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# MGT101 Assignment#02 Solution & Discussion Due Date: 02-06-2011

Question No.1 (10 Marks)

Calculate the amount of Net Working Capital of the Trader.

Question No. 2 (10 Marks)

Calculate the amount of Administrative Expenses with the help of an IncomeStatement if net profit is amounted to RS. 271,000.

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See the attached file for MGT101 Idea Solution ( not confirmed)
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Question 1 solution

As we know…

Net working capital = current assets – current liabilities..

Current assets

Cash in hand  63400

Sundry Debtors 390000

Closing stock   136000

Total current assete  = 390000 + 63400 + 136000 = 589400

Current liabilities

Creditors 126000

Outstanding salaries 60000

Total current liabilities = 186000

Net working capital =  current assets = current liabilities

Net working capital =  589400 – 186000

Net working capital  = 403400

Question 2 solution

Income statement idea..

Cost of the goods sold= 115200                            opening stock

Less: 136000       closing stock

Cost of goods sold= 1087700

Sales                                        1975600

Less:     sales return                   13600

Less :    cost of goods sold       1087700

Gross profit=                           874300

As we know: gross profit =  net profit + administrative expenses + selling

expenses

there fore :

874300 = 271000 + administrative expenses + 345300

874300 – (271000 + 345300) = administrative expenses

874300 – 616300

This is in rough form..  don’t copy it as it is… make an income statement and check the calculations please..

thanks sir for ur idea

sir plz add PREPAID INSURANCE in CURRENT ASSETS

Prepaid Insurance will also be entertain coz its also relate to short term period

Question 1 solution

As we know…

Net working capital = current assets – current liabilities..

Current assets

Cash in hand                             63400

Sundry Debtors                        390000

Closing stock                136000

Prepaid insurance                     33000

Total current assete  = 390000 + 63400 + 136000 + 33000 = 622400

Current liabilities

Creditors 126000

Outstanding salaries 60000

Total current liabilities = 186000

Net working capital =  current assets = current liabilities

Net working capital =  622400 – 186000

Net working capital  = 436400

Question 2 solution

Income statement idea..

Cost of the goods sold= 115200                            opening stock

Less: 136000       closing stock

Cost of goods sold= 1087700

Sales                                        1975600

Less:     sales return                   13600

Less :    cost of goods sold       1087700

Gross profit=                           874300

As we know: gross profit =  net profit + administrative expenses + selling

expenses

there fore :

874300 = 271000 + administrative expenses + 345300

874300 – (271000 + 345300) = administrative expenses

874300 – 616300

This is in rough form..  don’t copy it as it is… make an income statement and check the calculations please..

See the attached file for one more idea solution of MGT101 Assignment#02 Spring 2011
Attachments:
one more idea solution of MGT101 Assignment#02 Spring 2011
Attachments:
See the attached file for another idea solution
Attachments:
Bhai in ma se sahi ans konsa hy??
confusing =O

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