MGT101 - Financial Accounting Assignment No. 02 Solution and Discussion Spring 2013 Due Date Jun 19, 2013

[Nomi Gill]

　

A company, whose accounting year is calendar year, purchased machinery inclusive of installation charges amounting to Rs. 250,000 on 1st January 2008.

On 1

st October 2012, the machinery has become obsolete and is sold for Rs. 60,140.

Company charged the deprecation @20% per annum on plant and machinery. It is the policy of the company to charge the deprecation of all fixed assets on the basis of use under diminishing balance method.

Required:

1. Prepare depreciation schedule for five years showing the four columns i.e. Years, Depreciation expense, Accumulated depreciation and Book value.

2. Calculate the profit or loss on disposal of machinery.

QUESTION-02

Required:

Based on the above information, you are required to calculate the following for the period ended on 31

st December 2012:

1. Net sales

2. Gross purchases

3. Administration expenses

4. Financial expenses

5. Current assets

6. Current liabilities

Following information is available of a business concern for the year of 2012. Items	Rs.
Gross sales	900,000
Return inwards	50,000
Return outwards	40,000
Net purchases	950,000
Gross loss	200,000
Advertising expenses	200,000
Distribution expenses	100,000
Salaries of clerical staff	300,000
Office rent	250,000
Bank charges	50,000
Long term loan taken from bank on 1 st January @ 12% per annum	500,000
Cash	90,000
Accounts receivable	60,000
Plant and machinery	300,000
Building	900,000
Accounts payable	35,000
Short term borrowings	25,000

[+ M.Tariq Malik]

solution Q # 1

     

Year Cost	depreciation	acc depreciation	book value
	50000	50000	200000
	40000	90000	160000
	32000	122000	128000
	25600	147600	102400
	15360	162960	87040

 

                                                                                      250000

1st                50000                     50000                             200000

2nd              40000                        90000                           160000

3rd                32000                      122000                         128000

4th                25600                      147600                         102400

5th                15360                      162960                         87040

note =  5ht year dep caculated in 9/12 like that

102400*9/12*20/100=15360

book value = 87040

sale price = 60140

loss = 26900 (87040-60140)

 

 

Q.2

(1) Net sale

net sale=gross sale -return inward

=900000-50000

=850000

(2)gross purchases

gross purchases=net purchases return outward

=950000+40000

=990000

(3)administration expenses

admin expense=salaries of clerical staff + office rent

=300000+250000

=550000

(4)financial expense

interest on bank loan 12%+bank charges

=50000+60000

=110000

(5)current assets

cash +account receivable

=90000+60000

=150000

(6)current liabilities

account payable +short term borrowing+interst on bank loan

=35000+25000+60000

=120000

SEMESTER SPRING 2013

FINANCIAL ACCOUNTING (MGT101)

ASSIGNMENT NO – 02

Asad Azeem (mc130200467)

 

 

QUESTION-1

• Prepare depreciation schedule for five years showing the four columns i.e. Years, Depreciation expense, Accumulated depreciation and Book value.

Years	Depreciation expense	Accumulated depreciation	Book value.
01-January-2008			250,000
31-December-2008	50,000	50,000	200,000
31-December-2009	40,000	90,000	160,000
31-December-2010	32,000	122,000	128,000
31-December-2011	25,600	147,600	102,400
31-December-2012	15,360	162,960	87,040

 

• Calculate the profit or loss on disposal of machinery.

 

 

Book value after five years Rs. 87,040

Sale price Rs. 60,140

Profit on sale Rs. 26,900(87,040– 60,140)

 

 

 

 

 

 

 

 

 

 

 

QUESTION-2

1. 1.      Net sales:

=Sales-Sales Return

=900,000 - 50,000

=850,000

1. 2.      Gross purchases:

=Net Purchase + Purchase Return

=950,000 + 40,000

=990,000

1. 3.      Administration expenses:

=Salaries of clerical staff+ Office rent

=300,000 + 250,000

=550,000

1. 4.      Financial expenses:

= Long term loan taken from bank on 1st January @ 12% per annum + Bank charges

=60,000 + 50,000

=110,000

1. 5.      Current Assets:

=Cash + Accounts Receivable

=90,000 + 60,000

=150,000

1. 6.      Current liabilities:

=Loan (Long Term + Short Term) + Accounts Payable

= 465,000(440,000+25,000) +35,000

=500,000

Q.2

(1) Net sale

net sale=gross sale -return inward

=900000-50000

=850000

(2)gross purchases

gross purchases=net purchases return outward

=950000+40000

=990000

(3)administration expenses

admin expense=salaries of clerical staff + office rent

=300000+250000

=550000

(4)financial expense

interest on bank loan 12%+bank charges

=50000+60000

=110000

(5)current assets

cash +account receivable

=90000+60000

=150000

(6)current liabilities

account payable +short term borrowing+interst on bank loan

=35000+25000+60000

=120000

[+ M.Tariq Malik]

MGT101 2nd Assginemt solution spring 2013

[+ M.Tariq Malik]

current liabilities me account payble or short term borrowings ayen gi 

current asset me accounts rec or cash ate hain plant or machinery non current asset hain 

here is my solution 

Q1 solution on the bases of use

Years	Depreciation expense	Accumulated depriciation	Book value
1	50000	50000	200000
2	40000	90000	160000
3	32000	122000	128000
4	25600	147600	102400
5	15360	162960	87040

 

 

Workings

 

 

Year end 31 dec 2008 =     250000X20% = 50000

Year end 31 dec 2012 =     102400 X 20% = 20480..       20480 X 9/12 = 15360

 

 

Q 1.2

Profit and loss on disposal

 

 

Disposal proceed =                 60140

Net book value at date =        87040

Loss                                         26900

 

 

Q2

Solution

1. Net sales

= 900000-50000

=850000

2. Gross  purchases

950000+40000

=990000

3. Administration expense

=300,000 + 250,000

=550,000

4.  Financial expenses

 

=500,000 + 50,000

=550,000

5.  Current Assets

=Cash + Accounts Receivable

=90,000 + 60,000

=150,000

6. Current liabilities

=35000+25000

=60000

 

[Maheen]

please share correct solution of current liabilities.

which one is correct from the following?

1) Loan (Long Term + Short Term) + Accounts Payable

= 465,000(440,000+25,000) +35,000

=500,000

2) Current liabilities

=35000+25000

=60000

3) Loan (Long Term + Short Term) + Accounts Payable

= 465,000(440,000+25,000) +35,000

=500,000

[sami ul haq]

yr 100% solution de du 3 dafa f a gaya hai mgt101 mn plzzzzzzzzzzz koi help kr du...

[+ M.Tariq Malik]

MGT_101_ASSIGNMENT 2 SOLUTION

See the attached file please