QUESTION NO 1

SOLUTION

TRADING AND PROFIT& LOSS ACCOUNT

(For the year ended on 31 March 1982)

PARTICULARS AMOUNT PARTICULARS AMOUNT

To opening stock 50000

To purchase 400000 By sales(includes Rs. 604000
4000 being sales under
casted)
To wages 40000 By closing stock 75000
(Market value 80000)

To gross profit C/d 189000

679000 679000
To salary 12000 By gross profit B/d 189000
To rent 9000 By Change in 6160
depreciation
To Electricity 6000
To general charges 4000
To discount 11400
To postage and telephone 4000
(includes Rs. 1000 for the
Telephone bill remain unpaid)
To Petty Cash expenses 9600
To advertising(Rs 6000 is 5000
Deferred revenue expenditure&
is equally written off for 3 years
To lease hold land (Written off) 4000
To Depreciation 1200
To net profit C/d 128960

195160 195160
 BALANCE SHEET
(For the year ended on 31 March 1982)

LIABILITIES AMOUNT ASSETS AMOUNT

(RS) (RS)
Capital fund 34000 Lease hold land 16000
Add Net profit 128960
Less Drawings (26000) 136960 Motor car 15200
Sundry debtors 49000
Sundry creditors 35000 Closing stock 75000
Cash 6760
Suspense 10000 Bank 17000

Outstanding expenses 1000 Miscellaneous 4000

expenses
(Differed Revenue
expenses)

182960 182960
Question 2

Solutions

(a) STATEMENT SHOWING CHANGES IN WORKING CAPITAL

Particulars 2000 2001

(a) CURRENT ASSETS
Stock 25500 18500
Sundry Debtors 22000 16200
Cash 150 450
Bank - 2100
Total (a) 47650 37250
(b)CURRENT LIABILITIES
Sundry creditors 28000 24000
Bills Payable 8000 8500
Total (b) 36000 32500
Net working capital 11650 4750
Decrease in working capital 5900

( b) FUND FLOW STATEMENT

SOURCES OF FUND AMOUNT APPLICATION OF FUND AMOUNT

Fund from operation 12600 Dividend paid 6000

Increase in share capital 20000 Payment of bank loan 25000
Sale of plant 6500 Purchase of plant 14000
Decrease in working 5900
capital

45000 45000
WORKING NOTES

(1) Adjusted Profit/ Loss account

Particulars Amount Particulars Amount
To balance b/d 8600
To reserves 2500
To goodwill 750
To dividend 6000 By Fund from operation(bal) 12600
To depreciation 6550
By profit on sale of plant 3000
By balance c/d 8800

24400 24400
QUESTION 3

I. LIQUIDITUY RATIOS
It includes

1. Current Ratios = Current Assets

Current Liabilities

For Year 2000= 96000 = 2.52: 1

38000

For Year 2001= 68000 = 3.4: 1

20000

2. Quick liabilities = Current Assets - Inventories

Current Liabilities – Bank ODI

For Year 2000= 72000 = 1.89: 1

38000

For Year 2001= 40000 = 2: 1

20000

II INVENTORY RATIOS
Formula = Cost of good sold
Average Stock

Average Stock = (Opening stock+ Closing Stock)/2

For Year 2000 = 100000 = 4

25000

For Year 2001= 138000 = 6.57

21000
III AVERAGE COLLECTION PERIOD

Formula = Cost of good sold * 1

Sundry Debtors 365

For Year 2000= 150000 * 1/365 = 146 Days

60000

For Year 2001= 184000 * 1/365 = 73 Days

36000

IV OPEARTIN RATIOS

FORMULA = Operating Profit(sales- cost of good sold)

Sales

For Year 2000= 50000 *100 = 33.33%

150000

For Year 2001= 46000 *100 = 25%

184000
MCSL-036 –Section 3 – MC0-035

SOLUTION

(a) JOURNAL ENDRIES

DATE PARTICULARS L/F DEBIT CREDIT

(RS) (RS)
04/09/2008 Cash account DR 500000
Capital Fund A/C 500000
(Being cash introduced to start the
hospital business transferred to
capital Fund)
08/09/2008 Bank account DR 150000
Cash account 150000
(Being cash deposited in to
bank)
12/09/2008 Equipment account DR 200000
To Cash Account 200000
(Being Equipment costing
200000 purchased)
16/09/2008 Purchase account DR 100000
To Cash Account 100000
(Being drugs purchased to be
consumed in hospital)
20/09/2008 Cash Account DR 50000
To Fees account 50000
(Being Fees amount collected
from the patients)
25/08/2008 Salary account DR 100000
To Cash Account 100000
(Being salary paid to the
employees in cash)
30/09/2008 Rent Account DR 60000
To Bank Account 60000
(Being rent paid to landlord
through bank account)
(b) TRIAL BALANCE

PARTICULARS DEBIT CREDIT

(RS) (RS)
Capital fund 500000

Equipment 200000

Purchases 100000

Fees 50000

Salary 100000

Rent 60000

Bank 90000
TOTAL 550000 550000