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An unadjusted trial balance of a company are given below: Particulars Debit (Rs.) Credit (Rs.) Cash 300,000…

An unadjusted trial balance of a company are given below:

Particulars Debit (Rs.) Credit (Rs.)
Cash 300,000
Bank 250,000
Discount Allowed 7,000
Plant and Machinery 200,000
Purchases 215,000
Debtors 90,000
Particulars Debit (Rs.) Credit (Rs.)
Interest on loan 8,000
Salary 120,000
Rent 70,000
Capital 400,000
Creditors 50,000
Commission Received 10,000
Sales 700,000
12% Bank Loan 100,000
Total 1,260,000 1,260,000

Adjustment:

a. Closing stock Rs. 40,000

b. Prepaid rent was Rs. 10,000

c. Outstanding interest on bank loan was Rs. 4,000

d. Depreciation on Plant and Machinery at 15% per annum

Required:

i. Adjusted Trail balance

ii. Statement of Profit and Loss a/c

iii. Statement of Financial Position

iv. Statement of Cash flow Statement

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  1. 1.

    "Financial accounting is a specialized branch of accounting that keeps track of a company's financial transactions," discuss.

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  2. 2.

    The financial transaction of a trader are provided below:

    a. Started business with cash Rs. 300,000, which was collected by issuing the shares of Rs. 100 each.

    b. Rs. 200,000 was deposited into bank.

    c. An equipment costing Rs. 100,000 was purchased and payment made by a cheque.

    d. An equipment costing Rs. 60,000 was purchased on credit.

    e. Sold goods on credit for Rs. 170,000.

    f. Received a cheque from debtor, Rs. 135,000 after deduction of 10% discount.

    g. Paid Rs. 47,500 to creditor after deducting 5% discount.

    h. Rs. 15,000 was paid for electricity bill.

    i. Paid wages Rs. 20,000 and office salary Rs. 25,000 by issuing cheques.

    j. Paid Rs. 20,000 as rent by issuing a cheque for the period.

    Required:

    • i. Journal entries

    • ii. T accounts (ledger) for sales, purchase, account receivable and account payable

    • iii. Triple column cash book

    • iv. Trial Balance

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    Define the source of documents. Also, write down the types of source of documents.

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    "The purpose of financial statement analysis is to reveal financial strengths and weaknesses of the firm," discuss.

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  5. 5.

    a) On 31st Chaitra 2075 Bank Statement of KK Company disclosed a balance of Rs. 25,000 and Cash Book showed the balance of Rs. 30,000.

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    ii. Cheques issued of Rs. 8,000 but only Rs. 3,000 presented before 31st Chaitra.

    iii. Notes receivable collected by the bank Rs. 5,000.

    iv. Cash of Rs. 6,000 deposited by the company on Chaitra was recorded by the bank as Rs. 4,000.

    v. A cheque for Rs. 8,000 received from a customer was returned by the bank due to insufficient fund with the bank.

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  6. 6.

    (a) XYZ Company purchase a machine on 1st Jan 2016 for Rs. 500,000. The estimated life of machine is 10 years. Prepare machinery account for first three years on straight line method and the accounts are closed on 31st Dec.

    (b) Differentiate between capital and revenue expenditure.

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