Solution Beta (Private) Limited Balance Sheet As At June 30, 2002 Lecture 1 Solution Beta (Private) Limited Balance Sheet As At June 30, 2002 Particulars Note Amount Rs. Fixed Assets at WDV 1 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 Capital 63,789 Net Assets Employed 556,119 Double underline

Solution Financed By: Authorized Capital 50,000 Shares of Rs. 10 each Lecture 1 Solution Double underline Financed By: Authorized Capital 50,000 Shares of Rs. 10 each 500,000 Paid Up Capital 30,000 Shares of Rs. 10 each General Reserve Accumulated Profit and Loss Account 2 300,000 8,000 8,119 Share Holders Equity Debentures 316,119 240,000 Total 556,119 Double underline Note: Slide 1 and 2 will be shown together and then zoomed one by one as done in earlier lectures.

Note 1 – Fixed Assets at WDV Lecture 1 Note 1 – Fixed Assets at WDV Particulars Cost Rate Accumulated Depreciation WDV As At 1-7-01 Addition/ Deletion 30-6-02 For The Year Land 120,000 Building 315,000 10 66,000 24,900 90,900 224,100 Furniture & Fixtures 34,500 11,250 2,325 13,575 20,925 Vehicles 187,500 46,050 14,145 60,195 127,305 TOTAL 657,000 123,300 41,370 164,670 492,330 Double underline Note: to be Zoomed in two parts as done in lecture 38

Calculation of Depreciation Lecture 1 Calculation of Depreciation Building 315,000 – 66,000 = 249,000 x 10% = 24,900 Furniture 34,500 – 11,250 = 23,250 x 10% = 2,325 Vehicles 187,500 - 46,050= 141,450 x 10% = 14,145

Note 2 – Accumulated Profit and Loss Acocount Lecture 1 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

Fixed Assets Schedule with Addition / Deletion Lecture 1 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

Accumulated Depreciation Lecture 1 Particulars Cost R A T E Accumulated Depreciation WDV As At 1-7-01 Addition/ Deletion 30-6-02 On Disposal For The Year Land 120,000 Building 315,000 10 66,000 24,900 90,900 224,100 Furniture and Fixture 34,500 15,000 49,500 11,250 3,825 15,075 34,425 Vehicles 187,500 750,000 (187,500) 46,050 (46,050) 75,000 675,000 TOTAL 657,000 577,500 1,234,500 123,300 (66000) 105720 163,020 1,053,525 Note: to be Zoomed in two parts as done in lecture 38 Double underline

Calculation of Depreciation Lecture 1 Calculation of Depreciation Building 315,000 – 66,000 = 249,000 x 10% = 24,900 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 Vehicles 750,000 – 0 = 750,000 x 10% = 75,000

Disposal of Fixed Asset Account Lecture 1 Disposal of Fixed Asset Account Assets Disposal Account Debit side. Cost 187,500 Profit and Loss A/c 8,550 Credit side. Acc.Dep. 46,050 Sale Proceeds 150,000

Lecture 1 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.

Trial Balance as at June 30, 2002 Lecture 1 Delta Limited Trial Balance as at June 30, 2002 Title of Account Dr. Rs. Cr. Rs. Paid up capital 1,100,000 Accumulated Profit and Loss Account 308,520 Land 200,000 Building 585,000 Machinery 495,000 Vehicles 115,000 Accumulated Dep. – Building 85,000 142,200 30,000 Purchases 1,815,282

Provision for Doubtful Debts 1-7-01 7,749 Lecture 1 Title of Account Dr. Rs. Cr. Rs. Sales 2,851,290 Office Maintenance 289,512 Salaries 487,863 Rent 38,700 Electricity 13,941 Bad Debts Written off 6,732 Provision for Doubtful Debts 1-7-01 7,749 Debtors 196,056 Creditors 157,437 Stock 1-7-01 231,201 Cash and Bank Balance 207,909 TOTAL 4,682,196

Following adjustments are required to be made: Lecture 1 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

Balance Sheet As At June 30, 2002 Lecture 1 Solution Delta Limited Balance Sheet As At June 30, 2002 Particulars Note Amount Rs. Fixed Assets at WDV 1 Current Assets 1,060,520 Debtors 2 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 Capital 365,835 Net Assets Employed 1,426,355 Double underline

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

Profit and Loss Account for the Year Ended June 30 2002 Lecture 1 Delta Ltd Profit and Loss Account for the Year Ended June 30 2002 Note RS. Sales 2,851,290 Less: Cost of Goods Sold 3 1,784,205 Gross Profit 1,067,085 Less: Expenses Salaries and Wages 4 493,092 Office Maintenance 289,512 Rent 5 36,000 Electricity 13,941 Bad Debts Provision for bad debts 6 6,732 693 Depreciation 1 77,280 917,250 Net Profit 149,835

Less: Dividend Declared 132,000 Lecture 1 Less: Dividend Declared 132,000 17,835 Add: Accumulated Profit Brought Forward 308,520 Accumulated Profit Carried Forward 326,355 Double underline Note: Slide 16 and 17 will be shown together and then zoomed one by one as done in earlier lectures.

(1) Fixed Assets at WDV Particulars Cost R A T E Acc. Dep. WDV As At Lecture 1 (1) Fixed Assets at WDV Particulars Cost R A T E Acc. Dep. WDV As At 1-7-01 Addition/ Deletion 30-6-02 For The Year Land 200,000 Building 585,000 5 85,000 25,000 110,000 475,000 Machinery 495,000 10 142,200 35,280 177,480 317,520 Vehicles 115,000 20 30,000 17,000 47,000 68,000 TOTAL 1,395,000 257,200 77,280 334,480 1,060,520 Note: to be Zoomed in two parts as done in lecture 38 Double underline

Doubtful Debts(note 6) (8,442) 187,614 Lecture 1 (2) Debtors Debtors 196,056 Less: Provision for Doubtful Debts(note 6) (8,442) 187,614 Double underline

(3) Cost of Goods Sold Opening Stock 231,201 Add: Purchases 1,815,282 Lecture 1 (3) Cost of Goods Sold Opening Stock 231,201 Add: Purchases 1,815,282 Cost of Goods Available for Sale 2,046,483 Less: closing stock (262,278) 1,784,205 Double underline

(4) Salaries (5) Rent Salaries and Wages Debit side. Paid 487,863 Lecture 1 (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

(6) Provision for Doubtful Debts Lecture 1 (6) Provision for Doubtful Debts Provision Debit side. Balance 8,442 Credit side. Bal. B/F 7,749 P&L A/c 693