till 31st March. Balance amount is receivable in April, 2018.
At the end of the year on 31st March, 2018, the accountant informed them
1. Rent paid RO 1,400 includes RO 500 for the next year.
2. Interest accrued on Debentures but not received (for 9 months.) is RO 300.
3. Salary of RO 1,000 for the month of March is not yet paid.
4. On 31st March, one customer has paid RO 1,200 as an advance against his work order.
5. Depreciation of RO 560 is to be charged on computers.
6. Corporate tax paid at 15%.
Prepare Profit & Loss Account and Balance sheet of the company.
Problem 5 - Following Balance sheet of a manufacturing company is available as on 31st March, 2017
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Assets
|
Amount
|
|
Property, Plant & Equipment
|
30,000
|
|
Less : Depreciation
|
6,000
|
|
Net Fixed Assets
|
24,000
|
|
Intangible Assets
|
|
|
Software
|
4,000
|
|
Non-Current Investments
|
14,000
|
|
Current Assets
|
|
|
Inventory/Stock
|
8,500
|
|
Trade Receivables
|
5,000
|
|
Cash at Bank
|
3,500
|
|
Total
|
59,000
|
|
Equity & Liabilities
|
Amount
|
|
Equity Capital (25,000 equity shares of RO 1 each)
|
25,000
|
|
Other Equity
|
|
|
General Reserve
|
12,000
|
|
Profit & Loss Account
|
6,000
|
|
Non-Current Liabilities
|
|
|
10% Debentures
|
8,000
|
|
Current Liabilities
|
|
|
Trade Payables
|
7,000
|
|
Short term provisions
|
|
|
Provision for tax
|
1,000
|
|
Total
|
59,000
|
During the year Company has achieved sales of RO 6,00,000 (out of which sales of RO 30,000 in the month of March, amount not yet received from customer). Purchase of Material RO 3,50,000 (amount not yet paid RO 40,000), Employee cost RO 25,000, Purchase of stock in trade RO 15,000. Power & Fuel RO 16,000, Repairs & Maintenance RO 4,000, Excise duty RO 32,000, Administration expenses RO 18,000 and Sales & Marketing expenses RO 47,000.
In the month of October, Company has issued fresh 5,000 equity shares of RO 1 each at a premium of RO 1 and repaid the debentures along with interest of RO 8,000.
Charged depreciation @ 10% on the tangible fixed assets and amortized RO 10,000 from software. Interest on debentures is paid for six months. Provision for tax is to be made @ 15% of the profits. Raw material lying in stores at the end of the year is RO 11,000.
Prepare Profit & Loss Account and Balance Sheet as on 31st March, 2017 assuming that previous year's Trade payables are paid in this year and previous year's Trade receivables arc received in this year. Previous year's tax is paid in this year.
Problem 6 - Mr. Sohel is having business of readymade garments under the name Sohel Garments Private Limited. He was going through the records of the company and found the following transactions for the first year which ended on 31st March, 2017
1. Introduced RO 50,000 as Equity Capital (5,000 Equity shares of the face value of RO 1 each).
2. Purchase of premises for the shop of RO 26,000.
3. Material purchased on cash basis RO 10,000.
4. Salary paid to staff RO 2,400.
5. Cash Sales RO 18,000.
6. Material purchased on credit RO 20,000.
7. Credit sales RO 24,000.
8. Interest free Loan taken from group company RO 1,000.
9. Telephone, Electricity bill paid for the shop RO 120.
On 31st March, his accountant informed him that salary for the month of March of RO 120 to staff is not yet paid and material costing RO 800 is still lying in the shop on 31st March, 2018.
Prepare the Income statement and Balance sheet of the company and also discuss the Generally Accepted Accounting Principles followed by the company.
Problem 7 - Neha and Priya have started a beauty parlor under a private company named Neha Beauty Parlor Private Limited by introducing equity capital of RO 12,000. Both started looking after the business as directors of the company. Along with parlor service, company has decided to keep cosmetic products for sale. Company has taken a shop cum office on rental basis. Company has also spent RO 4,000 on furniture and other equipments for the business.
During the year company has incurred and paid for the following:
Purchase of cosmetic material RO 2,500, Rent RO 3,600, Electricity and water RO 500, Creams and powder RO 400, Magazines and news papers RO 200, salary RO 2,000, telephone expenses RO 200 and advertisement RO 800. Depreciation charged on furniture and equipments @ 10% p.a.
During the year, company has generated income of RO 8,000 through parlor services and RO, 3,000 through selling of cosmetic products. Corporate Tax is @ 15%.
Neha is claiming that since sufficient funds are available in the bank at the end of the year, Board should recommend dividend of RO 1,200 (10% on Capital). Advice the company by preparing Statement of Profit & Loss and Balance sheet for the first year.
Problem 8 - Oman Industries Limited started its manufacturing unit in April, 2017. The initial capital consist of Equity share capital of RO 70,000 and 10% Preference share capital of RO 30,000. Company had to spend RO 4,000 for formation expenses. During the year company approached Bank of Oman for a Term loan of RO 50,000. Loan was sanctioned at 6% interest. The installment towards principal amount will due from second year.
During the year Company purchased premises for its factory and office costing RO 80,000 and purchased and installed machinery of RO 50,000. Furniture of RO 10,000 was also purchased. During the year, Management has decided to charge depreciation on all feted assets at 10% on straight line method. Company invested RO 7,500 in Government securities.
During first year company achieved a turnover of RO 3,00,000 out of which sales of RO 40,000 amount is not yet received from the customers. Following are expenses incurred during the year.
Purchase of Material RO 1,60,000 (amount of RO 5,000 not yet paid to the supplier), Employee cost RO 50,000, power & fuel RO 12,000, Repairs & maintenance RO 8,000, office expenses RO 5500, Selling expenses RO 17,500, Audit fees RO 500 and other miscellaneous expenses RO 3,500. All expenses are paid in full, except creditors for goods. Tax paid @ 15%. Raw material lying in stores at the end of the year is RO 7,500.
Prepare Profit & Loss Account and Balance sheet of the company in horizontal as well as in vertical format.
Problem 9 - Following Balance sheet of a manufacturing company is available as on 31st March, 2017.
|
Assets
|
|
|
Non Current assets
|
|
|
Property Plant & Equipments
|
30,00,000
|
|
Less : Depreciation
|
6,00,000
|
|
Net Block
|
24,00,000
|
|
Intangible Assets
|
|
|
Software
|
3,50,000
|
|
Goodwill
|
2,50,000
|
|
Financial Assets
|
|
|
Investments
|
12,00,000
|
|
Current Assets
|
|
|
Stock of Raw Material
|
2,00,000
|
|
Stock of WIP
|
60,000
|
|
Stock of finished goods
|
90,000
|
|
Trade Receivables
|
2,00,000
|
|
Cash at Bank
|
3,50,000
|
|
Total
|
51,00,000
|
|
Equity & Liabilities
|
Amount
|
|
Equity Capital
|
25,00,000
|
|
Other Equity
|
|
|
General Reserve
|
8,50,000
|
|
Profit & Loss Account
|
6,00,000
|
|
Non-Current Liabilities
|
|
|
10% Debentures
|
8,00,000
|
|
Current Liabilities
|
|
|
Trade Payables
|
2,00,000
|
|
Short term provisions
|
|
|
Provision for tax
|
1,50,000
|
|
Total
|
51,00,000
|
During the year Company has achieved sales of RO 60,00,000 (out of which sales of RO 3,00,000 in the month of march amount not yet received from customer). Purchase of Material RO 35,00,000 (amount not yet paid RO 4,00,000), Other operating expenses fully paid are RO 12,50,000.
During the year company has issued fresh 50,000 equity shares of RO 1 each at a premium of RO 1 and repaid the debentures RO 8,00,000 along with interest of RO 80,000.
Charged depreciation @ 10% on the tangible fixed assets and provision for tax @ 15% of the profits. Raw material lying in stores at the end of the year is RO 1,40,000. Stock of WIP RO 70,000 and stock of FG RO 1,00,000.
Prepare Profit & Loss Account and Balance Sheet as on 31st Mach, 2018 assuming that previous years Trade payables are paid in this year and previous years Trade receivables are received in this year. Previous year's tax is paid in this year.