2. Financial Accounting 1 Lecture – 39 Solution Beta (Private) Limited Balance Sheet As At June 30, 2002 ParticularsNoteAmount Rs. Fixed Assets at WDV1 Current Assets 492,330 Debtors Stock in Trade Bank Balance 42,525 48,630 14,994 Current Liabilities 106,149 Creditors Proposed Dividend 27,360 15,000 42,360 Working Capital63,789 Net Assets Employed556,119 Double underline

3. Financial Accounting 2 Lecture – 39 Solution Financed By: Authorized Capital 50,000 Shares of Rs. 10 each500,000 Paid Up Capital 30,000 Shares of Rs. 10 each General Reserve Accumulated Profit and Loss Account2 300,000 8,000 8,119 Share Holders Equity Debentures 316,119 240,000 Total556,119 Double underline Note: Slide 1 and 2 will be shown together and then zoomed one by one as done in earlier lectures.

4. Financial Accounting 3 Lecture – 39 Note 1 – Fixed Assets at WDV Particulars CostRateAccumulated DepreciationWDV As At 1-7-01 Addition/ Deletion As At 30-6-02 As At 1-7-01 For The Year As At 30-6-02 As At 30-6-02 Land120,0000 0000 Building315,0000 1046,05026,89572,945242,055 Furniture & Fixtures34,5000 1011,2502,32513,57520,925 Vehicles187,5000 1066,00012,15078,150109,350 TOTAL657,0000 123,30041,370164,670492,330 Note: to be Zoomed in two parts as done in lecture 38 Double underline

5. Financial Accounting 4 Lecture – 39 Calculation of Depreciation Building315,000 – 46,050 = 268,950 x 10% = 26,895 Furniture 34,500 – 11,250 = 23,250 x 10% = 2,325 Vehicles750,000 – 0 = 750,000 x 10% = 75,000

6. Financial Accounting 5 Lecture – 39 Note 2 – Accumulated Profit and Loss Acocount Balance As Per Trial Balance 49,489 Less: Depreciation for the Year (note 1)(41,370) 8,119 Double underline

7. Financial Accounting 6 Lecture – 39 Fixed Assets Schedule with Addition / Deletion Addition during the year Furniture and Fixture – Cost Rs. 15,000 Vehicles – Cost Rs. 750,000 Deletion / Disposal Vehicle– Cost Rs. 187,500 Sale Proceeds– Rs. 150,000

8. Financial Accounting 7 Lecture – 39 Particulars Cost RATERATE Accumulated DepreciationWDV As At 1-7-01 Addition/ Deletion As At 30-6-02 As At 1-7-01 On Disposal For The Year As At 30-6-02 As At 30-6-02 Land120,0000 0000 Building315,0000 1046,05026,89572,945242,055 Furniture and Fixture34,50015,00049,5001011,2503,82515,07534,425 Vehicles187,500 750,000 (187,500) 750,000 10 66,000(66,000)75,000 675,000 TOTAL657,000577,5001,234,500123,300(66000)105720163,0201,071,480 Note: to be Zoomed in two parts as done in lecture 38 Double underline

9. Financial Accounting 8 Lecture – 39 Calculation of Depreciation Building315,000 – 46,050 = 268,950 x 10% = 26,895 Furniture 34,500 – 11,250 = 23,250 x 10% = 2,325 + 15,000 x 10% = 1,500 OR 49,500 – 11,250 = 38,250 x 10% = 3,825 Vehicles750,000 – 0 = 750,000 x 10% = 75,000

10. Financial Accounting 9 Lecture – 39 Disposal of Fixed Asset Account Assets Disposal Account Debit side. Cost 187,500 Profit and Loss A/c 28,500 Credit side. Acc.Dep. 66,000 Sale Proceeds 150,000

11. Financial Accounting 10 Lecture – 39 Question The following trial balance has been extracted from the books of Delta Limited as on June 30, 2002. You are required to prepare the profit and loss account for the year and the Balance Sheet as at June 30, 2002.

12. Financial Accounting 11 Lecture – 39 Delta Limited Trial Balance as at June 30, 2002 Title of AccountDr. Rs.Cr. Rs. Paid up capital1,100,000 Accumulated Profit and Loss Account308,520 Land200,000 Building585,000 Machinery495,000 Vehicles115,000 Accumulated Dep. – Building85,000 Machinery142,200 Vehicles30,000 Purchases1,815,282

13. Financial Accounting 12 Lecture – 39 Title of AccountDr. Rs.Cr. Rs. Sales2,851,290 Office Maintenance289,512 Salaries487,863 Rent38,700 Electricity13,941 Bad Debts Written off6,732 Provision for Doubtful Debts 1-7-017,749 Debtors196,056 Creditors157,437 Stock 1-7-01231,201 Cash and Bank Balance207,909 TOTAL4,682,196

14. Financial Accounting 13 Lecture – 39 Following adjustments are required to be made: Authorized share capital is Rs. 1,100,000 divided in to 11,000 shares of Rs. 100 each. Stock in Trade on 30-6-2002 Rs. 262,278 Salaries payable amount to Rs. 5,229 Rent paid in advance amount to Rs. 2,700 Dividend of Rs. 132,000 is proposed Provision for doubtful debts is to be increased to Rs. 8,442 Depreciation Building 5%, Machinery 10% and Vehicles 20% on Written Down Value

15. Financial Accounting 14 Lecture – 39 Solution Delta Limited Balance Sheet As At June 30, 2002 ParticularsNoteAmount Rs. Fixed Assets at WDV1 Current Assets 1,060,520 Debtors2 Prepaid Rent Stock in Trade Cash and Bank Balance 187,614 2,700 262,278 207,909 Current Liabilities 660,501 Creditors Salaries Payable Proposed Dividend 157,437 5,229 132,000 294,666 Working Capital365,835 Net Assets Employed1,426,355 Double underline

16. Financial Accounting 15 Lecture – 39 Financed By: Authorized Capital 11,000 Shares of Rs. 100 each1,100,000 Paid Up Capital 11,000 Shares of Rs. 100 each Accumulated Profit and Loss Account 1,100,000 326,355 Total1,426,355 Note: Slide 14 and 15 will be shown together and then zoomed one by one as done in earlier lectures. Double underline

17. Financial Accounting 16 Lecture – 39 Delta Ltd Profit and Loss Account for the Year Ended June 30 2002 NoteRS. Sales2,851,290 Less: Cost of Goods Sold31,784,205 Gross Profit1,067,085 Less: Expenses Salaries and Wages4493,092 Office Maintenance289,512 Rent536,000 Electricity13,941 Bad Debts Provision for bad debts6 6,732 693 Depreciation177,280 917,250 Net Profit149,835

18. Financial Accounting 17 Lecture – 39 Less: Dividend Declared132,000 17,835 Add: Accumulated Profit Brought Forward308,520 Accumulated Profit Carried Forward326,355 Double underline Note: Slide 16 and 17 will be shown together and then zoomed one by one as done in earlier lectures.

19. Financial Accounting 18 Lecture – 39 (1) Fixed Assets at WDV Particulars Cost RATERATE Acc. Dep.WDV As At 1-7-01 Addition/ Deletion As At 30-6-02 As At 1-7-01 For The Year As At 30-6-02 As At 30-6-02 Land200,0000 0000 Building585,0000 585,00025,000110,000475,000 Machinery495,0000 10142,20035,280177,480317,520 Vehicles115,0000 2030,00017,00047,00068,000 TOTAL1,395,0000 257,20077,280334,4801,060,520 Double underline Note: to be Zoomed in two parts as done in lecture 38

20. Financial Accounting 19 Lecture – 39 (2) Debtors Debtors196,056 Less: Provision for Doubtful Debts(note 6) (8,442) 187,614 Double underline

21. Financial Accounting 20 Lecture – 39 (3) Cost of Goods Sold Opening Stock231,201 Add: Purchases1,815,282 Cost of Goods Available for Sale2,046,483 Less: closing stock(262,278) 1,784,205 Double underline

22. Financial Accounting 21 Lecture – 39 (4) Salaries (5) Rent Salaries and Wages Debit side. Paid 487,863 Payable 5,229 Credit side. Balance 493,092 Rent Debit side. Paid 38,700 Credit side. Prepaid 2,700 Balance 36,000

23. Financial Accounting 22 Lecture – 39 (6) Provision for Doubtful Debts Provision Debit side. Balance 8,442 Credit side. Bal. B/F 7,749 P&L A/c 693