Assignment # 01 FinancialAccounting (MGT101) Virtual University of Pakistan Ques

Question

Assignment # 01 FinancialAccounting (MGT101) Virtual University of Pakistan Question:

Mr. Ali is running "Hyper Star Traders" a soleproprietorship business located at the Mall Road, Lahore. At theyear end the business has:

Furniture Rs. 40,000

Plant 200,000

Capital 280,000

On 30th November 2009 Mr. Ali submitted a tender forsale of goods of Rs. 20,000 which is likely to be confirmedshortly. Bank debited service charges Rs. 150 and interest on loanRs. 500 and credited dividend for Rs. 2,000 in the month ofDecember (intimation from bank was received on 7th January 2010).Mr. Ali also estimates that 5% of the amount will not becollectable from sundry debtors. House rent allowance Rs. 5,000 hasbeen paid on 31st December from his personal account, on the samedate stock was valued at Rs. 200,000 and plant Rs. 160,000 becauseof its wear and tear.

The following balances (in the books of Hyper StarTraders) are also given along with above information as on 31stDecember 2009:

Particulars Rs. ParticularsRs.

Opening stock 120,000 Bank balance 36,000

Sundry Debtors 100,000 Bills payable 20,000

Longterm Investments 60,000 Returns outwards 4,800

Returns inwards 8,000 Commission 2,000

Purchases 680,000 Sales 924,000

Cashin hand 4,000 Interest received 800

Bills receivable 44,000 Sundry Creditors160,000

Carriage out 3,600 Salaries 48,000

Insurance paid 2,800 Wages 45,200 Assignment # 01Financial Accounting (MGT101) Virtual University of Pakistan

Required:

A. Pass necessary adjustingentries. (15 marks)

B. Prepare the Income statement ofHyper Star Traders for the year ending on 31st December, 2009. (15marks)

C. Prepare the Balance sheet ofHyper Star Traders as on 31st December, 2009. (10marks)

Explanation / Answer

Income Statement Sales 924,000 Less: Return Inward -8,000 916,000 Interest Received 800 Dividend 2,000 Commission Earned 2,000 Closing Stock 200,000 1,120,800 Opening Stock 120,000 Purchases 680,000 Less: Return Outward -4,800 675,200 Wages 45,200 Salaries 48,000 Insurance 2,800 Carriage Outward 3,600 Bank Service Charges 150 Interest On Loan 500 House rent Allowance 5,000 Bad Debts 5,000 Depreciation 40,000 945,450 Excess Of Income Over Expenditure 175,350 Balance Sheet Assets Cash 4,000 Bank (36000+2000-150-500) 37,350 S.Debtors 100000 Less Bad Debts -5000 95,000 Closing Stock 200,000 Bills Receivables 44,000 Plant 200000 Less: Depreciation -40000 160,000 Furniture 40,000 Long Term Investment 60,000 640,350 Liabilities Capital (280000 + 5000 HRA) 285,000 Excess Of Income …. 175,350 S.Creditors 160,000 Bills Payable 20,000 640,350 I expect with the given details you can easily pass adjutmententries by yourself. Income Statement Sales 924,000 Less: Return Inward -8,000 916,000 Interest Received 800 Dividend 2,000 Commission Earned 2,000 Closing Stock 200,000 1,120,800 Opening Stock 120,000 Purchases 680,000 Less: Return Outward -4,800 675,200 Wages 45,200 Salaries 48,000 Insurance 2,800 Carriage Outward 3,600 Bank Service Charges 150 Interest On Loan 500 House rent Allowance 5,000 Bad Debts 5,000 Depreciation 40,000 945,450 Excess Of Income Over Expenditure 175,350 Balance Sheet Assets Cash 4,000 Bank (36000+2000-150-500) 37,350 S.Debtors 100000 Less Bad Debts -5000 95,000 Closing Stock 200,000 Bills Receivables 44,000 Plant 200000 Less: Depreciation -40000 160,000 Furniture 40,000 Long Term Investment 60,000 640,350 Liabilities Capital (280000 + 5000 HRA) 285,000 Excess Of Income …. 175,350 S.Creditors 160,000 Bills Payable 20,000 640,350

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