Question 1)a) Transactions of the business for March 2010 are given below:
Year 2010 Particulars Amount(Rs.)
March 01 Commenced business 10, 000
March 03 Paid two months rent in advance for a shop 1, 000
March 05 Purchased supplies on credit 700
March 07 Purchased machineries 5, 000
You are required to:
• Prepare journal entries for the above transactions
• Post the entries from the journal to the following ledger accounts
I. Supplies account
II. Prepaid rent account
III. Cash account
IV. Machinery account
Question 2)a) A man arranges to repay Rs. 1,00,000 bank loan in 10 equal annual instalments at 12% per year compounded quarterly. Immediately after the 3rd payment, he borrows another Rs. 50,000 also at the same interest rate. When he borrows Rs. 50,000 he talks to the banker into letting him repay the remaining debt of the first loan and the entire amount of the second loan in 12 equal annual payments. The first of 12 payments would be made one year after he receives Rs. 50,000. Calculate the amount of each of 12 payments?
b) Using following information complete balance sheet given below:
Total debt to Net worth 0.5:1
Total assets turnover ratio 2:1
Gross profit 30%
Average collection period (based on 360 days a year) 40 days
Acid test ratio 0.75:1
Inventory turnover ratio (based on cost of goods sold and year end inventory) 3 times
Balance sheet
Liabilities Amount(Rs) Assets Amount(Rs)
Accounts payable ------------ Cash --------------
Share capital 2, 00, 000 Accounts receivables --------------
Retained earnings 3, 00, 000 Inventory ---------------
------------------- ------------- Plant and equipment --------------
Total ------------- Total -------------