Monday, January 18, 2010

Mgt101 - Solution

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Hyper Star Traders
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






....................................................

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








.....................................

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



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