Maa Assignment.docx

Student Name: Chandrashekhar Roll #

Assignment: Managerial Accounting and Analysis 1. Given here are a few situations: a.

Personal and business transactions are separately maintained. Answer: Business Entity Concept

b. Inventory is recorded at its purchase price. Answer: Cost Concept c.

The death of the chief executive officer of the company is not recorded in accounts. Answer: Money Measurement Concept

d. In case of doubt, it is considered better to understate rather than overstate income. Answer: Conservatism or Prudence Concept e.

Assets are not stated at their liquidation value. Answer: Cost Concept

f.

Financial Statements are prepared on an annual basis. Answer: Accounting Period Concept

g. Expenses are recognized in the same period as the related revenues. Answer: Matching Concept h. Revenue is recognized when it is earned and expense is recognized when it is incurred. Answer: Accrual Concept

i.

The accounting records only events that affect the financial position of the entity and at the same time can be reasonably determined in monetary terms. Answer: Money Measurement Concept

j.

Same treatment is given to comparable transactions from period to period. Answer: Consistency Period

Student Name: Chandrashekhar Roll #

Assignment: Managerial Accounting and Analysis REQUIRED State the accounting assumption or principle that describes each of the given situations.

2. The manager of a company who did not have proper accounting knowledge prepared the following balance sheet. He has wrongly classified the items under assets, liabilities and owners’ equity. Owner’s Equity and Liabilities Share Capital

Rs 10,00,000

Assets Retained Earnings

Rs 5,00,000

Equipment Cash

9,00,000 2,00,000

Land and Buildings Long – term loan Accounts Payable Accounts Receivables

7,00,000 4,00,000 2,00,000 3,00,000 21,00,000

21,00,000 Assets Equipment Cash Land and Buildings Account Receivables

LIABILITIES & OWNER’S EQUITY Share Capital Long Term Loan Accounts Payable Retained Earnings

INR 900,000.00 200,000.00 700,000.00 300,000.00 2,100,000.00

INR 1,000,000.00 400,000.00 200,000.00 500,000.00 2,100,000.00

REQUIED: Prepare the correct Balance sheet. 3. Using Accounting Equation, Answer the following independent Questions. New Company’s assets are Rs 250 lakh and its external liabilities are of Rs 100 lakh, determine the amount of owner’s Equity. Owner’s Equity and Liabilities External Liabilities

Rs

Assets

Rs

10,000,000 Land, building & equipment’s

25,000,000

25,000,000

25,000,000

Owner’s Equity

Solution: Owner’s Equity = Company assets-External Liabilities = 25,000,000-10,000,000 = 15,000,000

Student Name: Chandrashekhar Roll #

Assignment: Managerial Accounting and Analysis a) Royal Industries has total assets of Rs 100 lakh and owners’ Equity of Rs 70 lakh, Compute the amount of external liabilities. Owner’s Equity and Liabilities Owner’s Equity

Rs

Assets

Rs

7,000,000 Land, building & equipment’s

10,000,000

External Liabilities 10,000,000

10,000,000

Solution: External Liabilities = Assets – Owner’s Equity = 10,000,000-7,000,000 = 3,000,000

c) Small Enterprise has following amounts appearing in Balance Sheet as at 31 st December, 2015: Capital Rs 50 lakh, Reserves and undistributed profits Rs 15 lakh, and total external liabilities Rs 35 lakh, Determine the amount of total assets. Owner’s Equity and Liabilities Capital Profit External Liabilities

Rs

Assets 5,000,000 1,500,000 3,500,000 10,000,000

Rs

10,000,000

Solution: Total Assets = Capital + Profit + Liabilities = 5,000,000 + 1,500,000+3,500,000 = 10,000,000

4. Journalize the following transactions, Post them into ledger account and Prepare a Trial Balance 2017 March – 1 Commenced business with cash Rs.1,00,000 March – 2 Purchased goods for cash Rs. 25,000 March – 3 Purchased furniture for cash Rs. 6,000 March – 5 Purchased goods from Suresh on credit Rs. 5,000 March – 7 Sold goods for cash Rs. 30,000 March – 10 Sold goods to Mahesh on credit Rs. 25,000 March – 12 Returned goods to Suresh Rs. 500 March – 13 Mahesh returned us goods worth Rs. 500 March -15 Paid Rs. 4,450 to Suresh by cheque in full settlement of his account

Student Name: Chandrashekhar Roll #

Assignment: Managerial Accounting and Analysis March – 20 Received a cheque of Rs. 24,450 from Mahesh and gave a discount of Rs. 50 March – 25 Withdrew cash for personal use Rs. 2,500 March – 28 Paid rent of Rs. 5,000 and Salary Rs. 6,000 by cheque

Journal Entry Date

Account

March – 1

Cash A/C

L.F Dr.

Debit

1,00,000

To Capital A/C March – 2

Started business with cash Rs.1,00,000 Purchase A/C Dr.

1,00,000 25,000

To Cash A/C March – 3

Purchased goods for cash Rs. 25,000 Furniture A/C Dr.

25000 6,000

To Cash A/C March – 5

Purchased furniture for cash Rs. 5,000 Purchase A/C Dr.

Credit

6,000 5,000

To Suresh A/C March – 7

Purchased goods for cash Rs. 25,000 To Cash A/C Dr.

5,000 30,000

Sales A/C March – 10

Sold goods for cash Rs. 30,000 To Mahesh A/C Dr.

30,000 25,000

Sales A/C March – 12

Sold goods to Mahesh on credit Rs. 25,000 To Suresh A/C Dr.

25000 500

Purchase Return A/C March – 13

Returned goods to Suresh Rs. 500 Sales Return A/C Dr.

500 500

To Mahesh A/C 500 March – 15

Mahesh returned us goods worth Rs. 500 To Suresh A/C Dr. To Bank A/C Paid Rs. 4,450 to Suresh by cheque in full settlement of his account

4,500 4,450

Student Name: Chandrashekhar Roll #

Assignment: Managerial Accounting and Analysis March – 20

To Bank A/C

Dr.

24450

Discount allowed A/C

50

To Mahesh Account

March – 25

24500

Received a cheque of Rs. 24,450 from Mahesh and gave a discount of Rs. 50 Withdrew A/C Dr.

2,500

To Cash A/C March – 28

2,500

Withdrew cash for personal use Rs. 2,500 Rent A/C Dr.

5,000

Salary A/C

6,000

Dr.

To Bank A/C

11,000

Paid rent of Rs. 5,000 and Salary Rs. 6,000 by cheque Total

2,34,450

2,34,450

LEDGER CASH ACCOUNT Date Mar-01 Mar-07

Particulars To Capital A/C To Sales A/C

Apr-01

To Balance b/d

Date Mar-31

Particulars To Balance c/d

Date Mar-02 Mar-03 Mar-05

Particulars To Cash A/C To Cash A/C To Suresh A/C

Apr-01

To Balance b/d

JF

Amount 100,000 30,000

Date Mar-02 Mar-03 Mar-25 Mar-31

Particulars By Purchases By Furniture A/C By Drawings By Balance c/d

JF

Amount 25,000 6,000 2,500 96,500 130,000

Particulars By Cash A/C

JF

Amount 100,000 100,000 100,000

JF

Amount 36,000

130,000 96,500 CAPITAL ACCOUNT JF Amount Date 100,000 Mar-01 100,000 Apr-01 Purchases ACCOUNT JF Amount Date 25,000 Mar-31 6,000 5,000 36,000 36,000

By Balance b/d Particulars By Balance c/d

36,000

Student Name: Chandrashekhar Roll #

Assignment: Managerial Accounting and Analysis Date Mar-12 Mar-15 Mar-31

Date Mar-31

Particulars To Purchase Return A/C To Bank A/C To Balance c/d

Particulars To Balance c/d

SURESH ACCOUNT JF Amount Date 500 Mar-05

Particulars By Purchase A/C

JF

4450 50 5000 SALES ACCOUNT JF Amount 55,000

Apr-01

By Balance b/d

Date Mar-07 Mar-10

Particulars By Cash A/C By Mahesh A/C

5000 50 JF

Amount 30,000 25,000 55,000 55,000

Particulars Sales Return A/C By Bank A/C By Discount

JF

Amount 500 24,450 50 25000

Particulars By Suresh A/C

JF

Amount 500 500 500

Particulars By Balance c/d

JF

Amount 500 500

Particulars By Suresh A/C By Rent A/C By Salar A/C By Balance c/d

JF

Amount 4450 5000 6000 9000 24450

Particulars By Balance c/d

JF

Amount 50 50

Particulars By Balance c/d

JF

Amount 2500 2500

55000

Date Mar-10

Particulars To Sales A/C

Date Mar-31

Particulars To Balance c/d

Date Mar-13

Particulars To Mahesh A/C

Apr-01

To Balance b/d

Date Mar-20

Particulars To Mahash A/C

Apr-01

To Balance b/d

Date Mar-20

Particulars To Mahesh A/C

Apr-01

To Balance b/d

Date Mar-25

Particulars To Cash A/C

Apr-01 MAHESH ACCOUNT JF Amount Date 25,000 Mar-13 Mar-20 Mar-20 25,000 PURCHASE RETURN ACCOUNT JF Amount Date 500 Mar-12 500 Apr-01 SALES RETURN ACCOUNT JF Amount Date 500 Mar-31 500 500 BANK ACCOUNT JF Amount Date 24,450 Mar-15 Mar-28 Mar-28 Mar-31 24,450 9000 DISCOUNT ACCOUNT JF Amount Date 50 Mar-31 50 50 DRAWINGS ACCOUNT JF Amount Date 2500 Mar-31 2500

Amount 5,000

By Balance b/d

By Balance b/d

Student Name: Chandrashekhar Roll #

Assignment: Managerial Accounting and Analysis Apr-01

To Balance b/d

2500 RENT ACCOUNT JF Amount Date 5000 Mar-31 5000 5000 SALARY ACCOUNT JF Amount Date 6000 Mar-31 6000 6000

Date Mar-28

Particulars To Bank A/C

Apr-01

To Balance b/d

Date Mar-28

Particulars To Bank A/C

Apr-01

To Balance b/d

S.No

Particulars

1 2 3 4 5 6 7 8 9 10 11 12 13 14

Cash Account Capital Account Purchases Account Furniture Account Suresh Account Sales Account Mahesh Account Purchases Return Account Sales Return Account Bank Account Discount Account Drawings Account Rent Account Salary Account

Trial Balance Debit Rs. 96500

Particulars By Balance c/d

JF

Amount 5000 5000

Particulars By Balance c/d

JF

Amount 6000 6000

Credit Rs. 100000

30000 6000 50 55000 500 500 9000 50 2500 5000 6000 155550

155550