0444 Assignment No 2 Solution 2022-Autumn AIOU-Q 1 Ans-Advance Accounting
0444 Assignment No 2 Solution 2022-Autumn AIOU-Q 1 Ans-Advance Accounting
Question
The Yasir Corporation was registered with a nominal Capital of Rs.
1,200,000 divided into equity shares of Rs. 10 each. On 31 March 2021 the following ledger balance were extracted from the company’s book:
Equity Share Capital up and Paid Up 920,000 10% Debentures 600,000
Plant and Machinery 720,000 Sales 830,000
Stock (1-4-2020) 150,000 5% Govt. Securities 120,000
Fixtures 14,400 Reserve for Doubtful Debts 7,000
Preliminary expenses 10,000 Sundry Creditors 100,000
Freight and Duty 26,200 Sundry Debtors 174,000
Goodwill 50,000 Buildings 600,000
Wages 169,600 Bad debts 4,220
Cash in hand 19,700 Commission paid 14,400
Cash at bank 76,600 Salaries 29,000
Director’s fees 11,480 Purchases 370,000
Bills Payable 76,000 Interim dividend paid 15,000
General Reserve 50,000 Rent 9,600
Profit & Loss A/c (Cr) 1-4-2020 29,000 General Expenses 9,800
Office Equipment 8,000 Debenture Interest 10,000
The following adjustments were to be made:
i. The Stock on 31st March, 2021 was estimated at Rs. 200,000
ii. Final Dividend at 10% to be provided.
iii. Depreciation on Plan and Machinery at 10% and on Fixtures at 5%
iv. Preliminary expenses to be written off
v. Rs. 30,000 were to be transferred to General Reserve
vi. The provision for bad debts to be maintained at 10% on sundry debtors
Required:
You are required to prepare the
(i) Trading and Profit and Loss
Account and
(ii) Profit and Loss Appropriation Account for the year ended 31st March 2021 and the
(iii) Balance sheet as on that date.
Question
The Yasir Corporation was registered with a nominal Capital of Rs.
1,200,000 divided into equity shares of Rs. 10 each. On 31 March 2021 the following ledger balance were extracted from the company’s book:
Equity Share Capital up and Paid Up 920,000 10% Debentures 600,000
Plant and Machinery 720,000 Sales 830,000
Stock (1-4-2020) 150,000 5% Govt. Securities 120,000
Fixtures 14,400 Reserve for Doubtful Debts 7,000
Preliminary expenses 10,000 Sundry Creditors 100,000
Freight and Duty 26,200 Sundry Debtors 174,000
Goodwill 50,000 Buildings 600,000
Wages 169,600 Bad debts 4,220
Cash in hand 19,700 Commission paid 14,400
Cash at bank 76,600 Salaries 29,000
Director’s fees 11,480 Purchases 370,000
Bills Payable 76,000 Interim dividend paid 15,000
General Reserve 50,000 Rent 9,600
Profit & Loss A/c (Cr) 1-4-2020 29,000 General Expenses 9,800
Office Equipment 8,000 Debenture Interest 10,000
The following adjustments were to be made:
i. The Stock on 31st March, 2021 was estimated at Rs. 200,000
ii. Final Dividend at 10% to be provided.
iii. Depreciation on Plan and Machinery at 10% and on Fixtures at 5%
iv. Preliminary expenses to be written off
v. Rs. 30,000 were to be transferred to General Reserve
vi. The provision for bad debts to be maintained at 10% on sundry debtors
Required:
You are required to prepare the
(i) Trading and Profit and Loss
Account and
(ii) Profit and Loss Appropriation Account for the year ended 31st March 2021 and the
(iii) Balance sheet as on that date.
Category
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LearningTranscript
00:00bismillahirrahmanirrahim assalamu alaikum dear students and viewers welcome to my
00:04YouTube channel Dijital Learner Bahadur Debu with your address the question
00:07number one which is related to the side number two of subject ATOMOS
00:12supporting which has a subject code 0344 and it is related to the second
00:18assignment of ATOM semester 2022 of AIOU examination system so it's total
00:26marks are 20 let's start reading the question then we will move to the
00:30requirement of this question and finally we will see the solution of this
00:36question the YASAR cooperation was registered with the nominal capital
00:40rupees 1.2 million divided into equity shares of rupees 10 each on 31st March
00:472021 the following budget balances were extracted from the company's book equity
00:55share capital capital up and paid up rupees 920,000 plant and machine is
01:02720,000 stock opening stock as on 1st April 2022 150,000 fixtures 14,400
01:12preliminary expecting 10,000 right and duty 26,200 goodwill 50,000 which is
01:20169,600 and the cash in hand 19,700 cash at back 76,600 directors fees 11,480
01:32bills payable 76,000 76,000 and general reserve 50,000 on the other hand profit
01:44and loss account credit means not loss it is a profit and balance will be
01:50appearing on the credit side of the profit and loss account 29,000 opposite
01:55payment 8,000 and other information on the second column is 10%
02:01investment 600,000 not investment it is
02:09hello sales 830,000 500 government security it is investment 120,000
02:19reserves for debt 7,000 and 100,000 and the debtors 174,000
02:28building 600,000 bad debts 4,220 commission paid 14,400 and salaries 29,000
02:38purchase is 370,000 and in term dividend paid 15,000 ranked 9,600 and general
02:46expenses are 9,800 different just interest is equal to 10,000 the
02:52following adjustments were to be made and the stock on 31st March 2021 was
02:57estimated at P 200,000 closing stock for a dividend at 10% to be provided
03:04other than this dimension interest it is dividend dividend it means the profit
03:12the portion of the profit paying to this shareholders depositions on plant and
03:19machining at 10% and fixtures on 5% preliminary expenses to be written off
03:25totally written off it is a part of it's asset it is a capital expense
03:31it is 30,000 what to be transferred to general reserves the provision for bad
03:36debts to be maintained at 10% on secondary debtors first you are required
03:42to prepare the trading and profit and loss account and profit and loss of
03:45expression account for the year ended 31st March 2021 and the balance sheet as
03:50on that date so basically we have three requirements two is related to profit
03:57and loss count and the one is balance sheet so let's move to the solution the
04:02solution I have made in excel sheets so here is the solution so your self
04:10corporation trading and profit and loss count so particular the opening stock
04:15150,000 purchase is 370,000 wages 169,000 depreciation plant and machinery
04:23please collect this one spelling machinery because plant and machinery is
04:31directly involved in the production of the goods so I am taking this
04:35depreciation as a part of cost of goods sold so it will not be covered in the
04:41expenses so I will have written it in under the cost of goods sold portion are
04:47trading and profit and loss count fight and duty 26,000 and it is obtained how by
04:54multiplying 720,000 with 0.10 and fight and duty is equal to 26,200
05:02gross profit is the balancing figure of by subtracting from this amount look at
05:10this I am going to show this one how much amount is there 761,600 I am going
05:17to subtract it from sorry say 787,800 from this amount we will get this
05:28balance figure which is termed as gross profit which is equal to
05:32242,200 so like this gross profit on this side 242,200 interest income is
05:44receiving from investment made in government securities at 5% so 6,000 is
05:51here so now come to the indirect expenses I am going to be delete this
05:57one and director's fees 11,480 preliminary expenses we are going to
06:03totally write off means we are going to charge as expense to the profit and loss
06:07count indirect expenses commission paid 14,400 salaries for 29,000 and 9,600
06:15general expenses 9,800 debentures interest which is are already paid some
06:2210,000 and debenture interest at 10% 60,000 so depreciation fixed is equal to 720
06:33this is a depreciation and bad debts is equal to how we will get this bad debts
06:37so bad debts 4,220 plus new one at a rate of 10% which is equal to 17,400
06:46and minus 7,000 old one so profit balancing figure is 78,580 which will be
06:56transferred to the profit and loss preparation account one thing more I
07:00want to share with you here regarding the profit and loss preparation account
07:04is that it is totally related with the profit and distribution to the share
07:11equity so look at this is a last year profit balance carried on 29,000 as
07:16given in the information table so current year profit which has been come
07:21from the profit and trading profit and loss count so interim dividend which is
07:25a part of the tile balance extended table
07:32final dividend proposed it is obtained by paid up capital equity share capital
07:39paid up capital of 92,000.01 so please remember that I am going to take this
07:46point one of the share capital if paid up capital is more than which is termed
07:51as premium and premium capital share premium capital so we will not take into
07:57account that amount so we are going to on the face value nominal value of the
08:02share we are determined it then as the 30,000 has been transferred so I have
08:08written it here so the loss here in this case there is a loss 29,120
08:13which is a balancing figure of this account and this balancing figure will
08:19transfer to the balance sheet under the adding of equity and share capital and
08:25further subdivision reserves so come to the last requirement of this question
08:31balance sheet so asset is equal to current assets cash in hand and cash
08:36income cash advance and the debtor stock so 970 19,700 6,000 76,600 156 200
08:46thousand on the right-hand side the current liabilities and the creditors
08:55you see that the debtor is 150 because I have subtracted and the premium for
09:02doubtful debt which is equal to 17,400 from the entry debtor so that amount we
09:07are going to return here 156,600 so here interest liability against
09:15debentures so you can it is good to be right here so bills payable 76,000 per
09:34post dividend 92,000 which is also the part of this is profit and loss
09:44profession account here but here it is a become as a part of to distribute to
09:52this share capital order but here as a part of liability because we didn't pay
09:58this we just create a liability against this per post dividend so come to the
10:04total assets not non current asset affects as a built-in 600,000 plant and
10:09machinery 720,000 is a conventional way of writing negative values in the
10:17accounting system so 72,000 is depreciation which is subtracted from the cost of the
10:26plant and machinery and which might be the initial or book value of which
10:33equipment 8,000 and no depreciation is started here because no information
10:39given according the rate of office equipment pictures 14,000 14 14,400
10:44accumulated depreciation pictures 725 percent government securities 120,000
10:52and 6,000 is the income interest here 120,000 I think I have a machine here
11:01here which is achievable so goodwill also fixes a 50,000 and one thing we
11:13might have to name any expenses has been right up from here because of it has
11:18been written up and the charge as expressed in the income statement now
11:23come to the non current liabilities 600,000 10% differential if we get share
11:28capital or thrice capital 120 shares at rupees 10 which is equal to 1.2 million
11:35share issued and paid up capital 92,000 shares at rupees 10 means and now issued
11:43shares are at par value not at premium not at discount 920,000 reserve we have
11:49put as a reserve general reserves profit and loss count look at this from the
11:56information given in the table we already have is a 50,000 and we have
12:00transferred 30,000 from the profit so it will become 80,000 and often a loss
12:06count of the last third quarter last month is 29,420 so total is 90 and total
12:17970,580 which is equal to which is which is represent the equity and share
12:27capital total and we have a total liability and this one current liability
12:33current asset plus non current asset here here it is total liability which is
12:39including equity and share capital non current asset and current liability look at
12:47this both sides are equal so the solution is finished here so I hope you
12:54will find this solution useful and easy to understand but if you have any
12:58question you can ask me in the comment section or if you want to add something
13:03more from your side provide your suggestion in comment section as well
13:08but with logical arguments and last thing if you found any mistake regarding
13:13calculation please also correct it in the comment section for the benefit of
13:18all thanks for watching assalamu alaikum