Write short note on depreciation definition and concept

Assignment Help Financial Accounting

Reference no: EM131560434

FINANCIAL ACCOUNTING & COSTING

Instruction: All questions are compulsory.

Q1. Using the trial balance used below. Prepare the Trading. Profit and Loss account & Balance sheet for X and Y & CO for the month ended 30 March 2016.

	Dr		Cr
Purchase s.	61,000	Capital	85,500
Stock	7,000	Returns Outwards	2,500
Returns Inward	1,500	Sales	90,000
Duty on imported goods	5,000	Commission	1,000
Carriage on sales	2,000	Bills Payable	1,500
Office Salaries	2,500	Creditors	27,000
Wages	11,000
Drawings	4,000
Rent	3,000
Telephone Charges	5,000
Discount	1,000
an Balance	17,000
Debtors	25,000
Machinery	50,000
Depreciation on Machinery	2,500
Horses and Carts	10,000
	2,07,500		2,07,500

Stock on March 31 2016 was Rs. 10,500 /-

Q2. ADITHYA Infrastructure LTD is considering to develop diversification business. Company expects the cost of this diversification incurs to be Rs.450 Lakhs. The following are the estimated earnings of the diversified business for 5 years.

Year	1	2	3	4	5
Earnings in Lak Rs.	110	133	125	120	170

If the company expected minimum rate of return is 16%? Analyse the project based on

(i) Net Present Value

(ii) Internal Rate of Return ORR)

(iii) Profitability index Present value interest rates for 16% are given below.

Year	1	2	3	4	5
16%	0.862	0.743	0.641	0.552	0.476

b) Write short note on Depreciation definition and concept

Q3. a) Explain the following capital Investments Any Two
(i) shares (aa) Preference shares (ab) Ordinary
Shares (ac) Redeemable equity shires
(ii) Debentures and bonds
(iii) Mutual funds

b) Explain the components of working capital with detail

Q4. a) Southern Company sells several products. Information of average revenue and costs are as follows:

Selling price per unit	Rs.	1,400.00
Variable costs per unit:
Direct materials	Rs.	275
Direct manufacturing labor	Rs.	125
Dian ufacturin g ove mead	Rs	26.8
Selling costs	Rs.	140/-
Annual fixed costs	Rs.	64,60,000/-

1. Calculate the contribution margin per unit

2. Calculate the number of units Southern company must sell each year to break even.

3. Calculate the number of units southern company must sell to yield a profit of Rs.100,00,000/-

b) Write shod note on Break even analysis with graphical presentation

Q5. Explain the following balance sheet analysis ratios

a) Liquidity ratios (i) Current ratio (ii) Quick ratio

b) Profitability ratio (i) Profit margin (ii) Return on assets (iii) Return on Equity

c) Leverage ratio (I) Debt-Equity ratio

d) Activity ratio (i) Inventory turnover (ii) fixed asset turnover (iii) Total asset turnover

Q6. Write short notes on

a) Labour turnover

b) Standard Costing

c) Budgeting and its control Objectives

d) Batch costing

e) Economic order quantity

Reference no: EM131560434

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