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

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

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

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### Replies to This Discussion

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

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

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

=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

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

MGT101 2nd Assginemt solution spring 2013

Attachments:

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

1. Gross  purchases

950000+40000

=990000

=300,000 + 250,000

=550,000

1.  Financial expenses

=500,000 + 50,000

=550,000

1.  Current Assets

=Cash + Accounts Receivable

=90,000 + 60,000

=150,000

1. Current liabilities

=35000+25000

=60000

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

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

MGT_101_ASSIGNMENT 2 SOLUTION

Attachments:

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