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Q. 1 Assure you have just started a Mobile store.

You sell mobile sets and currencies of Airtel, Vodaphone, Reliance and BSNL. Take five transactions and prepare a position statement after every transaction. Did you firm earn profit or incurred loss at the end? Make a small comment on your financial position at the end. Answer : Q. 2 (a) List the accounting standards issued by ICAI. Answer : To bring uniformity in terminology, accounting concepts, conventions and assumptions, the Institute of Chartered Accountants of India (ICAI) established Accounting Standards Board (ASB) in 1977. An Accounting Standard is a selected set of accounting policies or board guidelines. There are altogether 32 accounting standards issued by ASB out of which, one standard AS8 has been pursuant to AS26 becoming mandatory. Below chart shows 32 Accounting Standards. Mandatory from Recommend accounting Title ary or period Mandatory beginning on or after Disclosure of Accounting Mandatory 1.4.1991 Policies Valuation of Inventories Mandatory 1.4.1999 Cash Flow Statement Mandatory 1.4.2000 Contingencies and events Mandatory 1.4.1995 occurring after the Balance Sheet date (revised) Prior Period and Mandatory 1.4.1987 extraordinary items and changes in Accounting Policies Depreciation Accounting Mandatory 1.4.1995 (revised)

AS No. AS-1 AS-2 AS-3 AS-4 AS-5

AS-6

AS-7 AS-8 AS-9 AS10 AS11 AS12 AS13 AS14 AS15 AS16 AS17 AS18 AS19 AS20 AS21 AS22 AS23 AS24

Accounting for construction contracts Accounting for Research and Development Revenue Recognition Accounting for Fixed Assets Accounting for the effects of changes in foreign exchange rates (revised) Accounting for Government Grants Accounting for Investment

Mandatory Mandatory Mandatory Mandatory Mandatory Mandatory -------------------

1.4.1991 1.4.1991 1.4.1991 1.4.1991 1.4.1995 1.4.1994 --------------------1.4.1995 1.4.1995 1.4.2000 1.4.2001 1.4.2001 1.4.2001 1.4.2001 1.4.2001 1.4.2001 1.4.2002

Accounting for Mandatory Amalgamation Accounting for retirement Mandatory benefits in the financial statement of employers Borrowing Costs Mandatory Segment Reporting Related party disclosure Leases Earnings per Share Consolidated financial statement Accounting for taxes on income Accounting for investments in associates in consolidated financial statements Discontinuing operations Mandatory Mandatory Mandatory Mandatory Mandatory Mandatory Mandatory

Mandatory

1.4.2002

AS25 AS26 AS27 AS28 AS29 AS30 AS31 AS32

Interim financial reporting Intangible assets

Mandatory Mandatory

1.4.2002 1.4.2003 1.4.2002 1.4.2004 1.4.2004

Financial reporting of Mandatory interests in joint venture Impairment of assets Mandatory Provisions, Contingent Liabilities & Contingent Assets Financial Instruments: Recognition, Measurement and Limited Resources Financial Instruments: Presentation Financial Instruments: Disclosure and limited revision to AS 19 (leases) Mandatory

Mandatory 1.4.2009 from 1.4.2011 Mandatory 1.4.2009 from 1.4.2011 Mandatory 1.4.2009 from 1.4.2011

AS 8 was withdrawn in pursuant to AS 26 becoming mandatory. 20 accounting standards are issued as of date and only 28 is applicable. AS 30,31,32 are published and affected from 1.2009 and mandatory from 1.4.2011 Q. 2 (b) Write short notes on IFRS. Answer : The IFRS (International Financial Reporting System) are standards, interpretations and framework for the preparation and presentation of financial statements. IFRS was framed by International Accounting Standard Board (IASB). The objective of financial statement is to provide information about the financial position, performance and changes in the financial position of an entity. IFRS follows accrual basis of accounting and financial statements are prepared on the basis

that an entity will continue for the foreseeable future. IFRS helps entities access global capital market with ease. Under IFRS, we need to submit a statement of financial position, comprehensive income statement, either a statement of changes in equity or statement of recognized income or expenses, cash flow statement and notes including summery of significant accounting policies. Q. 3 Prepare a three column Cash Book of M/S Thuglak & Co. from the following particulars : 20 X 1 1. Cash in hand Rs. 50,000, Bank Overdraft Rs. Jan 20,000. 2. Paid into bank Rs. 10,000 3. Bought goods from Hari for Rs. 200 for each. 4. Bought goods for Rs. 2,000 paid cheque for them, discount allowed 1%. 5. Sold goods to Mohan for each Rs. 1.175 6. Received a cheque from Shyam to whom goods where sold for Rs. 800. Discount allowed 12.5% 7. Shyams cheque deposited into Bank. 8. Purchased an old typewriter for Rs. 200, Spent Rs. 50 on its repairs. 9. Bank notified that Shyams cheque has been returned dishonored and debited the account in respect of charges Rs. 10. 10. Received a money order Rs. 25 from Hari. 11. Shyam settled his account by means of a cheque for Rs. 820, Rs. 20 being for interest charged. 12. Withdraw from the bank Rs. 10,000 18. Discounted a B/E for Rs. 1,000 at 1% through bank. 20. Honored our own acceptance by cheque Rs. 5,000. 22. Withdraw fir personal use Rs. 1,000.

24. Paid trade expenses Rs. 2,000. 25. Withdraw from bank for private expenses Rs. 1,500. 26. Purchased machinery from Rajiv for 5,000 and paid him by means of a bank draft purchased for Rs. 5,005. 27. Issued cheque to Ramsaran for cash purchased of furniture Rs. 1,575. 28. Received a cheque for commission Rs. 500 from R & Co. and deposited into Bank. 29. Ramesh who owned us Rs. 500 become bankrupt and paid us 50 paisa in the rupee. 30. Received payment of a loan of Rs. 5,000 and deposited Rs. 3,000 out of into bank. 31. Paid rent to landlord Mohan by cheque of Rs. 220. 31. Interest allowed by bank Rs. 30. 31. Half-yearly bank charges Rs. 50 Q. 4 Choose an Indian Company of your choice that has adopted Balance Score Card and detailed on it. Q. 5 From the following data of Jagdish Company prepare (a) a statement of source and uses of working capital (funds) (b) a schedule of changes in working capital. Assets 2008 2007 Cash 1,26,000 1,14,000 Short-term investment 42,400 20,000 Debtors 60,000 50,000 Stock 38,000 28,000 Long term investment 28,000 44,000 Machinery 2,00,000 1,40,000 Building 2,40,000 80,000 Land 14,000 14,000 Total 7,48,400 4,90,000 Liabilities and Equity Accumulated 1,10,000 60,000 depreciation

Creditors Bills Payable Secured Loans Share Capital Share premium Reserves and surplus Total Income Statement

40,000 20,000 2,00,000 2,20,000 24,000 1,34,000 7,48,400

30,000 10,000 1,00,000 1,60,000 Nil 1,30,000 4,90,000

Sales Cost of Goods sold Gross Profit Less Operating Expenses: Depreciation 20,000 Depreciation 32,000 Other 40,000 Net profit from operation

2,40,000 1,34,600 1,05,200 Machinery Building 92,000 Expenses 13,200 4,800 18,000 2,000 16,000

Gain on sale on long term investment Total Loss on sale of machinery Net Profit

Adjustments: 1) Machinery worth Rs. 70000 was purchased and worth Rs. 10000 was sold during the year (accumulated depreciation on machinery is Rs. 18000 after adjusting depreciation on machinery sold). Proceeds from the sale of machinery were Rs. 6000. 2) Dividends paid during the year Rs. 11600 Q.6 What is cash budget? How it is useful in managerial decision making? Answer :

Cash Budget :