MGT101 Assignment 1 Solution Spring 2021 Download in PDF

 QUESTION       

Following information is extracted from the books of a business concern on 30^th June 2021.

Particulars	Rs.	Particulars	Rs.
Opening stock	15,000	Net sales	65,000
Plant and Machinery	100,000	Bank charges	5,453
Accumulated depreciation - Plant and Machinery	20,000	Loan given to ABC Brothers.	40,000
Cash in hand	12,800	Capital	250,000
Cost of goods sold	25,000	Loan taken from bank	50,000
Creditors	54,000	Commission received	10,000
Sundry debtors	20,000	Return inwards	5,000
Bad debts	1,575	Carriage outwards	450

 

ADDITIONAL INFORMATION:

·         In addition to the value of Plant & Machinery given in the above information, one machine costing to Rs. 30,000 was bought on 1^st April 2021. Basis/Policy of charging depreciation is Time Proportionate (on the basis of use). Plant & Machinery is depreciated @ 10% per annum on straight line method.

·         Provision for doubtful debts is to be maintained @ 5%

·         Net loss for the period is Rs. 75,000.

·         There is no closing stock found at the end of the accounting period

·         Books of accounts are closed on 30^th June each year.

Required:

Based on the above information, you are required to calculate the amount of:

1.      Gross profit

2.      Purchases

3.      Net book value of Plant & Machinery.

    4.     
Sundry debtors to be presented in Balance Sheet.

    5.      Owners’ equity to be presented in Balance Sheet.

Note:

1.       Preparation of Income Statement and Balance Sheet or any ledger account is not required. Just solve the given questions with the necessary work.

2.       Any mistake in any part will be awarded zero marks in that part. So be careful while solving the assignment.

Mentioning of Add or Plus sign (+) and Less or Minus sign (-) are necessary with working in case of addition or subtraction. Otherwise, marks of working will not be awarded

Task 1: Gross profit

Gross Profit = Net Sales – Low Cost of Goods Sold

                                = 65,000 – 25,000

Gross Profit = 40,000

 

Task 2: Purchases:

        Purchases = cost of goods sold – Less Opening Stock

                        = 25,000 – 15, 000

        Purchases = 10,000

Task 3: Net book Value of Plant & Machinery:

Cost of assets = 100,000 Less acc dep = 20,000

= 80,000

Less depreciation (100,000*10%) = 10,000

Book value of asset = 90,000

New Machine = 30,000

Less Depreciation (30,000*10%*3/12) = 750

Book Value = 29250

Task 4: Sundry debtors to be presented in Balance Sheet

Debtor = 20,000

New provision (20000*5%) = 1000

Debtor = 19000

 

Task 5: Owners’ equity to be presented in Balance Sheet.

Capital = 250,000

Add net loss = 75,000

 Equity = 175,000

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