Reference no: EM132399170

Advanced Accounting Questions

1) Bharat Trading Co. Ltd. with a registered capital of Rs. 100000 issued 5000 equity shares of Rs.10 each, payable Rs. 2 on application, Rs. 2 on allotment, Rs. 3 on first call and Rs. 3 on final call.

Pass Journal Entries assuming the shares issued were fully subscribed and the money has been received.

2) Prepare a fixed assets schedule from the following information:

a) Opening Value of assets as following:

Plant & Machinery Rs. 7000

Furniture & Fixture Rs. 100000

Computer Rs. 30000

b) Purchase Plant & Machinery in the end of the year Rs. 100000.

c) Sale of Computer made at the end of the year Rs. 5000.

d) Depreciation till date:

Plant & Machinery Rs. 80000

Furniture & Fixture Rs. 6000

Computer Rs. 10000

e) Charge depreciation @15% on all the assets in the current year.

3) Goodwill Ltd. was registered with a Nominal capital of Rs. 5000000 divided into Equity shares of Rs. 100 each. The following Trial Balance is extracted from the books on 31^st March, 2014

Debits	Rs	Credits	Rs
Buildings	2900000	Sales	5200000
Machinery	1000000	Outstanding  Salaries	20000
Closing Stock	900000	Provision for Bad Debts	30000
Purchases (adjusted)	2100000	Equity share Capital	2000000
Salaries	600000	General Reserve	450000
Staff Welfare Expenses	100000	Profit & Loss	250000
Rent	260000	Sundry Creditors	920000
Depreciation on building	80000	Accumulated depreciation on building	500000
Depreciation on machinery	120000	Accumulated depreciation on machinery	550000
Bad Debts	60000	14% Debentures	2000000
Accrued interest on investment	20000	Interest on investment	260000
Investment	1200000
Interest on Debentures	280000
Loose Tools	230000
Advance Tax (AY 2011-12)	600000
Misc Expenses	180000
Sundry Debtors	1250000
Cash at bank	300000
TOTAL	12180000		12180000

You are required to prepare Profit & Loss Statement for the year ending 31.03.2014 and Balance Sheet as on that date after taking into consideration the following information:

a) Make a provision for Income tax for Rs. 760000.

b) Provision for doubtful debts @ 4% on debtors.

c) Closing stock is more than opening stock by Rs. 300000.

4) From the following information calculate net cash flows from operating activities:

Trading, Profit and Loss Account for the year ended 31st March, 2016

Particulars	Rs.	Particulars	Rs.
To Purchases:		By Sales:
Cash	600000	Cash	900000
Credit	200000	Credit	100000
To Wages	100000
To Gross Profit c/d	100000
	1000000		1000000
To Depreciation on Plant	20000	By Gross Profit b/d	100000
To Salaries	50000	By Interest Received	20000
To Loss on Sale of Plant	5000	By profit on Sale of Long-term Investment	30000
To Net Profit	75000
	150000		150000

All credit sales and purchases were made during the last quarter of the financial year. Therefore, no cash was paid to creditors or collected from debtors during the year.

You are required to calculate Cash Flows from Operating Activities by adopting Direct Method.

5) From the following financial statement of B Ltd as on 31st December, 2014 and 31st December, 2015, calculate the following ratios for the two years:

(a) Proprietary Ratio; (b) Acid Test Ratio; (c) Current Ratio and (d) Working Capital.

Liabilities	31.12.2014	31.12.2015	Assets	31.12.2014	31.12.2015
Equity Share Capital	500000	600000	Building at cost	300000	300000
Securities Premium	-	20000	Machinery at cost	600000	680000
Revenue Reserves	80000	120000	Furniture at cost	40000	50000
Profit and Loss Account	120000	160000	Inventories	320000	390000
10% Debentures	200000	100000	Debtors	300000	250000
Sundry Creditors	350000	370000	Cash	5000	36000
Provision for Depreciation on:
Machinery	300000	320000
Furniture	15000	16000
	1565000	1706000		1565000	1706000