ascertainment of work uncertified m s kishore amp company commenced the work on a p 568858

Aug 29, 2021 | Uncategorized

(Ascertainment of work uncertified) M/s Kishore & Company commenced the work on a particular contract on 1st. April 1997. They close their books of accounts for the year on 31st December each year. The following information is available from their costing records on 31st December 1997:

A machine costing Rs 32,000 remained in use on site for 1/5th of the year. Its working life was estimated at 5 years and scrap value at Rs 2,000. A supervisor is paid Rs 5,000 per month and had devoted one half of his time on the contract.

All other expenses were Rs 25,000. The material on site was Rs 9,000. The contract price was Rs 5,00,000. On 31st December 1997, 2/3rd of the contract was completed; however, the architect gave certificate only for Rs 2,50,000 on which 75% was paid. Prepare the contract account.

the following particulars relate to a contract undertaken by ajit engineers 568859

Aug 29, 2021 | Uncategorized

The following particulars relate to a contract undertaken by Ajit Engineers:

You are required to prepare the contract account showing profit, contractee’s account and show suitable entries in the balance sheet of the contractor.

deluxe limited undertook a contract for rs 5 00 000 on 1st july 1997 on 30th june 19 568860

Aug 29, 2021 | Uncategorized

Deluxe Limited undertook a contract for Rs 5,00,000 on 1st July 1997. On 30th June 1998 when the accounts were closed, the following details about the contract were gathered:

The above contract contained an escalation clause, which read as follows:

“In the event of prices of materials and rates of wages increase by more than 5% the contract price would be increased accordingly by 25% of the raise in the cost of materials and wages beyond 5% in each case”.

It was found that since the date of signing the agreement the prices of materials and wages rates increased by 25%. The value of the work does not take into account the effect of the above clause.

Prepare the contract account working should form part of the answer.

from the following data relating to a contract extract from the books of a company a 568861

Aug 29, 2021 | Uncategorized

From the following data relating to a contract, extract from the books of a company as on 31 3 1994, prepare contract accounts also compute the profit and the value of preparing final accounts.

You are further informed that:

1. The work on the contract commenced on 1 10 1993.
2. The wages of the workers for a week and the salary of the supervisory staff for a month were due at the end of the period Rs 3,100.
3. The company writes off depreciation at 10% p.a. on its plants; and
4. The value of materials at site on 31 3 1994 was Rs 4,200.

m s kishore amp company commenced work on a particular contract on 1st april 1990 th 568862

Aug 29, 2021 | Uncategorized

M/s Kishore & Company commenced work on a particular contract on 1st April 1990. They close their books of accounts for the year on 31st December each year. The following information is available from their closing records on 31 12 1996:

A machine costing Rs 32,000 remained in use on site for 1/5th of the year. Its working life was estimated at 5 years and scrap value at Rs 2,000. A supervisor is paid Rs 2,000 per month and had devoted one half of his time on the contract.

All other expenses were Rs 15,000. The material on site was Rs 10,000. The contract price was Rs 4,50,000. On 31st December, 2/3rd of the contract was completed. However, the architect gave certificate only for Rs 2,20,000 on which 75% was paid.

Prepare the contract account in the company’s books.

m s arun and varun undertook a contract for rs 3 00 000 for constructing a college b 568863

Aug 29, 2021 | Uncategorized

M/s Arun and Varun undertook a contract for Rs 3,00,000 for constructing a college building. The following is the information concerning the contract during the year 1997:

Prepare contract account, contractee’s account and show how the work in progress will appear in the balance sheet as on 31st December 1997.

a building contractor furnishes the following records about a contract commenced on 568866

Aug 29, 2021 | Uncategorized

A building contractor furnishes the following records about a contract commenced on 1 April 1985.

Expenses incurred on the contract up to 31st December 1985 were

A supervisor with a monthly salary of Rs 1,000 has spent about half of his time on this contract. Materials at site on 31 12 1985 were worth Rs 2,480. The machinery purchased was used for 73 days. The estimated life of the machine is 5 years and its scrap value is estimated at Rs 1,000.

The contract price is fixed at Rs 2,20,000. On 31st December 1985, two thirds of the contract was completed. Work certified was worth Rs 1,20,000 and Rs 90,000 have been paid on account. Prepare the contract account.

senthil construction company undertook a contract for constructing a building from 1 568879

Aug 29, 2021 | Uncategorized

Senthil Construction Company undertook a contract for constructing a building from 1st January 1998. The contract price was Rs 1,00,000. He incurred the following expenses.

The contract was completed on 30th June 1998 and the contract price was duly received. Provide depreciation at 20% p.a. on plant and charge indirect expenses at 20% on wages. Prepare contract account in the books of the company.

the following is the summary of transactions as on 31st december 1991 relating to a 568880

Aug 29, 2021 | Uncategorized

The following is the summary of transactions as on 31st December 1991, relating to a special contract completed during the year.

Works on cost—25% of direct wages

Office on cost—10% of prime cost

Contract price—Rs 6,000You are required to prepare a contract account keeping in view that material returned amounted to Rs 240.

the following information relates to contract no 123 you are required to prepare the 568881

Aug 29, 2021 | Uncategorized

The following information relates to contract no.123. You are required to prepare the contract account and contractee’s account assuming that the amount due from the contract was fully received.

The contract price was Rs 90,000 and the contract took 13 weeks in its completion. The value of loose tools and stores returned at the end of the period were Rs 200 and Rs 3,000, respectively. A plant was also used and returned at a value of Rs 16,000 after charging depreciation at 20%. The value of tractor was Rs 20,000 and depreciation was to be charged to the contract at 15% p.a. The administration and office expenses are to be provided at 10% on works cost.

a building contractor took a contract for the construction of a certain building on 568882

Aug 29, 2021 | Uncategorized

A building contractor took a contract for the construction of a certain building on 1st January 1994. The contract price was agreed at Rs 4,00,000. The contractor had made the following expenditure during the year. From the following further particulars, prepare a contract account for the year. Also show the amount of work in progress, which will be shown in the balance sheet of the contractor

a undertook several large contracts and his ledger contained therefore a separate ac 568883

Aug 29, 2021 | Uncategorized

A undertook several large contracts and his ledger contained therefore a separate account for each contract. On 31 12 1991, the account of contract number 22 showed the following amounts as expended thereon.

The contract was for Rs 15,00,000 and up to 31 12 1991 Rs 6,00,000 had been received in cash which represented 80% of work certified.

The materials at site unconsumed were valued at Rs 15,000. The contract plant was to be depreciated by Rs 16,000.Prepare the contract account showing that profits thereon have been earned to date.

a firm of builders carrying on large contracts kept in a contract ledger separate ac 568884

Aug 29, 2021 | Uncategorized

A firm of builders, carrying on large contracts, kept in a contract ledger separate accounts for each contract. On 30th June 1994, the following was shown as being the expenditure in connection with a contract:

The contract which had commenced on 1st January 1994 was for Rs 3,00,000 and the amount certified by the architect, after a deduction of 20% retention money, was Rs 1,20,800, the work being certified up to 30th June 1994.

The materials on the site at the date were valued at Rs 9,858. A contract plant ledger was also kept in which depreciation was dealt with monthly, the amount debited in respect of the plant on the contract up to 30th June 1965 was Rs 1,130.

You are required to prepare an account showing the profit on the contract up to 30th June 1994.

m s pari amp company obtained a contract for building a factory for rs 10 00 000 568885

Aug 29, 2021 | Uncategorized

M/s Pari & Company obtained a contract for building a factory for Rs 10,00,000. Building operations started on 1st April 1984 and at the end of March 1985, they received from the contractee a sum of Rs 3,90,000 being 75% of the amount due on surveyor’s certificate. The following additional information is given from the books of Pari & Company Limited.

Plant to be depreciated at 10%. You are required to prepare an account showing profit and loss on contract as on 31 3 1985 and the amount of profit the company would be justified in taking to the credit of profit and loss account for the year.

ashok builders undertook several large contracts and their ledger therefore containe 568886

Aug 29, 2021 | Uncategorized

Ashok Builders undertook several large contracts and their ledger therefore, contained a separate account for each contract. On June 30th 1994, the account of contract number 75 showed the following amounts as expended thereon:

The contract was for Rs 7,50,000 and up to 30th June 1994 Rs 2,90,000 had been received in cash which represented 80% of work certified by the architect. The materials on site unconsumed were valued at Rs 7,500. The depreciation on plant worked out to Rs 8,000.

Prepare the contract account showing what profit therein had been carried to date. Also state what amount should, in your opinion, be taken to profit and loss account of the period.

the contract ledger of a company showed the following expenditure on account of a co 568887

Aug 29, 2021 | Uncategorized

The contract ledger of a company showed the following expenditure on account of a contract on 31st December.

The contract was commenced on 1st January and the contract price was Rs 3,00,000; cash received on account to date was Rs 1,20,000 representing 80% of the work certified the remaining 20% being retained until completion. The value of materials on hand was Rs 2,000 and the cost of work finished but not certified as at 31st December was Rs 3,000.

Prepare an account in respect of the contract, showing the price to date, assuming depreciation on plant at 10 per cent annum and state the proportion of profit the company would be justified in taking to the credit of profit and loss account.

a firm of large contractors kept separate accounts for each contract on 31 12 1992 t 568888

Aug 29, 2021 | Uncategorized

A firm of large contractors kept separate accounts for each contract. On 31.12.1992 the following were shown as being the expenditure in connection with contract number 101:

The contract which had commenced on 1 7 1992 was for Rs 15,00,000 and the amount certified by the architect, after deduction of 20% retention money was Rs 6,04,000, the work being certified till 31 12 1992. The materials on site on that date were valued at Rs 49,290. The depreciation on plant in respect of this contract till 31 12 1992 was Rs 5,650.

Prepare a contract account, showing the profit on the contract up to 31 12 1992.

a undertook several large contracts and his ledger therefore contained a separate ac 568889

Aug 29, 2021 | Uncategorized

A undertook several large contracts, and his ledger, therefore, contained a separate account for each contract on 30th June. The account of contract number 51 showed the following as expended thereon.

The contract was for Rs 7,50,000; and up to 30th June Rs 2,90,000 had been received in cash which represented the full amount certified less 20% retention money. The materials on site unconsumed were valued at Rs 7,500. The contracting plant was to be depreciated by Rs 8,000.

Prepare the contract account showing the profit that had been earned to date. Also state what amount should, in your opinion, be taken to the profit and loss account of the period.

m s anil amp company a firm of building contractors undertook a contract for constru 568890

Aug 29, 2021 | Uncategorized

M/s Anil & Company, a firm of building contractors undertook a contract for construction of a commercial complex on 1st January 1997. The following was the expenditure on the contract for Rs 9,00,000.

Cash received on contract to 31st December 1997 amounted to Rs 3,84,000 being 80% of work certified.

Of the plant and materials charged to the contract, plant which cost Rs 9,000 and materials costing Rs 7,500 were lost.

On 31st December 1997, plant costing Rs 6,000 was returned to stores. The cost of work done but uncertified was Rs 3,000 and materials costing Rs 6,900 were in hand. Charge 15% depreciation on plant. Reserve 1/3rd profits earned and prepare contract account from the above particulars.

from the following figures prepare a reconciliation statement 568836

Aug 29, 2021 | Uncategorized

From the following figures prepare a reconciliation statement:

from the following details of small tools ltd compute the profit in financial accoun 568837

Aug 29, 2021 | Uncategorized

From the following details of Small Tools Ltd, compute the profit in financial accounts as well as in cost accounts and reconcile profit between cost and financial accounts showing clearly the reasons for the variation of the two profit figures:

In cost accounts:

Manufacturing overheads recovered at 300% on direct wages.

Selling overheads recovered Rs 1,500

Distribution overheads recovered Rs 700.

the following is the summarized version of trading and profit and loss account of co 568838

Aug 29, 2021 | Uncategorized

The following is the summarized version of trading and profit and loss account of Continental Enterprises Limited for the year ended 31 March 1998.

During the year, 6,000 units were manufactured and 4,800 of these were sold.

The costing records show that works overheads have been estimated at Rs 3 per unit produced and administration overheads at Rs 1.50 per unit produced. The costing books show a profit of Rs 11,040.

Prepare a statement a cost and profit and reconcile the profit as per cost accounts and financial books.

the cost sheet shows the cost of materials as rs 26 per unit and the labour cost as 568839

Aug 29, 2021 | Uncategorized

SV Ltd. has furnished you the following information from the financial books for the year ended 31 March 1998.

Profit and loss account for the year ended 31 March 1998

The cost sheet shows the cost of materials as Rs 26 per unit and the labour cost as Rs 15 per unit. The factory overheads are absorbed at 60% of labour cost and administration overheads at 20% of factory cost. Selling expenses are charged at Rs 6 per unit. The opening stock of finished goods is valued at Rs 45 per unit.

You are required to prepare:

1. A statement showing profit as per cost accounts for the year ended 31 March 1998.
2. Statement showing the reconciliation of profit disclosed in cost accounts with the profit shown in the financial accounts.

how much of profit if any would you allow to be considered in the following case 568840

Aug 29, 2021 | Uncategorized

How much of profit, if any, would you allow to be considered in the following case

the contract ledger of a company showed the following expenditure on account of cont 568842

Aug 29, 2021 | Uncategorized

The contract ledger of a company showed the following expenditure on account of contract number 12345 on 31st March 1998.

The contract commenced on 1st April 1997 and the contract price is Rs 8,00,000. The value of work certified by the architect is Rs 4,30,000 of which 80% has been received in cash to date. The value of material on hand is Rs 9,000 and the work certified is Rs 8,000.

Assuming depreciation on plant at 10% p.a., prepare the contract account showing the profit the firm would be justified in taking to the credit of profit and loss account of the year.

a contractor obtained a contract for rs 6 00 000 on 1st january 1988 the expenses in 568843

Aug 29, 2021 | Uncategorized

A contractor obtained a contract for Rs 6,00,000 on 1st January 1988. The expenses incurred during the year ended 31st December 1988 were as under.

The plant, specially installed for the contract, worth Rs 45,000 was returned to the stores subject to a depreciation of 20%. Materials at site on 31 12 1988 were valued at Rs 24,000.

The contractor had received Rs 3,60,000 in cash up to 31 12 1988, representing 80% of the work certified. Work uncertified was estimated at Rs 4,000.

Prepare the contract account, showing the profit for the year. Also show how the value of work in progress would appear in the balance sheet as on 31st December 1988.

on 1st january a undertook a contract for rs 5 00 000 he incurred the following expe 568844

Aug 29, 2021 | Uncategorized

On 1st January, A undertook a contract for Rs 5,00,000. He incurred the following expenses during the year

Of the plant and materials charged to the contract, the plant which cost Rs 1,500 and the materials costing Rs 1,000 were lost. Some of the materials costing Rs 1,500 were sold for Rs 2,000. On 31st December, the plant, which cost Rs 400, was returned to the stores, and a part of the plant, which cost Rs 150, was damaged, rendering itself useless.

The work certified was Rs 2,20,000 and 80% of the same was received in cash. The cost of work done, but uncertified was Rs 10,000. Charge 10% p.a. depreciation on plant and prepare the contract account for the year ended 31st December, by transferring to the profit and loss account the portion of the profit, if any, which you think is reasonable. Show also the particulars relating to the contract in the balance sheet of the contractor as on 31st December.

m s anand associates commenced the work on a particular contract on 1st april 1994 t 568845

Aug 29, 2021 | Uncategorized

M/s Anand Associates commenced the work on a particular contract on 1st April 1994. They close their books of accounts for the year on 31st December each year. The following information is available from their costing records on 31st December 1994.

A machine costing Rs 40,000 remained in use on site for 1/5th of the year. Its working life was estimated at 5 years and scrap value at Rs 1,500. A supervisor is paid Rs 1,500 per month and he had devoted one half of his time on the contract.

All other expenses were Rs 8,000. The materials on site were Rs 1,500. The contract price was Rs 3,00,000. On 31st December 1994, 2/3rd of the contract was completed; however, the architect gave a certificate only for Rs 1,80,000 on which 80% was paid. Prepare the contract account.

a company of contractors began to trade on 1st january 1994 during 1994 the company 568846

Aug 29, 2021 | Uncategorized

The following balances were extracted from the books of a building contractor on 31st March 1976.

The work was commenced on 1st April 1975 and the contract price agreed at Rs 2,45,000. Prepare contract account for the year, providing for depreciation of plant at 25%. Calculate the profit or loss on the contract to date and make such provision in the contract account, as you consider desirable. Set out also the contractor’s balance sheet so far as it relates to the contract.

the following particulars relating to contract lsquo a rsquo are obtained at the yea 568847

Aug 29, 2021 | Uncategorized

The following particulars relating to contract ‘A’ are obtained at the year end. Date of commencement is April 1.

You are required to show:

1. Contract account
2. Contractee’s account
3. Extracts from the balance sheet as on 31st December, clearly showing the calculation of work in progress.

cash received on account to 31st december 1997 amounted to rs 2 60 000 being 80 of w 568848

Aug 29, 2021 | Uncategorized

The following was the expenditure on a contract for Rs 6,00,000 commenced in January, 1997:

Cash received on account to 31st December 1997 amounted to Rs 2,60,000 being 80% of work certified; the value of materials in hand on 31 12 1997 was Rs 25,000. Prepare the contract account for 1997 showing the profit to be credited to the year’s profit and loss account. Plant is to be depreciated at 10%.

prepare the contract account for the year 1994 showing the amount of profit that may 568849

Aug 29, 2021 | Uncategorized

The following are the particulars relating to a contract, which was begun on 1st January 1994:

Prepare the contract account for the year 1994 showing the amount of profit that may be taken to the credit of the profit and loss account of the year. Also show the amount of the work in progress, as it appears in the balance sheet of the year.

a company undertook a contract for construction of a large building complex the cons 568850

Aug 29, 2021 | Uncategorized

A company undertook a contract for construction of a large building complex. The construction work commenced on 1st April 1997 and the following data are available for the year ended 31st March 1998.

The contractors own a plant, which originally cost Rs 20,00,000, has been continuously in use in this contract throughout the year. The residual value of the plant after 5 years of life is expected to be Rs 5,00,000. Straight line method of depreciation is in use.

As on 31st March 1998, the direct wages due and payable amounted to Rs 3,00,000 and the materials at site were estimated at Rs 3,00,000.

Required:

1. Prepare the contract account for the year ended 31st March 1998.
2. Show the calculation of profit to be taken to the profit and loss account of the year.
3. Show the relevant balance sheet entries.

the following is the summary of the entries in a contract ledger as on 31st december 568851

Aug 29, 2021 | Uncategorized

The following is the summary of the entries in a contract ledger as on 31st December 1994 in respect of contract no. 51:

Further information is as follows:

1. The amount that accrued as on 31st December 1994 were wages: Rs 900 and direct expenses: Rs 1,200.
2. The cost of the work uncertified included: materials: Rs 2,600, wages: Rs 1,000 and expenses: Rs 1,500.
3. Rs 2,000 worth of plant was sold for Rs 3,000 and Rs 3,000 worth of materials were destroyed by the fire.
4. Rs 5,000 worth of plant was sold for Rs 3,000 and materials costing Rs 5,000 were sold for Rs 6,000.
5. Depreciation till 31st December 1994 on plant was Rs 10,000.
6. Materials at site were valued at Rs 5,000.
7. Cash received from the contractee was Rs 60,000 being 80% of the work certified.
8. Contract price was Rs 1,00,000.

Show the contract account and work in progress account. Show the same in the balance sheet.

a firm of building contractors began to trade on 1st april 1997 the following was th 568852

Aug 29, 2021 | Uncategorized

A firm of building contractors began to trade on 1st April 1997. The following was the expenditure on the contract for Rs 3,00,000: Materials issued to contract: Rs 50,000; Plant used for contract: Rs 15,000; Wages incurred: Rs 75,000; Other expenses incurred: Rs 2,000.

Cash received on account to 31st March 1998 amounted to Rs 1,28,000 being 80% of the work certified. Of the plant and materials charged to the contract, plant which cost Rs 3,000 and materials which cost Rs 2,500 were lost. On 31st March 1998 plant which cost Rs 2,000 was returned to store, the cost of work done but uncertified was Rs 1,000 and materials costing Rs 2,300 were in hand on site. Charge 15% depreciation on plant, and take to the profit and loss account 2/3rd of the profit received. Prepare the contract account, contract’s account and balance sheet from the above particulars.

a firm of building contractors began to trade on 1st april 1996 the following was th 568853

Aug 29, 2021 | Uncategorized

A firm of building contractors began to trade on 1st April 1996. The following was the expenditure on the contract for Rs 3,00,000.

Cash received on account to 31st March 1997 amounted to Rs 1,28,000 being 80% of the work certified. Of the plant and materials charged to the contract, plant which cost Rs 3,000 and materials which cost Rs 2,500 were lost. On 31st March 1997 plant which cost Rs 2,000 were returned to stores. The cost of work done but uncertified was Rs 1,000 and materials costing Rs 2,300 were in hand on site.

Charge 15% depreciation on plant, and take to the profit and loss account 2/3rd of the profit received. Prepare a contract account, contractee’s account and extracts from balance sheet from the above particulars.

Hint: As instructed, 2/3rd profit is taken to profit and loss account but it is restricted on cash received basis, i.e. 80%.

construction limited is engaged on two contracts a and b during the year the followi 568854

Aug 29, 2021 | Uncategorized

Construction Limited is engaged on two contracts A and B during the year. The following particulars are obtained at the year end (December 31):

During the period materials amounting to Rs 9,000 have been transferred from contract A to contract B. You are required to show: (a) contract accounts, (b) contractures’ accounts, and (c) extract from balance sheet as on December 31, clearly showing the calculation of work in progress.

two contracts that commenced on 1st january and 1st july 1994 respectively were unde 568855

Aug 29, 2021 | Uncategorized

Two contracts that commenced on 1st January and 1st July 1994, respectively, were undertaken by a contractor and his accounts on 31st December 1994 showed the following position

The plants were installed on the date of commencement of each contract; depreciation thereon is to be taken at 10% p.a.

Prepare the contract’s account in the tabular form and ascertain the profit or loss to be taken to profit and loss account.

the following trial balance was extracted on 31st december 1997 from the books of sw 568856

Aug 29, 2021 | Uncategorized

The following trial balance was extracted on 31st December 1997 from the books of Swastik Company Limited contractors:

Contract 7 was begun on 1st January 1997. The contract price is Rs 24,00,000 and the customer has so far paid Rs 12,80,000 being 80% of the work certified.

The cost of the work done since certification is estimated at Rs 25,000. On 31st December 1997, after the above trial balance was extracted, machinery costing Rs 32,000 was returned to stores, and materials when at site were valued at Rs 30,000.

Provision is to be made for direct labour due Rs 6,000 and for depreciation of all machinery at 12½% on cost.

You are required to prepare: (a) the contract account, (b) a statement of profit, if any, to be properly credited to profit and loss account for 1997, and (c) the balance sheet of Swastik Company Limited as on 31st December.

prepare the statement of cash flows for the year ended december 31 2012 using the in 568439

Aug 29, 2021 | Uncategorized

Preparing a Statement of Cash Flows (Indirect Method) Deep Waters Company was started several years ago by two diving instructors. The company’s comparative balance sheets and income statement are presented below, along with additional information.

Additional Data:

a. Prepaid expenses relate to rent paid in advance.

b. Other expenses were paid in cash.

c. Purchased equipment for $400 cash at the end of 2012 to be used starting in 2013.

d. An owner contributed capital by paying $600 cash in exchange for the company’s stock.

Required:

Prepare the statement of cash flows for the year ended December 31, 2012, using the indirect method.

what do you think was gibraltar management rsquo s plan for the use of the cash gene 568440

Aug 29, 2021 | Uncategorized

Reporting and Interpreting Cash Flows from Investing and Financing Activities with Discussion of Management Strategy Gibraltar Industries is a Buffalo, New York–based manufacturer of high value added steel products. In a recent year, it reported the following activities:

Required:

1. Based on this information, present the cash flows from investing and financing activities sections of the cash flow statement.

2. Compute the capital acquisitions ratio. What does the ratio tell you about Gibraltar’s ability to finance purchases of property, plant, and equipment with cash provided by operating activities?

3. What do you think was Gibraltar management’s plan for the use of the cash generated by selling other equity investments?

what would be the effect of these transactions on the capital acquisitions ratio how 568441

Aug 29, 2021 | Uncategorized

Reporting Noncash Transactions on the Statement of Cash Flows; Interpreting the Effect on the Capital Acquisitions Ratio An analysis of Courtney Corporation’s operational asset accounts provided the following information:

a. Acquired a large machine that cost $36,000, paying for it by giving a $15,000, 12 percent interest bearing note due at the end of two years and 500 shares of its common stock, with a par value of $10 per share and a market value of $42 per share.

b. Acquired a small machine that cost $12,700. Full payment was made by transferring a tract of land that had a book value of $12,700.

Required:

1. Show how this information should be reported on the statement of cash flows.

2. What would be the effect of these transactions on the capital acquisitions ratio? How might these transactions distort one’s interpretation of the ratio?

what were the major reasons that huanca rsquo s was able to report a net loss but po 568443

Aug 29, 2021 | Uncategorized

Reporting and Interpreting Cash Flows from Operating Activities from an Analyst’s Perspective (Direct Method) Refer to the following summarized income statement and additional selected information for Huanca , Inc.:

Required:

1. Based on this information, compute cash flow from operating activities using the direct method. Assume that prepaid expenses and accrued liabilities relate to other expense.

2. What were the major reasons that Huanca’s was able to report a net loss but positive cash flow from operations? Why are the reasons for the difference between cash flows from operations and net income important to financial analysts?

prepare the statement of cash flows using the indirect method for the year ended dec 568444

Aug 29, 2021 | Uncategorized

Preparing a Statement of Cash Flows (Indirect Method) – Hi Def Films , Inc., is developing its annual financial statements at December 31, 2012. The statements are complete except for the statement of cash flows. The completed comparative balance sheets and income statement are summarized as follows:

Additional Data:

a. Bought equipment for cash, $59,250.

b. Paid $11,500 on the long term note payable.

c. Issued new shares of stock for $32,600 cash.

d. Dividends of $12,650 were declared and paid.

e. Other expenses all relate to wages.

f. Accounts payable includes only inventory purchases made on credit.

Required:

1. Prepare the statement of cash flows using the indirect method for the year ended December 31, 2012.

2. Based on the cash flow statement, write a short paragraph explaining the major sources and uses of cash by Hi Def Films during 2012.

prepare the statement of cash flows for the year ended december 31 2013 using the in 568445

Aug 29, 2021 | Uncategorized

Preparing a Statement of Cash Flows (Indirect Method) BG Wholesalers is developing its annual financial statements at December 31, 2013. The statements are complete except for the statement of cash flows. The completed comparative balance sheets and income statement are summarized:

Additional Data:

a. Bought equipment for cash, $21,000.

b. Paid $6,000 on the long term note payable.

c. Issued new shares of stock for $16,000 cash.

d. No dividends were declared or paid.

e. Other expenses included depreciation, $5,000; wages, $20,000; taxes, $6,000; other, $6,800.

f. Accounts payable includes only inventory purchases made on credit. Because there are no liability accounts relating to taxes or other expenses, assume that these expenses were fully paid in cash.

Required:

1. Prepare the statement of cash flows for the year ended December 31, 2013, using the indirect method.

2. Based on the cash flow statement, write a short paragraph explaining the major sources and uses of cash during 2013.

prepare the cash flows from operating activities section of the statement of cash fl 568447

Aug 29, 2021 | Uncategorized

Comparing Cash Flows from Operating Activities (Direct and Indirect Methods) Alpha Company’s accountants have just completed the income statement and balance sheet for the year and have provided the following information (dollars in thousands):

Other Data:

The company issued $20,000, 8 percent bonds payable during the year.

Required:

1. Prepare the cash flows from operating activities section of the statement of cash flows using the direct method.

2. Prepare the cash flows from operating activities section of the statement of cash flows using the indirect method.

prepare the statement of cash flows for the year ended december 31 2011 using the in 568448

Aug 29, 2021 | Uncategorized

Preparing a Statement of Cash Flows with Gain on Sale of Equipment ( Indirect Method) XS Supply Company is developing its annual financial statements at December 31, 2011. The statements are complete except for the statement of cash flows. The completed comparative balance sheets and income statement are summarized:

Additional Data:

a. Bought equipment for cash, $31,000. Sold equipment with original cost of $10,000, accumulated depreciation of $7,000, for $4,000 cash .

b. Paid $6,000 on the long term note payable.

c. Issued new shares of stock for $16,000 cash.

d. No dividends were declared or paid.

e. Other expenses included depreciation, $12,000; wages, $13,000; taxes, $6,000; and other, $7,800.

f. Accounts payable includes only inventory purchases made on credit. Because there are no liability accounts relating to taxes or other expenses, assume that these expenses were fully paid in cash.

Required:

1. Prepare the statement of cash flows for the year ended December 31, 2011, using the indirect method.

2. Evaluate the statement of cash flows.

prepare a statement of cash flows spreadsheet using the indirect method to report ca 568449

Aug 29, 2021 | Uncategorized

Preparing Statement of Cash Flows Spreadsheet, Statement of Cash Flows, and Schedules Using Indirect Method Forrest Company is developing its annual financial statements at December 31, 2013. The statements are complete except for the statement of cash flows. The completed comparative balance sheets and income statement are summarized as follows:

Additional Data:

a. Bought fixed assets for cash, $10,000.

b. Paid $10,000 on the long term note payable.

c. Sold unissued common stock for $20,000 cash.

d. Declared and paid a $3,800 cash dividend.

e. Incurred expenses that included depreciation, $6,000; wages, $10,000; taxes, $3,000; and other, $8,000.

Required:

1. Prepare a statement of cash flows spreadsheet using the indirect method to report cash flows from operating activities.

2. Prepare the statement of cash flows.

3. Prepare a schedule of noncash investing and financing activities if necessary.

prepare the statement of cash flows using the indirect method for the year ended dec 568450

Aug 29, 2021 | Uncategorized

Preparing a Statement of Cash Flows (Indirect Method) Ingersol Construction Supply Company is developing its annual financial statements at December 31, 2012. The statements are complete except for the statement of cash flows. The completed comparative balance sheets and income statement are summarized as follows:

Additional Data:

a. Bought equipment for cash, $21,000.

b. Paid $6,000 on the long term note payable.

c. Issued new shares of stock for $16,000 cash.

d. Dividends of $15,000 were declared and paid in cash.

e. Other expenses included depreciation, $5,000; wages, $20,000; taxes, $6,000; and other, $6,800.

f. Accounts payable includes only inventory purchases made on credit. Because there are no liability accounts relating to taxes or other expenses, assume that these expenses were fully paid in cash.

Required:

1. Prepare the statement of cash flows using the indirect method for the year ended December 31, 2012.

2. Evaluate the statement of cash flows.

prepare the statement of cash flows for the year ended december 31 2013 using the in 568451

Aug 29, 2021 | Uncategorized

Preparing a Statement of Cash Flows (Indirect Method) Audio House , Inc., is developing its annual financial statements at December 31, 2013. The statements are complete except for the statement of cash flows. The completed comparative balance sheets and income statement are summarized as follows:

Additional Data:

a. Bought equipment for cash, $60,000.

b. Borrowed an additional $11,000 and signed an additional long term note payable.

c. Issued new shares of stock for $5,000 cash.

d. Dividends of $5,000 were declared and paid in cash.

e. Other expenses included depreciation, $15,000; wages, $20,000; and taxes, $25,000.

f. Accounts payable includes only inventory purchases made on credit.

Required:

1. Prepare the statement of cash flows for the year ended December 31, 2013, using the indirect method.

2. Based on the cash flow statement, write a short paragraph explaining the major sources and uses of cash during 2013.

has the company paid cash dividends during the last three years how do you know 568454

Aug 29, 2021 | Uncategorized

Finding Financial Information Refer to the financial statements of Urban Outfitters given in Appendix C at the end of this book.

Required:

1. Does Urban Outfitters use the direct or indirect method to report cash flows from operating activities?

2. What amount of tax payments did the company make during the most recent reporting year? ( Hint: The statement of cash flows may be helpful to answer this question.)

3. Explain why the “share based compensation” and “depreciation and amortization” items were added in the reconciliation of net income to net cash provided by operating activities.

4. Has the company paid cash dividends during the last three years? How do you know?

5. What was free cash flow for the year ended January 31, 2009?

compare the capital acquisitions ratio for both companies to the industry average ho 568455

Aug 29, 2021 | Uncategorized

Comparing Companies within an Industry Refer to the financial statements of American Eagle Outfitters (Appendix B) and Urban Outfitters (Appendix C) and the Industry Ratio Report (Appendix D) at the end of this book.

Required:

1. Compute the quality of income ratio for both companies for the most recent reporting year. Which company has a better quality of income ratio?

2. Compare the quality of income ratio for both companies to the industry average. Are these companies producing more or less cash from operating activities relative to net income than the average company in the industry?

3. Compute the capital acquisitions ratio for both companies for the most recent reporting year. Compare their abilities to finance purchases of property, plant, and equipment with cash provided by operating activities.

4. Compare the capital acquisitions ratio for both companies to the industry average. How does each company’s ability to finance the purchase of property, plant, and equipment with cash provided by operating activities compare with that of other companies in the industry?

as a financial analyst recently hired by a major investment bank you have been asked 568456

Aug 29, 2021 | Uncategorized

Making a Decision as a Financial Analyst: Analyzing Cash Flow for a New Company Carlyle Golf, Inc., was formed in September of last year. The company designs, contracts for the manufacture of, and markets a line of men’s golf apparel. A portion of the statement of cash flows for Carlyle follows:

Management expects a solid increase in sales in the near future. To support the increase in sales, it plans to add $2.2 million to inventory. The company did not disclose a sales forecast. At the end of the current year, Carlyle had less than $1,000 in cash. It is not unusual for a new company to experience a loss and negative cash flows during its start up phase.

Required:

As a financial analyst recently hired by a major investment bank, you have been asked to write a short memo to your supervisor evaluating the problems facing Carlyle. Emphasize typical sources of financing that may or may not be available to support the expansion.

native co ltd suffered a loss of rs 25 000 as per the financial accounts on comparis 568829

Aug 29, 2021 | Uncategorized

Native Co. Ltd suffered a loss of Rs 25,000 as per the financial accounts. On comparison with its costing records for the same year, the following differences were observed: Prepare a reconciliation statement, with the help of the differences.

the profit as per cost accounts in 1987 was rs 1 65 300 the following details are as 568830

Aug 29, 2021 | Uncategorized

The profit as per cost accounts in 1987 was Rs 1,65,300. The following details are ascertained on comparison of the cost and financial accounts:

You are required to draw a reconciliation statement.

from the following profit and loss account and additional information given prepare 568831

Aug 29, 2021 | Uncategorized

From the following profit and loss account and additional information given, prepare: (a) a cost sheet and (b) reconciliation statement Profit and loss account

In costing, opening materials were shown at Rs 7,000. The factory overheads were absorbed at Rs 14,000. Administration overhead charges 10% of works cost and selling overheads was 10% of sales.

Hint: Closing materials are shown in costing at the same value as in financial accounts as it cannot be found separately.

the amounts charged in the cost accounts in respect of overhead charges are as follo 568832

Aug 29, 2021 | Uncategorized

Financial profit and loss account of a manufacturing Company for the year ended 31 March 1998 is as follows:

To net profit shown by the cost accounts for the year is Rs 16,270. Upon detailed comparison of the two sets of accounts it is found that:

1. The amounts charged in the cost accounts in respect of overhead charges are as follows: works overhead charges = Rs 11,500; office overhead charges = Rs 4,590; selling and distribution expenses = Rs 6,640.
2. No charge has been made in the cost accounts in respect of debenture interest.

You are required to reconcile the profits shown by the two sets of accounts.

Hint: [Add: Over absorption of administration overheads Rs 90 and S and D overheads Rs 140. Less: Under recovery of works expenses Rs 500 and debenture interest Rs 1,000]

in the reconciliation between cost and financial accounts one of the areas of differ 568833

Aug 29, 2021 | Uncategorized

In the reconciliation between cost and financial accounts, one of the areas of differences is different methods of stock valuation used. State with reasons, in each of the following circumstances whether costing profit will be higher or lower than the financial profit:

a company maintains separate cost and financial accounts and the costing profit for 568834

Aug 29, 2021 | Uncategorized

A company maintains separate cost and financial accounts, and the costing profit for the year 1998 differed to that revealed in the financial accounts, which was shown as Rs 50,000.

The following information is available:

1. Dividend of Rs 1,000 was received by the company.
2. A machine with net book value of Rs 10,000 was sold during the year for Rs 8,000.
3. The company charged 10% interest on its opening capital employed of Rs 80,000 to its process costs.

You are required to determine the profit figure which was shown in the cost accounts.

determine the cash flow from the sale of property for each year that would be report 568435

Aug 29, 2021 | Uncategorized

Computing and Reporting Cash Flow Effects of Sale of Plant and Equipment During two recent years Perez Construction, Inc., disposed of the following plant and equipment:

Required:

1. Determine the cash flow from the sale of property for each year that would be reported in the investing activities section of the cash flow statement.

2. Perez uses the indirect method for the operating activities section of the cash flow statement. What amounts related to the sales would be added or subtracted in the computation of Net Cash Flows from Operating Activities for each year?

what amount related to the sales would be added or subtracted in the computation of 568436

Aug 29, 2021 | Uncategorized

Computing and Reporting Cash Flow Effects of the Sale of Equipment During the period, Wong Company sold some excess equipment at a loss. The following information was collected from the company’s accounting records:

Required:

1. For the equipment that was sold, determine its original cost, its accumulated depreciation, and the cash received from the sale. (Use the equipment and accumulated depreciation T accounts to infer the book value of the equipment sold.)

2. Wong Company uses the indirect method for the Operating Activities section of the cash flow statement. What amount related to the sale would be added or subtracted in the computation of Net Cash Flows from Operating Activities?

3. What amount related to the sales would be added or subtracted in the computation of Net Cash Flows from Investing Activities?

what were the major reasons that pepsico rsquo s quality of income ratio did not equ 568437

Aug 29, 2021 | Uncategorized

Analyzing Cash Flows from Operating Activities; Interpreting the Quality of Income Ratio A recent annual report for PepsiCo contained the following information for the period (dollars in millions):

Required:

1. Compute cash flows from operating activities for PepsiCo using the indirect method.

2. Compute the quality of income ratio.

3. What were the major reasons that PepsiCo’s quality of income ratio did not equal 1.0?

based on this information present the cash flows from investing and financing activi 568438

Aug 29, 2021 | Uncategorized

Reporting Cash Flows from Investing and Financing Activities Oering’s Furniture Corporation is a Virginia based manufacturer of furniture. In a recent year, it reported the following activities:

Required:

Based on this information, present the cash flows from investing and financing activities sections of the cash flow statement .

indicate whether each item listed below is a variable v fixed f or mixed m cost and 568010

Aug 29, 2021 | Uncategorized

Indicate whether each item listed below is a variable (V), fixed (F), or mixed (M) cost and whether it is a product or service (PT) cost or a period (PD) cost. If some items have alternative answers, indicate the alternatives and the reasons for them.

a. Wages of forklift operators who move finished goods from a central warehouse

to the loading dock.

b. Paper towels used in factory restrooms.

c. Insurance premiums paid on the headquarters of a manufacturing company.

d. Columnar paper used in an accounting firm.

e. Cost of labels attached to shirts made by a company.

f. Wages of factory maintenance workers.

g. Property taxes on a manufacturing plant.

h. Salaries of secretaries in a law firm.

i. Freight costs of acquiring raw materials from suppliers.

j. Cost of wax to make candles.

k. Cost of radioactive material used to generate power in a nuclear power plant.

the company incurredthe following costs to produce 2 000 caps last month 568013

Aug 29, 2021 | Uncategorized

Malley Company produces baseball caps. The company incurredthe following costs to produce 2,000 caps last month:

a. What did each cap component cost on a per unit basis?

b. What is the probable type of behavior that each of the costs exhibits?

c. The company expects to produce 2,500 caps this month. Would you expect each type of cost to increase or decrease? Why? Why can’t the total cost of 2,500 caps be determined?

if the balance in prepaid expenses has increased during the year what action should 568409

Aug 29, 2021 | Uncategorized

If the balance in prepaid expenses has increased during the year, what action should be taken on the statement of cash flows when following the indirect method, and why?

a. The change in the account balance should be subtracted from net income because the net increase in prepaid expenses did not impact net income but did reduce the cash balance.

b. The change in the account balance should be added to net income because the net increase in prepaid expenses did not impact net income but did increase the cash balance.

c. The net change in prepaid expenses should be subtracted from net income to reverse the income statement effect that had no impact on cash.

d. The net change in prepaid expenses should be added to net income to reverse the income statement effect that had no impact on cash.

indicate whether each item is disclosed in the operating activities o investing acti 568417

Aug 29, 2021 | Uncategorized

Matching Items Reported to Cash Flow Statement Categories (Indirect Method) MillerCoors Brewing Company is the world’s fifth largest brewer. In the United States, its tie to the magical appeal of the Rocky Mountains is one of its most powerful trademarks. Some of the items included in its recent annual consolidated statement of cash flows presented using the indirect method are listed here. Indicate whether each item is disclosed in the Operating Activities (O), Investing Activities (I), or Financing Activities (F) section of the statement or use (NA) if the item does not appear on the statement. ( Note: This is the exact wording used on the actual statement.)

1. Purchase of stock. [This involves repurchase of the company’s own stock.]

2. Principal payment on long term debt.

3. Proceeds from sale of properties.

4. Inventories (decrease).

5. Accounts payable (decrease).

6. Depreciation, depletion, and amortization.

indicate whether each item is disclosed in the operating activities o investing acti 568419

Aug 29, 2021 | Uncategorized

Matching Items Reported to Cash Flow Statement Categories (Direct Method) Lion Nathan, brewer of XXXX, Toohey’s, and other well known Australian brands, has net revenue of more than $2 billion (Australian). Some of the items included in its recent annual consolidated statement of cash flows presented using the direct method are listed here. Indicate whether each item is disclosed in the Operating Activities (O), Investing Activities (I), or Financing Activities (F) section of the statement or use (NA) if the item does not appear on the statement. ( Note: This is the exact wording used on the actual statement.)

1. Receipts from customers.

2. Dividends paid.

3. Payment for share buy back.

4. Proceeds from sale of property, plant, and equipment.

5. Repayments of borrowings (bank debt).

6. Net interest paid.

some of the items included in its recent annual consolidated statement of cash flows 568424

Aug 29, 2021 | Uncategorized

Matching Items Reported to Cash Flow Statement Categories (Indirect Method) Reebok International Ltd. is a global company that designs and markets sports and fitness products, including footwear, apparel, and accessories. Some of the items included in its recent annual consolidated statement of cash flows presented using the indirect method are listed here. Indicate whether each item is disclosed in the Operating Activities (O), Investing Activities (I), or Financing Activities (F) section of the statement or (NA) if the item does not appear on the statement. ( Note: This is the exact wording used on the actual statement.)

1. Dividends paid.

2. Repayments of long term debt.

3. Depreciation and amortization.

4. Proceeds from issuance of common stock to employees.

5. [Change in] Accounts payable and accrued expenses.

6. Cash collections from customers.

7. Net repayments of notes payable to banks.

8. Net income.

9. Payments to acquire property and equipment.

10. [Change in] Inventory.

some of the items included in its recent annual consolidated statement of cash flows 568425

Aug 29, 2021 | Uncategorized

Matching Items Reported to Cash Flow Statement Categories (Direct Method) The Australian company BHP Billiton is the world’s biggest mining company. Some of the items included in its recent annual consolidated statement of cash flows presented using the direct method are listed here. Indicate whether each item is disclosed in the Operating Activities (O), Investing Activities (I), or Financing Activities (F) section of the statement or (NA) if the item does not appear on the statement. ( Note: This is the exact wording used on the actual statement.)

1. Proceeds from sale of property, plant, and equipment.

2. Interest received.

3. Repayments of loans.

4. Income taxes paid.

5. Proceeds from ordinary share [stock] issues.

6. Dividends paid.

7. Payments in the course of operations.

8. Receipts from customers.

9. Payments for property, plant, and equipment.

10. Net income.

for each of the following firstyear transactions indicate whether net cash inflows o 568426

Aug 29, 2021 | Uncategorized

Determining Cash Flow Statement Effects of Transactions Stanley Furniture Company is a Virginia based furniture manufacturer. For each of the following firstyear transactions, indicate whether net cash inflows (outflows) from operating activities (NCFO), investing activities (NCFI), or financing activities (NCFF) are affected and whether the effect is an inflow ( + ) or outflow ( ), or (NE) if the transaction has no effect on cash. (H int: Determine the journal entry recorded for the transaction. The transaction affects net cash flows if and only if the account Cash is affected.)

1. Recorded an adjusting entry to record accrued salaries expense.

2. Paid cash to purchase new equipment.

3. Collected payments on account from customers.

4. Recorded and paid interest on debt to creditors.

5. Declared and paid cash dividends to shareholders.

6. Sold used equipment for cash at book value.

7. Prepaid rent for the following period.

8. Repaid principal on revolving credit loan from bank.

9. Purchased raw materials inventory on account.

10. Made payment to suppliers on account.

for each of the following recent transactions indicate whether net cash inflows outf 568427

Aug 29, 2021 | Uncategorized

Determining Cash Flow Statement Effects of Transactions Hewlett Packard is a leading manufacturer of computer equipment for the business and home markets. For each of the following recent transactions, indicate whether net cash inflows (outflows) from operating activities (NCFO), investing activities (NCFI), or financing activities (NCFF) are affected and whether the effect is an inflow ( + ) or outflow ( ), or (NE) if the transaction has no effect on cash. ( Hint: Determine the journal entry recorded for the transaction. The transaction affects net cash flows if and only if the account Cash is affected.)

1. Purchased raw materials inventory on account.

2. Prepaid rent for the following period.

3. Purchased new equipment by signing a three year note.

4. Recorded an adjusting entry for expiration of a prepaid expense.

5. Recorded and paid income taxes to the federal government.

6. Purchased investment securities for cash.

7. Issued common stock for cash.

8. Collected payments on account from customers.

9. Sold equipment for cash equal to its net book value.

10. Issued long term debt for cash.

to compare statement of cash flows reporting under the direct and indirect methods e 568428

Aug 29, 2021 | Uncategorized

Comparing the Direct and Indirect Methods To compare statement of cash flows reporting under the direct and indirect methods, enter check marks to indicate which items are used with each method.

present the operating activities section of the statement of cash flows for satellit 568429

Aug 29, 2021 | Uncategorized

Reporting Cash Flows from Operating Activities (Indirect Method) – The following information pertains to Satellite Company:

Required:

Present the operating activities section of the statement of cash flows for Satellite Company using the indirect method.

what were the major reasons that capaz was able to report a net loss but positive ca 568430

Aug 29, 2021 | Uncategorized

Reporting and Interpreting Cash Flows from Operating Activities from an Analyst’s Perspective (Indirect Method) Capaz Company completed its income statement and balance sheet for 2012 and provided the following information:

In addition, Capaz bought a small service machine for $5,000.

Required:

1. Present the operating activities section of the statement of cash flows for Capaz Company using the indirect method.

2. What were the major reasons that Capaz was able to report a net loss but positive cash flow from operations? Why are the reasons for the difference between cash flow from operations and net income important to financial analysts?

present the operating activities section of the statement of cash flows for new visi 568431

Aug 29, 2021 | Uncategorized

Reporting and Interpreting Cash Flows from Operating Activities with Loss on Sale of Equipment (Indirect Method) New Vision Company completed its income statement and balance sheet for 2011 and provided the following information:

Required:

Present the operating activities section of the statement of cash flows for New Vision Company using the indirect method.

what were the major reasons that time warner was able to report a net loss but posit 568432

Aug 29, 2021 | Uncategorized

Reporting and Interpreting Cash Flows from Operating Activities from an Analyst’s Perspective (Indirect Method) Time Warner Inc. is a leading media and entertainment company with businesses in television networks, filmed entertainment, and publishing. The company’s 2008 annual report contained the following information (dollars in millions):

Required:

1. Based on this information, compute cash flow from operating activities using the indirect method.

2. What were the major reasons that Time Warner was able to report a net loss but positive cash flow from operations? Why are the reasons for the difference between cash flow from operations and net income important to financial analysts?

a recent statement of cash flows for colgate palmolive reported the following inform 568433

Aug 29, 2021 | Uncategorized

Inferring Balance Sheet Changes from the Cash Flow Statement (Indirect Method) A recent statement of cash flows for Colgate Palmolive reported the following information (dollars in millions):

Required:

Based on the information reported on the statement of cash flows for Colgate Palmolive, determine whether the following accounts increased or decreased during the period: Receivables, Inventories, Other Current Assets, and Payables.

for each of the asset and liability accounts listed on the statement of cash flows d 568434

Aug 29, 2021 | Uncategorized

Inferring Balance Sheet Changes from the Cash Flow Statement (Indirect Method) A recent statement of cash flows for Apple contained the following information (dollars in millions):

Required:

For each of the asset and liability accounts listed on the statement of cash flows, determine whether the account balances increased or decreased during the period.

modern india citizens club was registered in a city and the accountant prepared the 567605

Aug 29, 2021 | Uncategorized

Correction of wrong statements

Modern (India) Citizens Club was registered in a city and the accountant prepared the following Receipts and Payments Account for the year ended on Mar 31, 2008 and showed a deficit of Rs 14,520:

Information

1. Cash overspent represents honorarium to secretary not withdrawn due to cash deficit and his annual honorarium is Rs 12,000.
2. Depreciation on premises and car is to be provided at 5% and 20% on written down value.

Required: Prepare the correct Receipts and Payments Account, Income and Expenditure Account for the year 2007–2008 and Balance Sheet as Mar 31, 2008.

dr kashyap is a neuro surgeon the receipts and payments account for the year 2008 is 567606

Aug 29, 2021 | Uncategorized

Dr. Kashyap is a neuro surgeon. The Receipts and Payments Account for the year 2008 is as follows:

Information

His position stood at Jan 1, 2008 is as follows:

Equipment: Rs 2,00,000; Medicines: Rs 30,000

Fees outstanding Rs 5,000; Books: Rs 40,000

Provide 10% Depreciation on Equipments and 20% on Books.

Further Information

Fees still outstanding (at the end): Rs 10,000

Salaries Still Payable (at the end): Rs 6,000

Stock of Medicines:Rs 4,000

You are required to prepare

1. Receipts and Expenditure Account
2. Balance Sheet

dr v p b singh is a doctor by profession the receipts and payments for the year 2008 567607

Aug 29, 2021 | Uncategorized

Dr. V.P.B. Singh is a doctor by profession. The receipts and payments for the year 2008 is as follows:

Information as on Jan 1, 2008

Provide Depreciation @10% on Equipment and 20% on Books.

Further information at the end of the year

Required: Receipts and Expenditure Account for the year ending on Dec 31, 2008 and Balance Sheet on that date.

x and y are in partnership practicing as chartered accountants under the name exy am 567608

Aug 29, 2021 | Uncategorized

X and Y are in partnership practicing as chartered accountants under the name EXY & Co. sharing profits and losses. They close their accounts on Mar 31 every year. The following was their Balance Sheet as on Mar 31, 2007.

Balance Sheet as on Mar 31, 2007

The following is the summary of their cash bank transactions for the year ending Mar 31, 2008:

prepare receipts and expenditure account of the firm for the year ended on mar 31 20 567609

Aug 29, 2021 | Uncategorized

M/s Sagar and Boond are a firm of solicitors whose partners Anand and Ashok share profits in equal shares after charging a management fee of 5% there of to Anand. For the year ended on Mar 31, 2008, the books maintained by the firm reveal the following particulars.

The following additional information is also available.

1. Capital accounts of partners, at the beginning of the year, were of equal amounts.
2. Included in the bills of costs sent to clients are sundry disbursements like postage, telephone charges, etc. debited in the books of office expenses account. At the end of the year, items on the debit side of clients Disbursements Account amounting to Rs 3,200 had not been charged to clients in bills of costs. If Rs 200 was received and credited to their accounts in the year.

Required: Prepare Receipts and Expenditure Account of the firm for the year ended on Mar 31, 2008 and a Balance Sheet on that date.

multiple choice questions 567610

Aug 29, 2021 | Uncategorized

Multiple Choice Questions

1. The Receipts and Payments Account generally shows:
   1. Surplus
   2. A Credit Balance
   3. A Debit Balance
   4. Deficit
2. Treatment for Special Donations received:
   1. Should be treated as Revenue Receipt
   2. Should be treated based on its volume
   3. Should be credited as special account (head) and recorded in the Balance Sheet.
   4. None of the above
3. Income and Expenditure Accounts show a balance of
   1. Surplus or Deficit
   2. Cash in hand at the end
   3. Net Profit/Loss
   4. Capital Fund
4. Rent Paid in Advance during the accounting year is
   1. An Expense
   2. An Income
   3. An Asset
   4. A Liability
5. Subscription received in advance during an accounting year is
   1. An Income
   2. An Asset
   3. A Liability
   4. An Expense
6. Salaries outstanding at the end should be
   1. Shown on the assets side of the Balance Sheet
   2. Added to salaries and shown on expenditure side of the Income and Expenditure Account
   3. Shown only on Receipts and Payments Account
   4. None of the above
7. Depreciation is to be computed in general
   1. Only on the assets purchased during the year
   2. On assets which were throughout the year
   3. On (a) and (b) above
   4. None of the above
8. A second hand computer with system was purchased for Rs 5000. It was given for service and the amount charged for service was Rs 250. Installation charge Rs 100 was paid to the technician. Capitalised value to be recorded will be
   1. Rs 5,250
   2. Rs 5,100
   3. Rs 5,350
   4. Rs 5,000
9. At the beginning of accounting year the following particulars are extracted value of Assets Rs 25,000, Liabilities Rs 5000, Debit Balance of Income and Expenditure Account Rs 2,500. Then Capital Fund will be
   1. Rs 32,500
   2. Rs 22,500
   3. Rs 27,500
   4. Rs 20,000
10. Rent paid in the accounting year Rs 6,000. Rent paid in advance at the end of the year Rs 500. Rent outstanding but not yet paid for the year Rs 1,000. The amount to be debited to Income and Expenditure Account is
    1. Rs 6,500
    2. Rs 5,500
    3. Rs 6,000
    4. Rs 7,000

state whether the following statements are true or false 567611

Aug 29, 2021 | Uncategorized

State whether the following statements are True or False

1. Receipts and Payments Account is a summary of cash transactions during an accounting period.
2. Receipts and Payments Accounts only items relating to revenue in nature.
3. Receipts and payments records items which relate to current accounting period only.
4. Non cash items are shown in Receipts and Payments Account.
5. Closing Balance in Receipts and Payments Account represents either Surplus or Deficit.
6. Opening Balance is recorded in Income and Expenditure Account.
7. Income and Expenditure Account is a Nominal Account.
8. Income and Expenditure Account is a summarized cash book.
9. Income and Expenditure Account records only items of revenue in nature.
10. NPOs undertake trading activities also.
11. Amount spent for the purchase of books by a public library is of revenue nature.
12. Entrance fee is always to be capitalised.
13. Donations received for specific purposes is of revenue nature.
14. Outstanding incomes need not be adjusted, if accounts are kept on an accrual basis.
15. All assets will be shown in Income and Expenditure Account as income.
16. Donations will appear on the liabilities side of a Balance Sheet.
17. Life membership fees have always to be treated as of revenue nature.
18. Fixed Deposit has always to be capitalised.
19. Balancing figure in the preparation of Balance Sheet at the beginning of the year represents surplus of deficit.
20. Expenses paid for current year will appear in the Balance Sheet.
21. Pre paid expenses is an asset.
22. Outstanding income is a liability.
23. While preparing final accounts of a professional firm, value of work in progress is not to be taken into account.
24. Balance of surplus is allocated among the partners in an agreed ratio.

fill in the blanks with appropriate word s 567612

Aug 29, 2021 | Uncategorized

Fill in the blanks with appropriate word(s)

1. The primary motive of NPO is to _______.
2. The net result of the activities of Not for profit is termed as or _______.
3. The Receipt and Payment Account is _______ Account.
4. The Receipt and Payment Account starts with the opening Balance of _______ and _______.
5. The Receipt and Payment Account ending with the Closing Balance of _______ and _______.
6. The Receipt and Payment Account does not record _______ items.
7. The Receipt and Payment Account records both _______ and _______ nature items.
8. An Income and Expenditure Account is _______ to Account like Profit and Loss Account.
9. An Income and Expenditure Account records only those items which are of _______ nature.
10. In an Income and Expenditure Accounts the balance at the end represents either _______ on _______.
11. The Net Surplus or Net Deficit arrived at an Income and Expenditure Account is transferred to the capital fund in _______.
12. Outstanding Expenses at the end of current year is treated as _______ end recorded in the balance sheet.
13. Income Received in Advance during an accounting period is treated as _______ and recorded in the balance sheet.
14. Likewise expenses spent in advance is _______.
15. Outstanding Income is _______.
16. Specific Donations are treated as _______ in preparation of Income and Expenditure Account.
17. Receipts as per pass book should be _______ by cheque deposited but not collected at the end of the year.
18. Life Membership Subscription is classified as _______ and so does not find place in Income and Expenditure Account.
19. Expenses paid for current year and incomes received for current year shall not be recorded in the _______.
20. Final accounts prepared for professionals is termed as _______ Account and not Income and Expenditure Account.
21. Provision for outstanding fees and charges at the end of the year is _______ in Receipts and Expenditure Account.
22. If income is Rs 25,700 and deficit debited to capital fund is Rs 9,300 expenditure is _______.
23. Entrance fees received is Rs 9,000. 40% should be capitalised. Amount to be recorded in Income and Expenditure is Rs _______.
24. Value of Books at the beginning of an accounting year is Rs 20,000. Books Purchased during the year is Rs 5,000. If its value is depreciated @ 10%, it is Rs _______.
25. Sports materials at the beginning of an accounting year is Rs 9,000. Purchased during the year Rs 6,000. Stock of sports materials at the end of the year is Rs 2,500, value of sports materials to be entered in Income and Expenditure Account is Rs _______.

assume that you are a financial analyst and you have just been handed a 2000 financi 567968

Aug 29, 2021 | Uncategorized

Assume that you are a financial analyst and you have just been handed a 2000 financial report of Firm X, a large, global pharmaceutical firm. The company competes in both traditional pharmaceutical products and the evolving biotechnology products. Also assume that you have been given the following data on the pharmaceutical industry.

Given the above data, evaluate the cost management performance of Firm X.

consider the following excerpt regarding advertising agencies the latest study on ad 567969

Aug 29, 2021 | Uncategorized

Consider the following excerpt regarding advertising agencies: The latest study on advertising agency performance from the Incorporated Society of British Advertisers found that agencies are failing to provide adequate service, to develop trusting relationships, be innovative, be efficient, control costs, and keep their promises. Agency staff are difficult to reach, planners are lack

ing when it comes to monitoring and evaluating advertising, creatives still do

not listen to advertisers’ concerns or understand their target markets, and production

departments fail to deliver value for money or meet budgets. On a

grander scale, the majority of advertisers do not feel that their agencies provide

co Given the problems plaguing advertising agencies, discuss how an integrated cost management system could help individual ad agencies become more competitive.

cost management and organizational culture use internet resources to compare and con 567971

Aug 29, 2021 | Uncategorized

Cost management and organizational culture) Use Internet resources to compare and contrast the organizational cultures and operating performance of any two firms in the same industry. Following are possible pairs to compare.

1. Delta Air Lines and Southwest Airlines (http://www.delta air.com and http://www.southwest.com)

2. Exxon and Royal Dutch Shell (http://www.exxon.com and http://www.shell .com)

3. Nordstrom’s and Wal Mart (http://www2.nordstrom.com and http://www .walmart.com)

4. Haggar and Levi Strauss (http://www.haggar.com and http://www.levi.com)

5. IBM and Dell Computer (http://www.ibm.com and http://www.dell.com) In your discussion, address the following questions:

a. Which of the pair is the better operating performer?

b. Do you believe that organizational culture has any relationship to the differences in operations?

the following excerpt illustrates a strategy change by corel the software company 567975

Aug 29, 2021 | Uncategorized

The following excerpt illustrates a strategy change by Corel, the software company. Corel’s problems originated four years ago when the company purchased the WordPerfect word processing software from Novell Inc. and started waging war with Microsoft for the top retail sales spot in packaged office suites. Within months of the $124 million acquisition, Corel transformed the moribund WordPerfect into the centerpiece of a rival to Microsoft’s Office package, which included a word processor, a spreadsheet, graphics software, and a personal organizer. For two months in 1995, Corel’s package edged out Microsoft’s in retail sales. But the early success was deceptive. Corel sacrificed profit for market share by marketing its office suite at about half the retail price of Microsoft’s Office. Meanwhile, Corel’s aggressive advertising campaign, including title sponsorship of the women’s professional tennis tour and national television commercials in the United States, drained the company’s meager resources. When Microsoft introduced its own upgraded Office 97 suite, the battle was over. To reverse its fortunes, Corel is slashing costs. . . . For instance, it is spending much less than before to attract new office software customers. Corel’s change in cost management has resulted in the company’s return to profitable operations. The change in cost management resulting in “slashing costs” implies that the company has changed its strategy. Discuss how the firm’s strategy might have changed such that the firm’s new strategy would b consistent with the change in cost management that is described in the article.

alternative cost management strategies robert l wehling procter amp gamble rsquo s s 567977

Aug 29, 2021 | Uncategorized

Alternative cost management strategies) Robert L. Wehling, Procter & Gamble’s senior vice president for advertising and market research, would like to wean Americans off coupons. His relentless cost control efforts, which P&G began in the manufacturing area in 1993, have led to moves to eliminate couponing, increase print advertising, and curb growth in P&G’s marketing spending. In fact, fewer than 2% of the 291.9 billion coupons that companies distributed in 1995 were redeemed. . . . P&G has been plowing back savings from cost cutting initiatives into lowering prices on most of its 300 brands. Since 1992–93, the list prices on P&G brands, excluding coffee, have declined by $1 billion. Prices on diapers and detergents have particularly declined. In February, P&G eliminated all promotional coupons in three New York state markets—in a test that many industry watchers doubted could be successfully expanded nationwide because coupons are such an integral part of American consumers’ psyche. Until P&G came along, no company had risked eliminating all coupons in a big geographical market, despite the growing consensus among major marketers that coupons are expensive and turn brand loyal customers into bargain hunters who select brands based on short term price promotions. P&G spent $3.3 billion in 1995 on advertising. Its popular brand names include Tide, Vicks, Cover Girl, and Pampers.

a. What costs and benefits did P&G likely consider in its decision to discontinue the use of coupons to promote its products?

b. What is P&G’s apparent market strategy in deciding to lower prices? Explain.

c. What risks should P&G take into account before discontinuing the use of coupons nationwide?

the following excerpt illustrates how one company experienced negative fallout due t 567978

Aug 29, 2021 | Uncategorized

The following excerpt illustrates how one company experienced negative fallout due to cost cutting measures. In Digital Equipment Corp.’s 1994 reorganization, its second in as many years, the company eliminated hundreds of sales and marketing jobs in its healthindustries group, which had been bringing in $800 million of annual revenue by selling computers to hospitals and other health care providers worldwide. Digital says it cut [costs and positions] because it had to act fast. It was losing about $3 million a day, and its cost of sales was much higher than that of its rivals. Robert B. Palmer, the chief executive officer of the Maynard, Massachusetts, company, saw across the board cuts in all units, regardless of profitability, as the way to go. . . . But in the health industries group, the cutbacks imposed unexpected costs. Digital disrupted longstanding ties between its veteran salespeople and major customers by transferring their accounts to new sales divisions. It also switched hundreds of smaller accounts to outside distributors without notifying the customers. At the industry’s annual conference, “I had customers coming up to me and saying, ‘I haven’t seen a Digital sales rep in nine months. Whom do I talk to now?’ ” recalls Joseph Lesica, a former marketing manager in the group who resigned last year. “That really hurt our credibility. I was embarrassed.” Resellers of Digital computers, who account for most of its health care sales, also complained about diminished technology and sales support. “There were months when you couldn’t find anybody with a Digital badge,” complains an official at one former reseller who had been accustomed to Digital sales reps

accompanying him on customer calls. “They walked away from large numbers of clients.” Adds Richard Tarrant, chief executive of IDX Systems Corp., a Burlington, Vermont, reseller that used to have an exclusive arrangement with Digital, “Now, they’re just one of several vendors we use.” Many Digital customers turned to International Business Machines Corp. [IBM] and Hewlett Packard Co., and so did some employees of Digital’s downsized health care group. Lesica says some laid off workers went to Hewlett Packard and quickly set about bringing Digital clients with them. “That’s another way [Digital] shot itself in the foot,” he says.

a.What is the implied mission (build, hold, or harvest) of the health industries group of Digital? Explain.

b.Describe the circumstances in which “across the board” cuts in spending represent a rational approach to cost management.

c.When Digital decided to cut costs, what were the apparent criteria used to determine which costs to cut?

d.How could a better, integrated cost management system have helped Digital avoid the adverse effects of its cost cutting efforts?

the following excerpt deals with nordstrom rsquo s cost cutting efforts nordstrom rs 567980

Aug 29, 2021 | Uncategorized

The following excerpt deals with Nordstrom’s cost cutting efforts. Nordstrom’s Inc., a retailing industry laggard in profits, has been undergoing an effort to cut costs. But can the department store chain do that while maintaining its famously obsessive level of customer service? “The biggest challenge is to keep the culture in the organization while making the necessary changes for the new millennium,” says Jennifer Black, president and analyst at Black & Co. in Portland, Oregon. The good news is that Nordstrom’s lags so far behind the industry’s most efficient and profitable department store operators that it can cut a lot of costs without gutting the sales staff. “There is so much at this company that hasn’t been done,” Black says. “They’ve only skimmed the surface.” For instance, May Department Stores Co., based in St. Louis, boasts a 12.5% operating margin, while Nordstrom’s was among retailing’s lowest, at 5.6% for 1998. Nordstrom’s certainly has opportunity for improvement. Its sales per square foot of store space, at $382 for 1998, are the envy of the industry. May’s sales per square foot were just $201. But inefficient operations have prevented Nordstrom’s from boosting its bottom line, despite its higher sales. Becoming efficient requires Nordstrom’s family, which owns a controlling 35 percent stake in the company, to embrace change at what has been an insular operation. So far, the family is talking the talk. “Nothing is sacred,” says 36 year old William Nordstrom.

a. What is Nordstrom’s strategy as implied by the discussion in the news article?

b. Given your answer to part (a), discuss how, as a paid consultant to Nordstrom’s, you would go about developing a plan to recommend cost management changes at the company.

ford motor co reported a 58 percent drop in its fourth quarter profits as a result o 567981

Aug 29, 2021 | Uncategorized

Ford Motor Co. reported a 58 percent drop in its fourth quarter profits as a result of the heavy costs of launching new vehicles. And officials predicted that similar costs will continue to depress earnings through the first half of this year. Ford launched its Taurus sedan, its biggest selling car, in the fourth quarter, while preparing for the debut of its F series pickup trucks. The two vehicle lines account for sales of more than one million vehicles each year. In the first half of 1996, Ford also plans to introduce a new version of its Escort small car, another of Ford’s top sellers. “The time to make changes is when you are strong,” said David McCammon, Ford’s vice president of finance. He said the automaker still managed to finish 1995 with $12.4 billion in cash despite a drop in full year reported profit of 22%.

a. Why would Ford’s reported profits for 1995 have dropped because of the launching of new vehicles?

b. How would Ford’s reported profit have differed if the company had used life cycle costing techniques to account for the costs of launching new products?

c. Explain what McCammon meant when he said, “The time to make changes is when you are strong.” d. By management’s willingness to proceed with launching new products even though doing so lowers reported profits for the current year, what can be inferred about the motivational elements in Ford’s cost management

d. By management’s willingness to proceed with launching new products even though doing so lowers reported profits for the current year, what can be inferred about the motivational elements in Ford’s cost management system?

a joke making the rounds in philadelphia area doctors rsquo lounges goes like this l 567982

Aug 29, 2021 | Uncategorized

A joke making the rounds in Philadelphia area doctors’ lounges goes like this: Leonard Abramson, chief executive officer of U.S. Healthcare Inc., the big health maintenance company, dies and goes to heaven, where he tells God what a great place it is. “Don’t get too comfortable,” God advised, “You’re only approved for a three day stay.” That’s the kind of cost control that the messianic Abramson understands. In the past two years, U.S. Healthcare has slashed the fees it pays to specialists and hospitals by 12 percent to 20 percent and sometimes more, these providers say. In the past year, it has cut members’ days in hospitals by 11 percent. Increasingly, it asks specialists and hospitals to assume the financial risk for procedures that cost more than anticipated. U.S. Healthcare is widely considered one of the country’s toughest HMO companies and one of the most innovative. It keeps 30 cents of every premium dollar to pay for salaries, marketing, administration and shareholder dividends, nearly 10 cents more than the industry average. It zealously tracks the performance of doctors and hospitals, paying more to those whose quality scores are high. It is earning robust profits—up 99 percent in the past 24 months—while rocking the tradition bound, health care markets along the East Coast. “Unless you change the culture of the community you’re working in, you’re not changing health care,” Abramson declares. In the health care community, U.S. Healthcare has both staunch supporters and critics. Consider the following additional information:

• Last year, Abramson earned $9.8 million in salary, bonuses, and stock options. Critics suggest this is excessive pay and takes resources that could otherwise have been applied to benefit patients. Abramson says, in a free market economy, large rewards flow to those who provide superior performance.

• Critics claim U.S. Healthcare selects service providers based on price rather than quality.

• The company pays doctors to take training courses, such as one in breast cancer screening techniques.

• The company has an information system that allows it to rank hospitals according to infection rates of urology patients, by the length of stay for coronary bypass surgery, or by the number of babies delivered by Cesarean. The company shows the comparative data to its service providers and uses it as leverage in negotiations.

• The company is increasingly using performance based pay contracts for its service providers.

• All of U.S. Healthcare’s HMOs have earned three year accreditation from the National Committee for Quality Assurance; this is the best performance of any U.S. managed care company. Examine the preceding information and discuss your opinion as to whether U.S. Healthcare is applying an ethical approach to the management of healthcare costs. Where possible, use concepts presented in the chapter to defend your position.

strazzanti is president of com corp industries a 13 million 100 employee metal stamp 567983

Aug 29, 2021 | Uncategorized

Strazzanti is president of Com Corp Industries, a $13 million, 100 employee metal stamping shop he incorporated in Cleveland in 1980. He’d started out as amachine operator with a tool and die manufacturer, rapidly climbing the ladder to become general manager of another stamping company. Along the way, he didn’t just dream about what he’d change if he were a company president. He figured out ways to make his dreams a reality. [Dateline Cleveland, 1977] Packie Presser was vice president of the notoriously demanding local chapter of the teamsters’ union. The chapter controlled a metal stamping plant where Strazzanti had just been promoted from floor supervisor to general manager. Strazzanti recalls: Two coworkers marched into my office. It was a hot summer day; they had had a few beers at lunch and were fired up. They worked hard in the warehouse and saw the engineers working in the air conditioning and getting paid a lot more. They didn’t think it was fair and wanted more money. I knew I was in a no win situation. If I told them I thought they were being paid fairly, that’s what they expected; they were going to argue, and they weren’t going to be happy with the results. If I gave them more money, I was being unfair to everybody else. So I took out a legal pad and I told them to write down whatever they wantedto be paid. Thirty days from that date, they would get that pay—with one caveat. During the 30 days, I would shop for replacements for them. If I could get highly qualified people to work for anything less than that number, they would have to take a hike. They asked for time to think about it and never came back with a number. A lot of these guys think that if a company fills an order for a million dollars, it earns a million dollars in profit. I realized that if workers understood how a company earned a profit and how it had to be competitive, a lot of the resentment between managers and employees could be eliminated. And they needed to understand that if they improved their job skills, they could receive higher wage.

a. How does the sharing of information in an organization contribute to the empowerment of employees in a decentralized organizational structure to enhance their performance and that of the organization?

b. In a decentralized organization, how does the sharing of information allow employees to better understand their organizational roles relative to the roles of others?

c. In a decentralized organization, how does quality control depend on widespread distribution of information?

the motivational elements of a cost management system are integral to the success of 567984

Aug 29, 2021 | Uncategorized

The motivational elements of a cost management system are integral to the success of cost management goals. It is understood that the stronger the individual incentive to manage costs correctly, the greater is the likelihood that a given manager will act to manage costs effectively. Currently, many employers provide fringe benefits to their employees that may provide a significant social benefit but that do not necessarily provide the strongest incentive to effectively manage costs. A significant employee benefit of this type is employer provided health care. Discuss whether employers have an ethical responsibility to their employees, and to society, to provide health coverage to their employees, given that other forms of compensation that provide more powerful incentives could be offered to employees instead of health coverage.

match the following lettered terms on the left with the appropriate numbered descrip 568009

Aug 29, 2021 | Uncategorized

Match the following lettered terms on the left with the appropriate numbered description on the right.

classify the following into capital and revenue expenditure by stating reasons 567562

Aug 29, 2021 | Uncategorized

Classify the following into capital and revenue expenditure by stating reasons:

1. Employees State Insurance premium paid Rs 750.
2. Cost of cleaning, leveling and ploughing to plant coffee plant.
3. Premium paid for a lease Rs 5,000.
4. Rs 4,000 spent on painting the factory.
5. Repair Rs 1,500 occurred due to the negligence of the foreman.
6. Compensation paid on account of breach of contract to acquire raw material.
7. A cine projector was replaced with a new one having the latest digital features for audio effect.
8. Rs 25,000 was spent as lawyer’s fee to defend a suit, but it was not successful.
9. Insurance claim of Rs 7,500 received from an insurance company for loss of goods by fire for Rs 10,000.
10. Canal irrigation charges paid to the government.

state with reasons whether the following transactions are capital or revenue expendi 567563

Aug 29, 2021 | Uncategorized

State with reasons whether the following transactions are capital or revenue expenditure.

1. Cost of pulling down an old building for raising a new one in its place.
2. Rs 1,000 was spent to remove a worn out part and fix a new part.
3. Rs 3,00,000 spent in advertisement, the benefit will spread over the next 5–6 years.
4. Interest on a term loan for purchase of machinery.
   1. production has not yet begun,
   2. production has already begun.
5. Legal expenses incurred in
   1. raising a debenture loan,
   2. purchasing a land for business expansion,
   3. incurred in a Tax Tribunal.
6. Heavy expenditure on research of a particular product to be introduced.

state whether the following statements are true or false 567565

Aug 29, 2021 | Uncategorized

State whether the following statements are true or false

1. Capital expenditure is money spent on purchase of fixed assets for immediate resale.
2. Fixtures and fittings are intangible assets.
3. Copyrights belong to intangible assets.
4. Legal expenses incurred in connection with the purchase of property are revenue expenditures.
5. Interest paid on a loan to purchase a fixed asset is also a capital expenditure.
6. The direct benefit of revenue expenditure is usually exhausted in the accounting period itself.
7. The cost of raw materials used in the manufacture of goods intended for resale is capital expenditure.
8. All expenses incurred for upkeep of fixed assets are capital expenditure.
9. Capital expenditure may result in enhancement of the value of an existing asset.
10. Capital expenditure is transferred to trading and profit and loss account.
11. The money spent on repairs of a second hand machine is capital expenditure.
12. Prepaid expense is a capital expenditure.
13. Preliminary expenses incurred on the formation of a limited company are deferred revenue expenditure.
14. Any contributions to the capital of the business are capital receipts.
15. Sale of inventories is a capital receipt.

fill in the blanks with appropriate word s 567566

Aug 29, 2021 | Uncategorized

Fill in the blanks with appropriate word(s)

1. Expenditures which results in the acquisition of a permanent asset is a __________expenditure.
2. Amounts written off from the cost of fixed assets is __________ expenditure.
3. Wages paid for the erection of machinery is a __________ expenditure.
4. Amount spent on acquiring goodwill is a __________ expenditure.
5. Amount spent to put second hand machinery in working condition is a __________ expenditure.
6. Amount spent for replacement of part of a machine is __________ expenditure.
7. Expenses incurred on whitewashing the factory premises at regular intervals are __________ expenditure.
8. Heavy advertising to introduce a new product is __________ .
9. Travelling expenses of Rs 30,000 paid to a technician for the erection of a new machine is __________ expenditure.
10. Expenses incurred on consultancy service are __________ expenditure.
11. Wages paid to workers for manufacturing a part of its plant are __________ expenditure.
12. Temporary shed put up in the factory premises to store finished product is __________ expenditure.
13. Gain on sale of fixed assets is treated as __________
14. Assets minus liabilities is equal to __________
15. Any expenditure incurred to reap benefit for a few accounting periods in future is called __________ expenditure.

from the following extracts of receipts and payments account and additional informat 567581

Aug 29, 2021 | Uncategorized

From the following extracts of Receipts and Payments Account and additional information you are required to calculate the income from subscriptions for the year ending Dec 31, 2008 and show them in the Income and Expenditure Account and the Balance Sheet of a recreation club in Delhi.

Extract of Receipts and Payments Accounts for the Year Ended Dec 31, 2008

Additional information

1. Subscription outstanding on Dec 31, 2007 – Rs 6000
2. Subscriptions outstanding on Dec 31, 2008 – Rs 5,000
3. Subscriptions received in advance on Dec 31, 2007 – Rs 6,000

from the following extracts of receipts and payments account and the additional info 567583

Aug 29, 2021 | Uncategorized

From the following extracts of Receipts and Payments Account and the additional information, you are required to compute the income from subscriptions for the year ending on Dec 31, 2008 and show the subscriptions items in the Income and Expenditure Account and the Balance Sheet as on Dec 31, 2008.

Extract of Receipts and Payments Account for the Year Ending on Dec 31, 2008

Additional Information

Subscriptions outstanding as on Dec 31, 2007: Rs 13,000

Subscriptions received in advance as Dec 31, 2007: Rs 14,500

(including Rs 2,500 for 2008)

There are 1,600 members each paying an annual subscription of Rs 100.

how will you deal with the following items while preparing the income and expenditur 567588

Aug 29, 2021 | Uncategorized

How will you deal with the following items while preparing the Income and Expenditure Account for the year ending on Mar 31, 2008 and a Balance Sheet as on that date.

Case (a)

During 2007–2008, the payment made to these creditors was Rs 20,750. There was no cash purchase.

Case (b)

During 2007–2008, the payment made to these creditors amounted to Rs 35,000 and cash payments amounted to Rs 10,000.

from the following information compute the amount of stationery to be debited to inc 567589

Aug 29, 2021 | Uncategorized

From the following information, compute the amount of stationery to be debited to Income and Expenditure Account for 2008.

from the following receipts and payments account of a social club and from the infor 567591

Aug 29, 2021 | Uncategorized

From the following Receipts and Payments Account of a social club and from the information, you are required to prepare an Income and Expenditure Account, for the year ended 31st December, 2008

Receipts and Payment Account for the Year Ending Dec 31, 2008

Information

• The club has 100 members each paying an annual subscription of Rs 25, subscription outstanding on Dec 31, 2007 were Rs 600.
• On Dec 31, 2008 salaries outstanding amounted to Rs 250. Salaries paid in 2008 included Rs 500 for the year 2007.
• On Jan 1, 2008, the club owned building valued at Rs 50,000, furniture Rs 5,000 and books Rs 4,000.
• Provide depreciation on furniture @ 10% p.a.

the secretary of a social club provides you with the following receipts and payments 567592

Aug 29, 2021 | Uncategorized

The secretary of a social club provides you with the following Receipts and Payments Account and the Income and Expenditure Account for the year ended Mar 31, 2009.

Receipts and Payments Account for the Year Ending Mar 31, 2009

Income and Expenditure Account for the year ending Mar 31, 2009

The club had the following assets on Mar 31, 2008:

You are required to prepare the Balance Sheets of the club as on Mar 31, 2008 and Mar 31, 2009.

from the following information and receipts and payments account of a club prepare i 567593

Aug 29, 2021 | Uncategorized

From the following information and Receipts and Payments Account of a club, prepare Income and Expenditure Account for the year ending Dec 31, 2008 and a Balance Sheet on that date.

Receipts and Payments Account for the year ending Dec 31, 2008

Additional Information

1. On Dec 31, 2007, the club possessed books worth Rs 25,000 and furniture worth Rs 10,000. Provide depreciation on these assets @ 10% including the purchases during the year.
2. Subscription in arrears at the beginning of the year amounted to Rs 500 and at the end of end of the year Rs 800 was outstanding.
3. The club paid three months rents in advance both in the beginning and at the end of the year.

prepare income and expenditure account for the year ending dec 31 2008 and a balance 567594

Aug 29, 2021 | Uncategorized

Prepare Income and Expenditure Account for the year ending Dec 31, 2008 and a Balance Sheet on that date from the following Receipts and Payments Account and the Balance Sheet.

Receipts and Payments Account for 2008

Balance Sheet as on Dec 31, 2007

from the following information of a club prepare income and expenditure account for 567595

Aug 29, 2021 | Uncategorized

From the following information of a club, prepare Income and Expenditure Account for year ending Mar 31, 2008 and Balance Sheet as on that date.

Information

1. Surplus on account of tournaments and donations should be kept in reserve for a permanent pavilion.
2. Subscription due on Mar 31, 2008 Rs 1,500.
3. Write off 50% of balls, Bats Account and Printing and Stationery Account.
4. Treat Admission Fees as of Revenue Nature.

prepare income and expenditure account for the year ending on mar 31 2009 and balanc 567596

Aug 29, 2021 | Uncategorized

Prepare Income and Expenditure Account for the year ending on Mar 31, 2009 and Balance Sheet on that date from the following:

Receipts and Payments Account for the Year Ending on Mar 31, 2009

Information

Additional Information

1. There are 800 members, each paying an annual subscription of Rs 100.
2. 50% of Entrance Fees is to be capitalised.
3. Book value of Sports materials sold was Rs 4,000.
4. Depreciation on Furniture is to be provided @ 10%.

summary of bank transactions of a club for the year ending mar 31 2008 567597

Aug 29, 2021 | Uncategorized

Summary of Bank Transactions of a Club for the Year Ending Mar 31, 2008

Information

Required: Prepare Income and Expenditure Account for the year ending Mar 31, 2008 and Balance Sheet on that date.

the following is the trial balance of a public school on mar 31 2005 567598

Aug 29, 2021 | Uncategorized

The following is the Trial Balance of a Public School on Mar 31, 2005