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Financial Statements 1 Test 43

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Financial Statements 1 Test 43
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  • Question 1
    1 / -0
    Ascertain purchases from the following figures:
    Cost of goods sold$$Rs. 80,700$$
    Opening stock$$Rs. 5,800$$
    Closing stock$$Rs. 6,000$$
    Solution
    This can be represented as :
    Cost of Goods Sold = Opening Stock + Purchases - Closing Stock
    80,700 = 5,800 + Purchases - 6,000
    80,700 = 5,800 - 6,000 + Purchases
    80,700 = Purchases - 200
    Purchases = 80,700 + 200
    Purchases = 80,900
  • Question 2
    1 / -0
    In the balance sheet contingent liability should be ________.
  • Question 3
    1 / -0
    Use the following information for questions given ahead:
    B Ltd. was registered with a share capital of $$Rs. 2,00,00,000$$ divided into equity shares of $$Rs. 10$$ each. It issued $$Rs. 1,80,00,000$$ equity shares to the general public at par payable as to $$Rs. 3$$ on application, $$Rs. 3$$ on allotment and balance in $$2$$ equal calls. The public had subscribed for $$17,00,000$$ shares. Till $$31st$$ March, $$2006$$, only first call had been made. All the shareholders had paid up except Mr. C, a holder of $$50,000$$ shares, who did not pay the call money.
    B Ltd.'s Issued Capital will be ____________.
    Solution
    Issued capital can be taken as the part of the authorized capital, which is actually offered to the public for subscription. The number of issued stock is a sub-group of the total authorized or registered shares. Issued capital is the quantity of stock which the BOD (Board of Directors) or stockholders have decided to assign. Generally, a company does not issue the entire authorized shares at a time so that the issued capital is always less than the authorized capital. 
    Issued capital does not get affect by subscribed or paid up capital and hence, in the given question B Ltd.'s Issued capital is Rs. 1,80,00,000.
  • Question 4
    1 / -0
    Arrangement of balance sheet in a proper way is known as __________.
    Solution
    Assets and Liabilities are to be shown in the balance sheet either in permanency order or liquidity order. This is called marshaling of balance sheet. 

    Order of permanency is that where the assets and liabilities are shown as per their permanency in the business. For example, in assets side, fixed assets are shown first staring from Land & Building, Plant & Machinery , Furniture and Fixtures and than current assets. 

    Liquidity Order- In this order, assets are liabilities are shown as per their liquidity. In such case, cash and bank is the starting point of assets side, It is just reversed of the permanency order. 
  • Question 5
    1 / -0
    If sales are Rs. $$2,000$$ and the rate of gross profit on cost of goods sold is $$25\%$$, then the cost of goods sold will be ______________.
    Solution
    This can be represented as :
    Let us assume the Cost Price is Rs.100 
    Profit Margin on Cost is @25% i.e. Rs.25
    There fore the selling Price will be = Cost +Profit =SP
                                                              =Rs.100+Rs.25=Rs.125
    If the Sales are Rs.2000
    the cost of goods sold will be Rs.2000/125*100
                  Cost of good sole =Rs.1600.
  • Question 6
    1 / -0
    Contingent assets usually arise from unexpected events which give rise to ____________________.
  • Question 7
    1 / -0
    Read the following which is taken from an income statement.
    Rs.
    Opening stock$$50,000$$
    Sales$$1,60,000$$
    Freight incurred$$10,000$$
    Sales retunrs$$10,000$$
    Gross profit on sales$$60,000$$
    Net loss for the year$$10,000$$
    Purchases$$1,00,000$$
    Purchases returns$$9,000$$
    The amount of operating expenses will be ___________________.
    Solution
    Solution for the given situation:

     Particulars AmountParticulars  Amount
     To Opening Stock 50000By Sales  160000
     To Purchases     100000  Less: Sales Returns   10000
     Less: P/return       9000  By Net Sales 150000
     To Net Purchases 91000 By Closing Stock
    (balancing figure)    		 61000
     To Freight incurred  10000  
     To Gross Profit 60000  
     Total 211000 Total  211000
     To Operating Expenses
    (balancing figure)    		 70000 By Gross Profit 60000
       By Net Loss 10000
     Total  70000Total   70000

  • Question 8
    1 / -0
    Find the cost of goods purchased from the following details:
    Opening stock  Rs.8,000 
    Direct expenses Rs. 5,000
    Sales        Rs. 45,000      
    Indirect Expenses  Rs. 3,500 
    Closing stock  Rs. 2,000   
    Gross profit   Rs. 5,000.
    Solution
    This can be represented as:
                                                  Trading Account
    Particuars                             Amount                      Particulars                Amount
    To Opening Stock                8000                      By Sales                     45000
    To  Purchases (balancing)   29000                    By Closing Stock         2000
    To Direct Expenses              5000
    To Gross Profit                      5000
                                                ----------------                                                   -------------
                                                  47000                                                         47000
                                                -----------------                                                 --------------
  • Question 9
    1 / -0
    ParticularsJune $$2015$$July $$2015$$August $$2015$$
    Opening stock$$4,08,000$$$$4,34,400$$$$4,60,800$$
    Credit Sales$$15,00,000$$$$16,00,000$$$$17,00,000$$
    Cash Sales$$2,00,000$$$$2,10,000$$$$2,20,000$$
    Gross Margin is 20% on sales. Stock purchased in June, $$2015$$ is?
    Solution
    Gross Margin is 20% on sales 
    Cost of Goods Sold = Sales - Gross Margin
                                     = Rs.1700000-20% of Rs.1700000
                                    = Rs.1700000- Rs.340000
                                   = Rs.1360000
    Another way of representing the cost of goods sold is,

    COGS= Op Stock+Purchases-Closing Stock
    Rs.1360000= Rs.408000 + Purchases - Rs.434400 (Op stock in July 2015)
    Rs.1360000=Rs.408000-Rs.434400+Purchases
    Rs.1360000= -Rs.26400+Purchases
    Purchases=Rs.1360000+Rs.26400
    Purchases = Rs.1386400.
  • Question 10
    1 / -0
    From the following details estimate the capital as on 1-1-2015.
    Capital as on 31-12-2015  $$Rs. 2,40,000$$,
    Drawing during the year $$Rs. 20,000$$,
    Profit during the year $$Rs. 25,000$$.
    Solution
    This can be represented as follows:

    Opening Capital+Profit during the year-Drawings=Closing Capital 
    Putting the available information in the equation:

    Op Capital+25000-20000=Rs. 240000
    Op Capital=Rs.5000=Rs.240000
    Opening Capital = Rs.240000-Rs.5000

    Opening Capital =Rs.235000.
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