Assignment #01 Financial Accounting (MGT101) Virtual University of Pakistan Ques

Question

Assignment #01                           Financial Accounting (MGT101)


Virtual University of Pakistan

Question:
Mr. Ali is running “Hyper Star Traders” a soleproprietorship business located at the Mall
Road, Lahore. At the year end the business has:
Furniture       Rs.  40,000
Plant              200,000
Capital            280,000
On 30th
November 2009 Mr. Ali submitted a tender for sale of goods ofRs. 20,000 which
is likely to be confirmed shortly. Bank debited service charges Rs.150 and interest on
loan Rs. 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% ofthe
amount will not be collectable from sundry debtors. House rentallowance Rs. 5,000 has
been paid on 31st
December from his personal account, on the same date stockwas
valued at Rs. 200,000 and plant Rs. 160,000 because of its wear andtear.  
The following balances (in the books of Hyper Star Traders) arealso given along with
above information as on 31st
December2009:           

Particulars        Rs.               Particulars        Rs.
Opening stock    120,000               Bank balance      36,000  
Sundry Debtors     100,000   Bills payable        20,000
Long term Investments   60,000     Returnsoutwards      4,800
Returns inwards        8,000   Commission        2,000
Purchases    680,000 Sales  924,000
Cash in hand         4,000    Interestreceived        800
Bills receivable     44,000    Sundry Creditors 160,000
Carriage out         3,600                      Salaries                         48,000
Insurance paid        2,800   Wages        45,200

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 assume you can easily pass adjustment entries by yourselfwith the above details. 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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