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Assignment 1
Question 1
Text Book ( 12th edition) Exercise 2.5 Page 69
Question 2
Problem 2.3A page 72
Question 3 Transaction Analysis
Delhi Chemical is a newly established joint stock company ( private limited
company) . It commenced business on And from 1.4.2012
1. Ten members contributed for 100 cr. equity share of Rs. 10 per share at a
premium of Rs. 10 each.
2. The company took term loan from bank amounting to Rs. 500 cr. @ 12%
interest p.a. Interest is payable annually on 31 March. Interest is computed on
day count basis. Term loan is repayable in five equal annual installments
commencing on 31 March , 2014.
3. The company also took working capital loan of Rs. 500 cr. @ 10% p.a. It also
enjoys overdraft facilities.
4. Purchase of assets :
Plant and machinery Rs. 800 Cr. cash Rs. 600 Cr. , due to vendor Rs. 200 Cr.
Construction of building Rs. 100 Cr
Purchase of land Rs. 100 Cr.
Purchase of equipment Rs. 100 cr.
Purchase of patent right Rs. 200 cr
Purchase of software license Rs. 50 cr.
Estimate useful life and residual life of depreciable assets :
Assets
Plant and Machinery
Building
Equipment
Patent right
Software
5. Purchase of raw material 10,00,000 tons @ Rs. 16000 per ton excluding
excise duty and VAT
- Excise duty 20% , VAT 5%
- of which 20% remains in godown
- Credit purchase 80%
- Payment to trade payables 90% of credit purchases
16. Interests on term loan and working capital loan was not paid on 31 March ,
2013.
Required :
Transaction analysis showing journal entries
Cash Book and other ledger accounts
Trial Balance
Question 4
Prepare a comparative depreciation table for the following asset applying
straight line depreciation method and reducing balance method.
Original cost of machinery Rs. 200 lacs
Estimated useful life 10 years
Scrap value 5% of original cost.
Question 5
From the following ledger account balances and other information , Prepare
Trial Balance as on 31 . 3.2013 .
Balances of ledger accounts
Equity share capital of Rs.10 each
Equipment
General Reserve
Sales
Purchase of stock in trade
Investments in Government Bonds
Loans to Group Companies
Security Deposit with suppliers
Advance from customers
Salaries and wages
Advertisements
Interest income
Repairs and Maintenance
Outstanding Repairs and
Maintenance
Trade Payables
Trade Receivables
Bank Balance
Office expenses
Audit fees
Legal expenses
Accumulated depreciation
Advance tax
Rs. lacs
500
1200
1000
5000
2800
1000
200
100
25
400
100
100
100
20
120
300
194
100
60
80
120
425
100
5
200
69
Other Information:
1. IT depreciation rate for equipment is 15% on written down value method.
The asset is operating at its 3rd year.
2. Accounting depreciation charge for 2012-13 Rs. 60 lacs
3. Closing stock of stock in trade Rs. 125 lacs
4. Interest on term loan is outstanding as on 31.3.2013. Term loan was
taken on 1.10.2012.
5. Transfer to Reserve Rs. 300 lacs
6. Proposed dividend 50%. Dividend distribution tax Basic tax 15% ,
surcharge 5% on basic tax , education cess 3%.
7. Charge deferred tax expense for the year 2012-13.
8. Investments in Government Bonds are expected to be sold within next 12
months
9. Security deposit with suppliers will not be collected within next 12
months
10. Repayment schedule for Loans to Group Companies :
30.9.2013 25%
30.9.2014 50%
30.9.2015 25%
The loan is free of interest.
Show in the notes details of Reserves and Surplus , Other Current Liabilities and
Short term provisions. Also show tax computation. You may prepare Trial
Balance including current tax expense and deferred tax expense, current
depreciation and interest.