(A) Discuss analyzes the techniques used by it to minimize the credit risk.
(B) Grain products use straight line deprecation on all its depreciable assets. The accounts are adjusted and close at the end of each calendar year. On Jan 4, 1999, the corporation purchase machine for cash at a cost of Rs. 40000. its useful life was estimated to be 10 years is recorded to the nearest full month.
In 2000, after almost 2 years with the equipment, management decided that the estimated life of the equipment should be revised from 10 years to 7 years. No change was made in the estimate of residual value. The revised estimate of useful life was decided on prior to recording depreciation for the period ended 31, Dec 2001.
a) Prepare journal entries for the above events. Show separately the deprecation for 1999, 2000, and 2001.
b) What factors may have caused the company to revise its estimate of the equipment’s useful life.
c) Describe the deprecation method for various assets.
A) on April 1, 2001, Pat Hamilton, an attorney, opened her legal open practice, to be known as the law office of Pat Hamilton. The business adjusts its account at the end of each month. The following trial balance was prepared at april 30, 2001, after one month of operations:
LAW OFFICE OF PAT HAMILTON
Trail balance (april 30, 2001)
Cash 10060 (DR)
Unexpired insurance 3000 (DR)
Office supplies 4000 (DR)
Office equipment 26400 (DR)
Notes payable 16000 (CR)
Unearned retainer frees 16020 (CR)
Pat Hamilton capital 20000 (CR)
Pat Hamilton drawings 40000 (DR)
Legal fee earned 1580 (CR)
Salaries exp 2680 (DR)
Miscellaneous exp 1200 (DR)
Both side total 53600
a) no interest has been yet paid on the note payable. Accrued interest at april 30 amount to Rs 180.
b) Salaries earned by the office staff but not yet recorded amounted to Rs 3470 at april 30.
c) A professional liability insurance policy was purchased on april 1. the premium of Rs 3000 for the first six months was paid and recorded as un expired insurance.
d) The business rents an office at a monthly rate of Rs 1600. on april 1, three rent was paid in advance and charged to the prepaid office rent account.
e) Office supplies on hand at april 30, amounted to Rs 1100
f) Office equipment was purchased on april 1, and is being depreciated over an estimated life of ten years.
1) prepare the adjusting entries required at april 30
2) prepare worksheet for the month ended april 30 2001.
B) during the current year, airport auto rental purchased 60 new automobiles at a cost of Rs 13000 per car . The car will by sold to wholesalers at estimated Rs 4000 each as soon as they gave been driven 50000 miles. Airport auto rental computers deprecation expense on its automobiles by the units of out put method, based upon milwage
a) compute the amount of deprecation to be recognized for each mile that a rental automobile is driven.
b) Assume that the 60 rental cars are driven a total 1650000 miles during the current year, compute the total amount of deprecation exp that airport auto rentals should recognize on this fleet of the cars for the year.
A) WBar Harbor Gas electric obtain authorization to issue 90 million face value of 10 % 20 years bonds. Dated may 1 2001/ interest payment dates were November 1, and may I issuance of the bonds did not take dates were November 1, and may 1. issuance of the bonds did not take place until august 1 2001. on this date all the bonds were sold at a price of 100 plus three months accrued interest.
Prepare the necessary entries in general form on:
a) august 1, 2001 to record the issuance of bonds.
b) November 1 2001 to record the first semi annual interest payment on the bond issue
c) December 1 2001 to accrue bond interest exp through the year end
d) May 1 2001 to record the sec semi annual interest payment
B) On 31 march B corporation received authorization to issue Rs 30 million of 12 % 30 years bonds, interest payment rates were 31 march and 30 September. The bonds were all issued at per on 30 april, one month after the interest date printed on the bonds.
a) prepare the journal entry at 30 april to record the sale of bonds
b) prepare the journal entry at 30 September, to record bond interest accrued since 30 september.
c) Discuss the issues related to bond financing.
A) Explain the application of international accounting standard in a specific public limited company.
B) Ahmed health center purchase special X ray machine for the operating room. The machine which cost Rs 147360 was expected to last tern years with an estimate residual value of Rs 1136. After two years of operation it become evident that the X ray machine would last a total of seven years. At that time estimated residual value would remain the same.
Calculate the deprecation under cash of the following independent assumptions before and after the decision.
• Straight line deprecation method used.
• Double declining balance method used
• Sum of year digit method used
A) M/S Humza Brother uses a perpetual inventory system. This system includes a perpetual inventory record for each of the 60 types of the product the company keeps in stock. The following transactions show the purchase and sales of a particular desk chair during September:
Sep 1 balance on hand 50 units cost Rs 60 each
Sep 4 purchase 20 units cost Rs 65 each
Sep 8 sale 35 units
Sep 9 purchase 40 units cost 65 each
Sep 20 sales 60 units
Sep 25 purchase 40 units cost Rs 70 each
Sep 30 sales 5 units
• Average method
B) profit and loss account (extract) for the year ended 30 june 2005 2001
Profit before tax 1976
Profit after tax 1448
Transfer to asset replacement reserve 200
Transfer to general reserve 400
Dividends paid and proposed 720 1320
Retained profit for the year 128
Retained profit brought forward 576
Retained profit carried forward 704
Notes: during the year following transaction took place:
• Fixed assets costing Rs 860000 were disposed duing the year. The accumulated deprecation on these assets was Rs 680000
• Bonus shares were issued on the bases of one for every three shares already held, i.e. 80000 shares, by using part of the share primum account
• The company made a rights issued on the basis of one shares for each four held. The new shares were offered at a premium of Rs 1 each.
• There had been no additions to free hold property during the year
• The debentures were redeemed in January 2001
A) cash flow statement for the year ended 30 june 2005
C) how appropriate inventory system is applied here
D) compare 3 years cash flow statement of any organization and highlight the variation in its closing cash balance. Discuses the reason for variation as well.
A) A and B were in partnership sharing profit and losses in the proportion three fourth and one fourth respectively. Their balance sheet stood as follows on 30 june 2005
Cash at bank 22500
Bills receivable 3000
Book debts 16000
They admitted C into partnership on 30 june 2005 on the following terms:
a) that C pays Rs 10000 as his capital for a fifth share in the future profit
b) that goodwill account for Rs 20000 is raised in the books of the news firm.
c) That stock and furniture are reduce by 10 % and than a 5 % provision in made for likely bad debts. d) That the value of the building is increased by 20 % and
e) That the capital account of A and B and readjusted on the basis of their sharing ratios.
Required: pass the necessary journal entries and give the ledger account and opening balance sheet of the new firm.
B) compare 3 years cash flow statement of any organization and highlight the variation in its shareholders equity section. Discuss the reason for variation as well.
A) on 30 june 200 the cash books showed the balance of Rs 2780 at bank the company had sent cheques amount to Rs 90000 to the bank before 30 june but it appears from the pass book that cheque worth only Rs 84000 had been credited before that date, similarly, out of cheque for Rs 85000 issued during the month of june cheques for Rs 2500 were not presented. The pass book also showed the following payment.
1. Rs 3320 premium according to standing instruction
2. Rs 5000 against a promissory note
The passbook showed that the bank has collected Rs 6000 as interest ongovernment securities. The bank has charged interest Rs 50 and bank chargesRs 20. there were no entry in cash book for the payment of interest and bank charges it was found that the total to the credit bank column in the cash book was short by Rs 110
Prepare the bank reconciliation statement on 30 hune 2000
B) at November 30 one day cleaners has available the following data concerning its bank checking account:
1. at November 30 cash per the bank statement was Rs 37758 per the accounting records 42500
2. the cash receipts of 6244 on November 30 were deposited on December 1
3. included on the bank statement was a credit for 167 interest earned on this checking account during November
4. two cheque were outstanding at November 30 No 921 for Rs 964 and No 825 for Rs 1085
5. enclosed with the bank statement were two debt memorandum for the following items: service changes for November Rs 14 and a Rs 700 cheque of customer Tanya(Miller, Marked “NSF” Instructions)
Prepare the bank reconciliation at November 30
A) mountain Mabel’s is a small general store located just outside of Yellowstone national park. The store uses a periodic inventory system. Every January 1 Mabel and her husband close the store and take a complete physical inventory whilewatching the rose parade on television. Last year, the inventory amount to 5200 this year it told 3800. during the current year, the business record sales of 125000 and purchasing of 62000
1. compute the cost of good sold for current years.
2. explain why a small business such as this might use the periodic inventory system
3. explain some of the disadvantages of periodic system to a large business such as sears store.
B) detail report of accounting of payroll for any specific organization selected by you.
1. what are the major fields of accounting?
2. list down the user of accounting information.
3. discuss briefly the objective of studying the accounting
1. differentiate between dissolution of a partnership and dissolution of a firm.
2. what does realization mean when used in connection with liquidation of a partnership?
3. discuss its IPO related issues.
A) make distinction between a partnership and a company. Also highlight the accounting procedure for issuance of company’s share capital and its allotment.
1. what are the different types of companies which require registration under the company act?
2. what are the two principal sources of company capital?
3. distinguish between authorized capital issued capital called up capital and paid up capital.