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Brief Answer Questions:
[10 × 2 = 20]Define patent.
What is intangible asset?
What do you mean monetary concept?
What do you mean by GAAP?
What are the different types of cheque?
The following particulars are provided to you:
Profit for the year Rs 40,000
Loss on revaluation Rs 21,000
Gain from cash flow hedges Rs 26,000
Gain on sale of investment Rs 25,000
Required: Statement of Other Comprehensive Income as per NFRS
The following transaction is given:
➢ Started business with Cash Rs 150,000, machinery Rs 60,000, and stock Rs 40,000
➢ Salary paid Rs 55,000 including an advance of Rs 5,000.
Required: Accounting Equation.
You are given the following information about the PQ Company Ltd on 31st December 2022:
| Particulars | Amount Rs. |
| 5000 equity shares of Rs.100 per share | 500,000 |
| Share premium | 150,000 |
| Retained earnings | 200,000 |
| Total shareholder's equity | 750,000 |
The following transition occurred during the year 2023:
Issued an additional 2,000 shares of Rs 100 each at Rs.120 each. The company earned a Net Profit of Rs 75,000 during the year. The company declared and paid a dividend of Rs 40,000 during the year.
Required: Statement of change in Equity at the end of 2023.
Advance Company acquired Cheeps-making machinery of Rs 1,000,000 with a salvage value of Rs 100,000. It has the expected capacity of producing 450,000 packets of cheeps during its life. It produces 110,000 packets of cheeps in year 1 and 150,000 packets in cheeps in year 2.
Required: Depreciation for the year 1 and year 2.
The following information are given:
➢ Rs 60,000 was invested as a capital
➢ Purchase goods for Rs 200,000 and paid partially Rs 150,000 on cash
Required: Journal Entries
Short Answer Questions: (Attempt any SIX Questions)
[6 × 5 = 30]Write about accounting process.
Differentiate between revenue and capital expenditure with examples.
What is ledger? Why it is needed?
Following are the information of assets of a Company:
| Particulars | Year 1 |
| Sales | 10,000 |
| Cost of Sales | 6,000 |
| Gross Profit | 4,000 |
| Expenses | 1,500 |
| Depreciation | 500 |
| Interest on Working Capital | 800 |
| Interest on loan | 400 |
| Profit before tax | 800 |
| Provision for Tax | 200 |
Required: Vertical Analysis
The following transactions are given:
1st January 2021 Machinery purchased Rs 300,000.
1st July 2022 Additional machinery purchased Rs. 400,000.
30th June 2023 Machinery purchased on 1st January was sold for Rs. 270,000.
Additional Information:
➢ Depreciation is to be provided at the rate of 15% per annum on the basis of Straight Line Method.
➢ Accounts are closed on 31st December, each year.
Required: Machinery account from 2021 to 2023
The bank statement of a company shows a balance of Rs. 50,000 on 30th Ashwin 2081. However the company balance showed a different balance of Rs 36,000. On the investigation, the following differences were noticed:
➢ Outstanding cheque Rs 30,000 ~
➢ Deposit in transit Rs 20,000 r
➢ A customer's cheque of Rs 5,000 was return with the bank statement marked NSF. ~
➢ Collection of notes receivable for Rs 4,000 and interest on investment Rs 2,000 *
➢ Bank charge Rs 2,000 for the service provided by the bank ~
➢ Bank paid Rs 11,000 but the company recorded Rs 16,000 in its statement.
Required: Bank reconciliation statement
The following particulars are extracted from the trial Balances of a manufacturing firm.
| Tax paid | 70,000 |
| Dividend paid | 30,000 |
| Office supplies | 90,000 |
| Dividend received | 30,000 |
| Sales | 1,200,000 |
| Sundry debtors | 180,000 |
| Raw material purchase | 550,000 |
| Factory overheads | 100,000 |
| Manpower cost | 250,000 |
| Selling overhead | 50,000 |
| Capital employed | 600,000 |
| Depreciation expenses | 60,000 |
| Interest expenses | 20,000 |
| Motive power | 10,000 |
Required: (a) Value-added statement and (b) Net profit for the year
Long Answer Questions:(Attempt any THREE Questions)
[3 × 10 = 30]"Accounting information is essential for taking right decisions in any organization." Explain.
Write about concept, importance and limitations of accounting standard.
The Trial Balance of KK company as of 31st December 2023 is given below:
| Particulars | Debit (Rs.) | Credit (Rs.) |
| Equity share capital | - | 300,000 |
| Building | 200,000 | - |
| Copyright | 20,000 | - |
| 10% Debenture | - | 100,000 |
| Interest on Debenture | 5,000 | - |
| Revenue from operation | - | 470,000 |
| Purchases | 250,000 | - |
| Salaries & wages | 35,000 | - |
| Cash at bank | 40,000 | - |
| 8% Investment | 100,000 | - |
| Account payable | - | 76,000 |
| Account receivable | 40,000 | - |
| Commission received | - | 18,000 |
| Prepaid insurance | 24,000 | - |
| Office rent | 26,000 | - |
| Plant & Equipment | 200,000 | - |
| Marketing expenses | 30,000 | - |
| Interest on investment | - | 6,000 |
| Total | 970,000 | 970,000 |
Adjustment:
➢ Stock at the end of the year Rs 50,000.
➢ Depreciation on Building is 5% and Plant & Equipment is 15%.
➢ Salary to be paid Rs 5,000.
➢ Prepaid insurance expired during the year Rs 20,000.
Required:
a) Profit and Loss Statement for the year ending 31st December.
b) Statement of Financial Position as on 31st December.
The KK Company's Statement of Profit and Loss account and Statement of Financial Position for two years have been given below:
| Statement of Profit and Loss for the year 2023 | |
| Particulars | Amount (Rs) |
| Revenue from operation | 1,200,000 |
| Less: Cost of sales | (800,000) |
| Gross margin | 400,000 |
| Add Other income (including dividend received Rs 10,000) | 60,000 |
| Total | 460,000 |
| Less: Distribution expenses | (100,000) |
| Less: Administrative expenses (write-off of goodwill Rs 10,000 and depreciation of Rs 90,000) | (260,000) |
| Operating Profit | 100,000 |
| Less: Finance cost | (25,000) |
| Net profit before tax | 75,000 |
| Less: Provision for tax | (18,750) |
| Net profit after tax | 56,250 |
| Less: Dividend paid | (6,000) |
| Retained Earnings | 50,250 |
| Statement of Financial Position of a company for 2022 and 2023 | ||
| Assets | 2022 | 2023 |
| Non-Current Assets: | ||
| Property, plant and equipment | 500,000 | 600,000 |
| Intangible assets (Goodwill) | 40,000 | 30,000 |
| Investments | 160,000 | 220,000 |
| Total Non-Current Assets | 700,000 | 850,000 |
| Current Assets: | ||
| Inventories/Stock | 40,000 | 50,000 |
| Cash and cash equivalents | 50,000 | 60,000 |
| Account receivables | 60,000 | 50,000 |
| Trade and Other receivables | 50,000 | 40,000 |
| Total Current Assets | 200,000 | 200,000 |
| Fictitious Assets | - | - |
| Total Assets (Total Non-current and Current Assets) | 900,000 | 1,050,000 |
| Equity: | ||
| Share capital @Rs.100 each | 500,000 | 600,000 |
| Reserve/Retained earnings | 30,000 | 80,250 |
| Non-controlling interests | - | - |
| Total Equity | 530,000 | 680,250 |
| Liabilities | ||
| Non-Current Liabilities: | ||
| 10% Loans and borrowings | 250,000 | 351,000 |
| Total Non-Current Liabilities | 250,000 | 351,000 |
| Current Liabilities: | ||
| Trade and other payable | 50,000 | - |
| Income tax liabilities | - | 18,750 |
| Provisions | 70,000 | - |
| Total Current-Liabilities | 120,000 | 18,750 |
| Total Liabilities (Total Non-current and Current) | 370,000 | 369,750 |
| Total Equity and Total Liabilities | 900,000 | 1,050,000 |
Required: Statement of Cash Flow under NFRS
Comprehensive Answer/ Case / Situation Analysis Questions:
[20]The XYZ Company's Statement of Profit and Loss account and Statement of Financial Position for two years have been given below:
Statement of Profit and Loss for the year 2080
| Particulars | Amount (Rs.) |
| Revenue from operation | 6,00,000 |
| Cost of sales | (400,000) |
| Gross profit | 200,000 |
| Other income | 20,000 |
| Total | 220,000 |
| Distribution expenses | (60,000) |
| Administrative expenses | (115,000) |
| Operating profit | 45,000 |
| Financial cost | (7,500) |
| Net Profit | 37,500 |
| Statement of the financial position of a company for 2079 and 2080 | ||
| Assets | 2079 | 2080 |
| Non-current assets: | ||
| Property, plant, and equipment | 200,000 | 250,000 |
| Intangible assets | 10,000 | 7,500 |
| Investment (long-term) | 45,000 | 55,000 |
| Total Non-current Assets: | 255,000 | 312,500 |
| Current Assets: | ||
| Inventories / Stock | 20,000 | 30,000 |
| Cash and cash equivalents | 25,000 | 30,000 |
| Account receivable | 20,000 | 15,000 |
| Trade and Other receivable | 15,000 | 20,000 |
| Total current assets | 80,000 | 95,000 |
| Fictitious assets | - | - |
| Total assets | 335,000 | 407,500 |
| Equity: | ||
| Share capital @Rs.100 each | 200,000 | 225,000 |
| Reserve/Retained earnings | 45,000 | 82,500 |
| Non-controlling interest | - | - |
| Total Equity | 245,000 | 307,500 |
| Liabilities: | ||
| Non-current liabilities: | ||
| 10% Loan and Borrowing | 60,000 | 75,000 |
| Total non-current liabilities | 60,000 | 75,000 |
| Current liabilities: | ||
| Trade and Other payable | 15,000 | 25,000 |
| Income tax payable | - | - |
| Provision | 15,000 | - |
| Total current liabilities | 30,000 | 25,000 |
| Total liabilities | 90,000 | 100,000 |
| Total Equity and Liabilities | 335,000 | 407,500 |
Required: Financial analysis for 2080:
a) Current ratio (2:1)
b) Acid test ratio (1:1)
c) Debt to total capital ratio (less than 40%)
d) Stock turnover ratio (at least 8 times)
e) Total assets turnover ratio (more than 1 time)
f) Net profit margin (at least 12%)
g) Return on assets (at least 5%)
h) Return on equity (at least 7%)
i) Average sales period (45 days or less than 45 days)
j) Account receivable turnover ratio (at least 8 times)
k) Comment on the above result.