Interest is payable on quarterly basis, so Quarter 1 = June - Aug Quarter 2 = Sep - Nov

i)

Opening Balance = 600,000.00 Interest Interest = 28,500.00 = 28,500.00 At year end Dec, a total total entry will be made the above entries are related to indvidual head so.. Debit Interest Expense = 66,500.00 Credit Cash = 57,000.00 Credit Payables = 9,500.00 At last month the interest will account for next year as not yet has paid. Asset Cost Economic Life Depreciation = 1,500,000.00 25.00 = = 60,000.00

ii)

Years

iii)

27,000 was related to 3 years insurance expense where OCT-DEC quarter fall in this year so Debit Insurance Expense = 2,250.00 At 1st OCT : Debit Insurance = 27,000.00 Recieveables At 31 DEC : The balance of insurance = 24,750.00 recieveable will adjusted At 1st NOV Credit Rental Prepaid Liability At 31 DEC Debit Rental Income Credit Rental Prepaid Liability Rental Prepaid Liability will adjust to

iv)

= = = =

36,000.00 12,000.00 12,000.00 24,000.00

v)

The first entry will be passed of total loan but total no of bonds are not told. So Debit Interest Expense 866.67 per bond = Credit Cash (May-Sep) 541.67 = Creidt Payable Interest (3 months) / interest recieveable = 325.00 (3 months) Lisence is an asset that enables business to operate so any benefits should be occurred over the one year period from (OCT - SEP) and same for expense. At 31 DEC:

vi)

Debit Liscence Depreciation = / Prepaid Expense Account At Oct 1: Debit Liscence Prepaid / = Asset At 31 DEC: The balance of liscence = prepaid asset by

1,000.00

4,000.00

1,000.00

Quarter 3 =

Dec

Interest = 9,500.00 ted to indvidual head so..

paid.

in this year so

told. So

over the one year period

Khalid Plumbing Services

Balance Sheet As on 31st June, 2001
Assets
Current Assets Cash Debtors Non current Assets Delievery Truck Tools 29,300.00 15,400.00 69,000.00 23,800.00 137,500.00 (M/F) is Missing Figure calculated from very equation: 137,500.00 Creditors Owner's Equity (M/F) 1,400.00 136,100.00

Rs

Liabilities + Owner's Equity

Rs

Assets = Liabilities + Owner's Equity

Supertech co.
Balance Sheet December 31,2000
i) Assets Cash Debtors Stocks Plant & Equipment Total Assets Sales Cost of Goods Sold 625,000.00 39,041.10 256,849.32 250,000.00 79,109.59 625,000.00 1,250,000.00 1,000,000.00 Liabilities & Stock holder's Equity Creditors long Term Debt Common Stock Retained Earnings 625,000.00 147,945.21 67,054.79 150,000.00 260,000.00

ii)

iii)

Assumption :

This question is attempted with the assumption that this I sfirst working year at supertech Co. iv)

v)

vi)

vii) vii)

Stock Turn Over Sales Recieveables / Debtors Avg. collection Period 75.00 Recieveables / Debtors

= Sales / Stocks = 1,250,000.00 = = = = ? 365 x Recievables / sales 365 x Recievables / sales 256,849.32

Credit Purchasers Creditors Period 72.00 Payables / Creditors

= = = = =

60 % of sales 750,000.00 365 x Payables / purchases 365 x Payables / purchases 147,945.21

Total assets turnover 2.00 Totals Assets

= = =

sales / Total Assets sales / Total Assets 625,000.00

Quick Ratio 2.00 Current Assets Cash

= = = = = = =

Current Assets / Current Liabilities

Current Assets / 147945 295,890.41 Current Assets - Debtors (295,890 - 256,849) Total Assets - stocks - debtors - cash Total Assets - Reatined Earnings - Common Stock - Creditors

Plant & Equipment Long Term Debit