FIN711 Advanced Financial Accounting GDB Solution & Discussion Last Date:08-12-2014

[+ M.Tariq Malik]

FIN711 Advanced Financial Accounting GDB Solution & Discussion Last Date:08-12-2014

Solution & Discussion FIN711 Advanced Financial Accounting GDB No. 01 Fall 2014 Due Date: December 08, 2014


Topic/Area for Discussion

“Single Entry System”


This Graded Discussion Board will cover Audio/Video lessons # 5.



(1) Determine using the following information the amount of interest on capital earned by Mr. Entrepreneur on his capital used his business during the year 2013: (4 Marks)

a) He brought a car having market value of Rs. 425,000 in his business house to be used for business purposes only. This car had gifted him his wife on their 3rd marriage anniversary last year. The car was purchased at a price of Rs. 460,000.

b) He had certain assets of Rs. 1.80 million and corresponding liabilities of Rs. 0.75 million at the year’s beginning. Whereas these assets have been grown to the amount of Rs. 2.23 million and the corresponding liabilities have also been enhanced by 150%

c) During the year, his business generated an amount of Rs. 86,500 as net profit before tax excluding interest on capital amounted to Rs. 112,000 and interest of drawings amounted to Rs. 56,000.

d) Goods worth Rs. 115,500 gifted to Mr. Old – one of his friend who has started his own business.



(2) Differentiate the term “Statement of Affairs” used under single entry system from the term “Balance Sheet” used under double entry book keeping system. (2 Marks)



(3) Draw a complete hypothetical ledger account of debtors incorporating all information at their maximum. (4 Marks)

[+ M.Tariq Malik]

Please Discuss here about this assignment.Thanks

Our main purpose here discussion not just Solution

We are here with you hands in hands to facilitate your learning and do not appreciate the idea of copying or replicating solutions.

[ammara waqas]

plz correct me in first step we calculate capital using assets and liabilities. is it right?the car purchased amount will become an assets and we can add in assets. any 1 plz help me

[Hina Amjad]

anyone plz tell me how to start it, how to calculate interest on capital???

[ammara waqas]

plz any 1 help me in this gdb. pehly assignment etni buri hoi hai or ab gdb

[Hina Amjad]

"This car had gifted him his wife on their 3rd marriage anniversary last year."

what does this line means????? they didnt gave us the right question

[ammara waqas]

es group k log sub kahan chaly gy???????????? koi tu help kary

[+ M.Tariq Malik]

Answer the following:

 

(1)   Determine using the following information the amount of interest on capital earned by Mr. Entrepreneur on his capital used his business during the year 2013:                                                                                                         (4 Marks)

a)      He brought a car having market value of Rs. 425,000 in his business house to be used for business purposes only. This car had gifted him his wife on their 3rd marriage anniversary last year. The car was purchased at a price of Rs. 460,000.

b)      He had certain assets of Rs. 1.80 million and corresponding liabilities of Rs. 0.75 million at the year’s beginning. Whereas these assets have been grown to the amount of Rs. 2.23 million and the  corresponding liabilities have also been enhanced by 150%

c)      During the year, his business generated an amount of Rs. 86,500 as net profit before tax excluding interest on capital amounted to Rs. 112,000 and interest of drawings amounted to Rs. 56,000.

d)     Goods worth Rs. 115,500 gifted to Mr. Old – one of his friend who has started his own business.

 

(2)   Differentiate the term “Statement of Affairs” used under single entry system from the term “Balance Sheet” used under double entry book keeping system.                                                                                                       (2 Marks)

 

(3)   Draw a complete hypothetical ledger account of debtors incorporating all information at their maximum.  (4 Marks)

[+ M.Tariq Malik]

Dear Students Don’t wait for solution post your problems here and discuss ... after discussion a perfect solution will come in a result. So, Start it now, replies here give your comments according to your knowledge and understandings....

[3h92g8sqikuaa]

Solution day dein plz :( last day chal raha ha

[salman nazir]

Anybody.. what to do with the given two intersts in the question. ?? 

[+ M.Tariq Malik]

1)   Determine using the following information the amount of interest on capital earned by Mr. Entrepreneur on his capital used his business during the year 2013:                                                                                                         (4 Marks)

a)      He brought a car having market value of Rs. 425,000 in his business house to be used for business purposes only. This car had gifted him his wife on their 3rd marriage anniversary last year. The car was purchased at a price of Rs. 460,000.

b)      He had certain assets of Rs. 1.80 million and corresponding liabilities of Rs. 0.75 million at the year’s beginning. Whereas these assets have been grown to the amount of Rs. 2.23 million and the  corresponding liabilities have also been enhanced by 150%

c)      During the year, his business generated an amount of Rs. 86,500 as net profit before tax excluding interest on capital amounted to Rs. 112,000 and interest of drawings amounted to Rs. 56,000.

d)     Goods worth Rs. 115,500 gifted to Mr. Old – one of his friend who has started his own business.

  This requirement in this part is to determine the amount of interest on capital earned, but that is already given in bullet c) above. Neither are any interest rates given to calculate the amount of interest of beginning capital. As a result, it is not clear what the expectation is in this part. Regardless, one can calculate any missing amount using the following formula:

Adjusted closing capital = Closing capital + Drawings + interest on drawings ––(Additional capital introduced during the period + interest on capital)

 

The adjusted capital can then be compared to the beginning balance of capital to determine the amount of profit or loss.

 

Using the information given above (Rs.):

 

Closing capital = 2,230,000 – (750,000 x 150%) = 1,105,000

Drawings=115,500; Interest on drawings=56,000

Fresh capital (market value of car brought in business)=425,000; interest on capital=112,000

 

Using the above equation closing adjusted capital=1,105,000+115,500+56,000-(425,000+112,000)=739,500

 

Beginning capital=(1,800,000-750,000)=1,050,000

 

Decrease in capital=739,500-1,050,000= -310,500

 

The loss of Rs. 310, 500 does match agree with the profit of Rs. 86,500 provided in the information above. 

[+ M.Tariq Malik]

(3)   Draw a complete hypothetical ledger account of debtors incorporating all information at their maximum.  (4 Marks) 

Assuming the requirement to draw a hypothetical account of debtors in a single entry system, the following can be considered. Any of the items could be missing in a given situation and can be estimated as a balancing figure if other information is available. 

Debtors

To Balance b/d (Op. Bal)	By Cash received
To Credit Sales	By Discount Allowed
	By Sales Returns ………
	By Balance c/d (Clo. Bal.) ………