Journalize the following transactions in the books of Mr. Walter: a) Paid rent of building $ 12,000 half of the building is used by the proprietor for residential use.
b)
c)
d)
e)
g) h) i) j) k)
Provide interest on capital ($ 60,000) at 15% p.a. for 6 months, Charge interest on drawing (10,000) at 18% p.a. for 6 months. Provide interest on loan to Ram ($ 100,000) at 18% p.a. for 2 months, Charge interest on loan to Shyam ($ 200,000) at 18% p.a. for 2 months, Received commission $ 1,000 half of which is in advance.
From following figures extracted from the books of Mr. XYZ, you are required to prepare a Trading & Profit & Loss Account for the year ended 31st March, 2008 and a Balance Sheet as on that date after making the necessary adjustments.
Salaries
Balance on 1.4.2007
b) A new machine was installed during the year costing $15,400 but it is not recorded in the books as on payment was made for it. Wages $ 1,100 paid for its erection has been debited to the wages account.
c)
Depreciate :
a. b. c. d)
Plant & machine by 33.33% Furniture by 10% Freehold property by 6% Loose tools were valued at $ 1.760 as on 31.3.2008
e)
Of the sundry debtors Rs.660 are bad and should be written off.
f)
g) The manager is entitled to a commission of 10% of the net profits after charging such commission.
Problem 3:
Following is the Trial Balance of M/s. Trinity Foods as on 30th June 2007 (after closing Nominal Accounts). Prepare a Balance Sheet on the basis of this trial balance.
Cash 10,000
Capital
100,000
Bank 77,000
Furniture
25,000
Ram
15,000
Rahim 50,000
47,000
Given below are the financial statements of Safal Enterprises, using the tool of ratio analysis comment on the profitability and liquidity position of the firm for the year 2006-07. Total no. of shares outstanding for the firm is 2.69crores. In the view of growth opportunities in the near future the firm has been maintaining a policy of 45% payout.
Particulars
2006 2007
( Rs. In crores)
Operating expenses
21.18 25.26
(Rs in crores)
Assets
Current assets
60.07
Total
51.96 60.07
Problem 5: Given below are the balance sheets of the two firms- Gloria Ltd and Victoria Ltd as on 31st March 2007.
Assets
728.323 889.895
Total 728.323 889.895 Can the financial positions of the two firms be compared assuming that the two firms fall in the same industry?
Assignment - B Problem 1:
Find out the cost of raw material purchased from the data given below:
Particulars Rs.
The product of a manufacturing concern passes through two processes A and B and then to finished stock. It is ascertained that in process A normally 5% of the total input is scrap which realizes Rs. 80 per tone. From the following information relating to process A for the month of August 2007, prepare process A account
Problem 3: Ahmedabad Company Ltd. manufactures and sells four types of products under the brand name Ambience, Luxury, Comfort and Lavish. The sales mix in value comprises the following:
Ambience 33 1/3
Luxury
412/3
Comfort 16 2/3
Lavish 8 1/3
_____
100
The total budgeted sales (100%) are $ 600,000 per month. The operating costs are: Ambience Luxury 60% of selling price Luxury 68% of selling price Comfort
Comfort
Lavish
The fixed costs are $. 159,000 per month. A) Calculate the breakeven point for the products on an overall basis. b) It has been proposed to change the sales mix as follows, with the sales per month remaining at $. 6,00,000:
Ambience 25
Luxury 40
Comfort 30
Lavish 05
--------
100 Assuming that this proposal is implemented, calculate the new breakeven point.
Bajaj Auto Limited is the flagship company of the Bajaj Group. The company manufactures two & three wheelers. Mr. Rahul Bajaj is the present Chairman of the company. The company was incorporated in the year 1945 as M/s Bachraj Trading Corporation Private Ltd. The promoters hold about 30% equity, whereas Indian public holds about 26% and institutional investors have more than 27% stake in the company. The products manufactured by Bajaj Auto are scooters, motor cycles, auto spares parts, machine tools, steel and engineering products. The company also produces three-wheelers as goods carriers such as pick-up or delivery vans and passenger carriers such as auto-rickshaws. Bajaj Auto has a network of 498 dealers, 1,500 authorized service centres and 162 exclusive three-wheeler dealers spread across the country. Bajaj Auto has also diversified into the general as well as life insurance business through its subsidiaries Bajaj Allianz General Insurance Company Ltd, respectively. The Bajaj brand has presence in many countries such as Sri Lanka, Mexico, Bangladesh, Columbia, Peru, Egypt, etc. The main competitors of the company in the two-wheelers and three-wheelers segment are- Hero Honda Motors Ltd, Kinetic Motor Co Ltd, LML ltd, Maharashtra Scooters Ltd, and TVS Motor Co. Ltd. The company sold close to 23 lakh vehicles in 2005-06, which is a record performance in its history. The sales of motorcycles manufactured grew by 32% in 2005-06 compared to a market growth of below 19%. For the fifth successive year, the company raised its market share in the motorcycle segment. Today it stands at almost 31%. Sales increased by almost 31% to an all-time high of Rs 9,285 crore in 2005-06. the export of the company in all its product categories has also been unprecedented during the FY 2005-06 as is reflected in the figures given below: Table A Product-wise exports of Bajaj Auto Ltd
27 Even more impressive has been the growth in company's operating EBITDA, which increased by 47% to touch Rs 1805 crore during 2005-06. Consequently the operating EBITDA margin grew by 220 basis points to 17.9% of the sales and operating income. Earnings per share have been risen from Rs 75.60 to Rs 111.00 in the current year. Dividend too has grown to Rs 40 per share (400%) for the year ended 31st March 2006 as against Rs 25 per share in 2005. Over the past few years, Bajaj Auto has focused on his technology development, and product development in anticipation of market needs, scaling up its manufacturing facilities, implementing best-in-class production systems, rationalizing vendors, slashing costs while upgrading quality, restructuring dealerships, and distribution channels. These capabilities enabled the company to create exciting new products, which have set benchmarks in styling, design, and technology. The company's products are creating a customer pull at all price points and the company has now transformed from being a price warrior to a price leader. The results of these strategies are reflected in its financial statements as follows (refer Table B and C): Table B Profit and Loss Account for Bajaj Auto Ltd for the year ended
(Rs in crore)
Sales
5317.07 6239.35
7582.90 9937.46
1109.66 1613.97
Rs in crore Rs in crore
Bonus Equity capital 114.17 114.17 Less: cumulative depreciation 1660.32 1834.19
Deferred tax liabilities 139.90 87.58 Advances/loans to corporate bodies 62.29 33.66
Current liabilities & provisions 4284.64 7773.20 Group/associate companies 34.44 19.41
Other current liabilities 1169.04 3674.37 Advance payment of tax 1823.60 1869.40
Notwithstanding its excellent financial performance in the years following its major strategic shift, the management of the firm believes in the philosophy that the quest for perfection is eternal. To preclude the complacency from setting in, the management not only sets higher standards it also continuously monitors its performance and benchmarks with the industry performance in general and their closest competitors' results in particular.
Discuss
1. Is the profitability performance of the firm satisfactory? If not, how can it be improved?
2. How attractive is the firm from the short-term and long-term lenders, perspective? Does the firm appear to be the favorite destination in the automobile sector (two-wheelers and three-wheelers segment) for the lenders?
3. How efficient is the firm been in utilizing the resources at its disposal? How do you think the company can improve upon its efficiency?
1.
2.
3. Accounting records only those transactions and events which are financial character.
4.
5.
6. The system of recording transaction on the basis of their two old aspects is called double entry system.
7.
8.
9. shorter.
10. Account.
11.
12. If the business has any liability, the proprietor's capital must be more than the total assets.
13.
14.
15.
16.
17.
18.
19. Salaries & Wages appearing in the trial balance are shown on the liabilities side of the balance sheet.
20.
21. Share having preferential right as to dividend and repayment of capital are termed as equity share capital.
22.
Shares which are not preference shares are called equity shares.
23.
The amount of share premium received by the company is shown under the
24.
25. There are no legal restrictions, similar to shares, for issue of debentures at discount.
26.
27. units.
Direct cost is that cost which can not be easily allocated to cost
28.
29.
30.
31.
32.
33.
34.
Good units bear the abnormal loss arising in the process costing.
35. loss.
36.
37.
38.
39.
40.
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