Mgt101 - Solution

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Income Statement
As of Dec 31, 2009
				Amount in Rs.
	Sales		924,000
	Return Inwards		8,000
	Net Sales			916,000
	Cost of Sales
	Opening Stock		120,000
	Purchases	680,000
	Return Outwards	4,800
	Net Purchases	675,200	675,200
	Total Stock available for sale		795,200
	Closing Stock		200,000
	Net Cost of Sales			595,200
	Gross Profit			320,800
	Operating Expenses
	Salaries			48,000
	Wages			45,200
	Carriage out			3,600
	Commission			2,000
	Insurance Paid			2,800
	House Rent			5,000
	Bank Charges			150
	Interest on Loan			500
	Bad Debts on Sundary Debtors			5,000
	Written off Plant Value - wear& Tear			40,000
	Total Operating Expenses			152,250
	Operating Income
	Interest Received			(800)
	Dividend Income			(2,000)
	Total Operating Income			(2,800)
	Net of Total Operating Income/Expense			149,450
	Net Profit Transferred to Balance Sheet			171,350

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Hyper Star Traders
Balance Sheet
As of Dec 31, 2009
Liabilities & Owner's Equity				Assets
Current Liabilities		Amount in Rs.		Current Assets		Amount in Rs.
Bills Payable		20,000		Cash in Hand		4,000
Sundary Creditors		160,000		Bank Balance		36,000
Bank Charges/Interest Due		650		Sundary Debtors	100,000
				Bad Debts	5,000
				Net Sundary Debtors	95,000	95,000
				Bills Receivables		44,000
				Dividend Receivable recorded		(2,000)
				Closing Stock		200,000
Total current Liabilities		180,650		Total current Assets		377,000
Owners Equity				Fixed & Long Term Assets
				Long Term Investment		60,000
Capital	280,000			Furniture		40,000
Drawing (Credited)	5,000			Plant	200,000
Net Capital	285,000	285,000		Wear & Tear of plant	40,000
				Net Plant Value	160,000	160,000
Net Retained Earning from P&L		171,350
Total Capital & Retained Earning		456,350		Total Fixed & Long Term Assets		260,000
Total Liabilities & Owners Equity		637,000		Total Assets		637,000

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Hyper Star Traders
Adjustment Entries
As of Dec 31, 2009
	Amount in Rs.
Adjustment Entry # 1
Account	Dr	Cr
Bad Debts on Sundary Debtors	5,000
Sundary Debtors		5,000
Recording the bad debts on sundary debtors (100,000 x 5 % = 5,000)
Adjustment Entry # 2
Account	Dr	Cr
House Rent Expense	5,000
Capital		5,000
Adjustment Entry for recording the House rent paid from Owners personal Account
Adjustment Entry # 3
Account	Dr	Cr
Writen Off Value - Plant	40,000
Plant		40,000
Adjustment Entry for the Written off the plant value
Adjustment Entry # 4
Account	Dr	Cr
Bank Charges	150
Interest on Loan	500
Due Bank Charges		150
Due Interest on loan		500
	650	650
Adjustment Entry to record the due payment not yet recorded in the bank books
Adjustment Entry # 5
Account	Dr	Cr
Accrued dividend Receivable	2,000
Dividend Income		2,000
Adjustment Entry for the dividened accured receivable on Dec 31,09