mgt101 - financial accounting- lecture 39
TRANSCRIPT
Financial Accounting
1
Lecture – 39
Solution
Beta (Private) Limited
Balance Sheet As At June 30, 2002
Particulars Note Amount Rs.
Fixed Assets at WDV 1Current Assets
492,330
DebtorsStock in TradeBank Balance
42,52548,63014,994
Current Liabilities106,149
CreditorsProposed Dividend
27,36015,000
42,360
Working Capital 63,789
Net Assets Employed 556,119
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Financial Accounting
2
Lecture – 39
Solution
Financed By:
Authorized Capital50,000 Shares of Rs. 10 each 500,000
Paid Up Capital30,000 Shares of Rs. 10 eachGeneral ReserveAccumulated Profit and Loss Account 2
300,0008,0008,119
Share Holders EquityDebentures
316,119240,000
Total 556,119
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Note: Slide 1 and 2 will be shown together and then zoomed one by one as done in earlier lectures.
Financial Accounting
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Lecture – 39
Note 1 – Fixed Assets at WDV
Particulars
Cost Rate Accumulated Depreciation WDV
As At
1-7-01
Addition/
Deletion
As At
30-6-02
As At
1-7-01
For The
Year
As At
30-6-02
As At
30-6-02
Land 120,000 0 120,000 0 0 0 0 120,000
Building 315,000 0 315,000 10 46,050 26,895 72,945 242,055
Furniture & Fixtures 34,500 0 34,500 10 11,250 2,325 13,575 20,925
Vehicles 187,500 0 187,500 10 66,000 12,150 78,150 109,350
TOTAL 657,000 0 657,000 123,300 41,370 164,670 492,330
Note: to be Zoomed in two parts as done in lecture 38
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Financial Accounting
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Lecture – 39
Calculation of Depreciation
Building 315,000 – 46,050 = 268,950 x 10% = 26,895
Furniture 34,500 – 11,250 = 23,250 x 10% = 2,325
Vehicles 750,000 – 0 = 750,000 x 10% = 75,000
Financial Accounting
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Lecture – 39
Note 2 – Accumulated Profit and Loss Acocount
Balance As Per Trial Balance 49,489Less: Depreciation for the Year (note 1)(41,370)
8,119
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Financial Accounting
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Lecture – 39
Fixed Assets Schedule with Addition / Deletion
Addition during the yearFurnitureand Fixture – Cost Rs. 15,000Vehicles – Cost Rs. 750,000
Deletion / DisposalVehicle – Cost Rs. 187,500Sale Proceeds – Rs. 150,000
Financial Accounting
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Lecture – 39
Particulars
CostR
A
T
E
Accumulated Depreciation WDV
As At
1-7-01
Addition/
Deletion
As At
30-6-02
As At
1-7-01
On
Disposal
For The
Year
As At
30-6-02
As At
30-6-02
Land 120,000 0 120,000 0 0 0 0 120,000
Building 315,000 0 315,000 10 46,050 26,895 72,945 242,055
Furniture and Fixture 34,500 15,000 49,500 10 11,250 3,825 15,075 34,425
Vehicles 187,500 750,000
(187,500)
750,000
10
66,000 (66,000) 75,000 75,000 675,000
TOTAL 657,000 577,500 1,234,500 123,300 (66000) 105720 163,020 1,071,480
Note: to be Zoomed in two parts as done in lecture 38
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Financial Accounting
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Lecture – 39
Calculation of DepreciationBuilding 315,000 – 46,050 = 268,950 x 10% = 26,895Furniture 34,500 – 11,250 = 23,250 x 10% = 2,325
+ 15,000 x 10% = 1,500
OR 49,500 – 11,250 = 38,250 x 10% =
3,825
Vehicles 750,000 – 0 = 750,000 x 10% = 75,000
Financial Accounting
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Lecture – 39
Disposal of Fixed Asset Account
Assets Disposal Account
Debit side.
Cost 187,500
Profit and Loss A/c 28,500
Credit side.
Acc.Dep. 66,000
Sale Proceeds 150,000
Financial Accounting
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Lecture – 39
Question
• The following trial balance has been extracted from the books of Delta Limited as on June 30, 2002.
• You are required to prepare the profit and loss account for the year and the Balance Sheet as at June 30, 2002.
Financial Accounting
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Lecture – 39
Delta Limited
Trial Balance as at June 30, 2002
Title of Account Dr. Rs. Cr. Rs.
Paid up capital 1,100,000
Accumulated Profit and Loss Account 308,520
Land 200,000
Building 585,000
Machinery 495,000
Vehicles 115,000
Accumulated Dep. – Building 85,000
Machinery 142,200
Vehicles 30,000
Purchases 1,815,282
Financial Accounting
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Lecture – 39
Title of Account Dr. Rs. Cr. Rs.
Sales 2,851,290
Office Maintenance 289,512
Salaries 487,863
Rent 38,700
Electricity 13,941
Bad Debts Written off 6,732
Provision for Doubtful Debts 1-7-01 7,749
Debtors 196,056
Creditors 157,437
Stock 1-7-01 231,201
Cash and Bank Balance 207,909
TOTAL 4,682,196 4,682,196
Financial Accounting
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Lecture – 39
• Following adjustments are required to be made: Authorized share capital is Rs. 1,100,000 divided in to
11,000 shares of Rs. 100 each. Stock in Trade on 30-6-2002 Rs. 262,278 Salaries payable amount to Rs. 5,229 Rent paid in advance amount to Rs. 2,700 Dividend of Rs. 132,000 is proposed Provision for doubtful debts is to be increased to Rs.
8,442 Depreciation Building 5%, Machinery 10% and Vehicles
20% on Written Down Value
Financial Accounting
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Lecture – 39
SolutionDelta Limited
Balance Sheet As At June 30, 2002
Particulars Note Amount Rs.
Fixed Assets at WDV 1
Current Assets
1,060,520
Debtors 2
Prepaid Rent
Stock in Trade
Cash and Bank Balance
187,614
2,700
262,278
207,909
Current Liabilities
660,501
Creditors
Salaries Payable
Proposed Dividend
157,437
5,229
132,000
294,666
Working Capital 365,835
Net Assets Employed 1,426,355
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Financial Accounting
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Lecture – 39
Financed By:
Authorized Capital11,000 Shares of Rs. 100 each 1,100,000
Paid Up Capital11,000 Shares of Rs. 100 eachAccumulated Profit and Loss Account
1,100,000326,355
Total 1,426,355
Note: Slide 14 and 15 will be shown together and then zoomed one by one as done in earlier lectures.
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Financial Accounting
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Lecture – 39
Delta Ltd
Profit and Loss Account for the Year Ended June 30 2002
Note RS.
Sales 2,851,290
Less: Cost of Goods Sold 3 1,784,205
Gross Profit 1,067,085
Less: Expenses
Salaries and Wages4 493,092
Office Maintenance 289,512
Rent 5 36,000
Electricity 13,941
Bad Debts
Provision for bad debts 6
6,732
693
Depreciation 1 77,280
917,250
Net Profit 149,835
Financial Accounting
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Lecture – 39
Less: Dividend Declared 132,000
17,835
Add: Accumulated Profit Brought Forward 308,520
Accumulated Profit Carried Forward 326,355
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Note: Slide 16 and 17 will be shown together and then zoomed one by one as done in earlier lectures.
Financial Accounting
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Lecture – 39
(1) Fixed Assets at WDV
Particulars
CostR
A
T
E
Acc. Dep. WDV
As At
1-7-01
Addition/
Deletion
As At
30-6-02
As At
1-7-01
For The
Year
As At
30-6-02
As At
30-6-02
Land 200,000 0 200,000 0 0 0 0 200,000
Building 585,000 0 585,000 5 85,000 25,000 110,000 475,000
Machinery 495,000 0 495,000 10 142,200 35,280 177,480 317,520
Vehicles 115,000 0 115,000 20 30,000 17,000 47,000 68,000
TOTAL 1,395,000 0 1,395,000 257,200 77,280 334,480 1,060,520
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Note: to be Zoomed in two parts as done in lecture 38
Financial Accounting
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Lecture – 39
• (2) Debtors
Debtors 196,056
Less: Provision for
Doubtful Debts(note 6) (8,442)
187,614
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Financial Accounting
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Lecture – 39
(3) Cost of Goods Sold
Opening Stock 231,201
Add: Purchases 1,815,282
Cost of Goods Available for Sale 2,046,483
Less: closing stock (262,278)
1,784,205
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Financial Accounting
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Lecture – 39
• (4) Salaries
• (5) Rent
Salaries and Wages
Debit side.
Paid 487,863
Payable 5,229
Credit side.
Balance 493,092
Rent
Debit side.
Paid 38,700
Credit side.
Prepaid 2,700
Balance 36,000
Financial Accounting
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Lecture – 39
• (6) Provision for Doubtful DebtsProvision
Debit side.
Balance 8,442
Credit side.
Bal. B/F 7,749
P&L A/c 693