SEMESTER FALL 2012
FINANCIAL ACCOUNTING II (MGT401)
ASSIGNMENT NO. 02
DUE DATE: 8TH JANUARY 2013 MARKS: 30
TOPIC TO BE TESTED
Presentation of Financial Statements
To learn about the correct procedure to prepare the Statement of
To learn about the preparation of Notes to the Accounts
Following are the information extracted from the records of Local Industries Ltd. on 31st
Obligation under lease finance 120
Gratuity payable 120
Issued, subscribed and paid up capital
(50, 000 ordinary shares of Rs. 10 each - issued for cash) 500
General reserve 140
Share premium 250
Creditors, accruals and other liabilities 25
Dividend Payable 20
Current maturity of obligation under lease finance 35
Machinery & equipment
Work in process
Authorized capital: 80,000 ordinary shares of Rs. 10 each
Bonus issue (declared on December 31, 2012) from share premium account 40%
Income tax to be provided Rs. 30,000
Deferred tax to be provided Rs. 90,000
At 31/12/2012, the land was revalued upwards by Independent Valuer at Rs. 15,000
There were no disposals of fixed assets during the year.
Closing stock at 31st December 2012:
Raw material Rs. 35,000; Work in process Rs. 55,000; & Finished goods Rs. 360,000
Cost of fixed assets at the beginning of the year (assuming all external additions at
the start of the year).
Land Rs. 100,000; Building Rs. 180,000; & Machinery and equipment Rs. 240,000
Building - 10% on cost; & Machinery and equipment - 20% on cost
1. Prepare a statement of financial position (Report form/Statement form) of
Local Industries Ltd. as on 31st December 2012. 20 Marks
2. Show necessary notes to the accounts separately. 10 Marks
24 hours extra / grace period after the due date is usually available to
overcome uploading difficulties. This extra time should only be used to meet
the emergencies and above mentioned due dates should always be treated as
final to avoid any inconvenience.
Raw material purchased during the year 750
Trade receivables 50
Cash balance 45
Short term investments 30
Machinery & equipment 300
Long term investment 450
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look chapter 4
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