0444 Assignment No 2 Solution 2022-Autumn AIOU-Q 1 Ans-Advance Accounting

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0444 Assignment No 2 Solution 2022-Autumn AIOU-Q 1 Ans-Advance Accounting  Question The Yasir Corporation was registered with a nominal Capital of Rs.  1,200,000 divided into equity shares of Rs. 10 each. On 31 March 2021 the following ledger balance were extracted from the company’s book:  Equity Share Capital up and Paid Up          920,000  10% Debentures         600,000  Plant and Machinery          720,000  Sales                         830,000  Stock (1-4-2020)                150,000         5% Govt. Securities         120,000  Fixtures                             14,400       Reserve for Doubtful Debts             7,000  Preliminary expenses            10,000  Sundry Creditors         100,000  Freight and Duty            26,200  Sundry Debtors         174,000  Goodwill            50,000  Buildings         600,000  Wages          169,600  Bad debts             4,220  Cash in hand            19,700  Commission paid           14,400  Cash at bank            76,600  Salaries           29,000  Director’s fees            11,480  Purchases         370,000  Bills Payable            76,000  Interim dividend paid           15,000  General Reserve            50,000  Rent             9,600  Profit & Loss A/c (Cr) 1-4-2020            29,000  General Expenses             9,800  Office Equipment              8,000  Debenture Interest           10,000  The following adjustments were to be made: i. The Stock on 31st March, 2021 was estimated at Rs. 200,000 ii. Final Dividend at 10% to be provided. iii. Depreciation on Plan and Machinery at 10% and on Fixtures at 5% iv. Preliminary expenses to be written off  v. Rs. 30,000 were to be transferred to General Reserve vi. The provision for bad debts to be maintained at 10% on sundry debtors Required:  You are required to prepare the  (i) Trading and Profit and Loss  Account and  (ii) Profit and Loss Appropriation Account for the year ended 31st March 2021 and the  (iii) Balance sheet as on that date.

Transcript

00:00bismillahirrahmanirrahim assalamu alaikum dear students and viewers welcome to my

00:04YouTube channel Dijital Learner Bahadur Debu with your address the question

00:07number one which is related to the side number two of subject ATOMOS

00:12supporting which has a subject code 0344 and it is related to the second

00:18assignment of ATOM semester 2022 of AIOU examination system so it's total

00:26marks are 20 let's start reading the question then we will move to the

00:30requirement of this question and finally we will see the solution of this

00:36question the YASAR cooperation was registered with the nominal capital

00:40rupees 1.2 million divided into equity shares of rupees 10 each on 31st March

00:472021 the following budget balances were extracted from the company's book equity

00:55share capital capital up and paid up rupees 920,000 plant and machine is

01:02720,000 stock opening stock as on 1st April 2022 150,000 fixtures 14,400

01:12preliminary expecting 10,000 right and duty 26,200 goodwill 50,000 which is

01:20169,600 and the cash in hand 19,700 cash at back 76,600 directors fees 11,480

01:32bills payable 76,000 76,000 and general reserve 50,000 on the other hand profit

01:44and loss account credit means not loss it is a profit and balance will be

01:50appearing on the credit side of the profit and loss account 29,000 opposite

01:55payment 8,000 and other information on the second column is 10%

02:01investment 600,000 not investment it is

02:09hello sales 830,000 500 government security it is investment 120,000

02:19reserves for debt 7,000 and 100,000 and the debtors 174,000

02:28building 600,000 bad debts 4,220 commission paid 14,400 and salaries 29,000

02:38purchase is 370,000 and in term dividend paid 15,000 ranked 9,600 and general

02:46expenses are 9,800 different just interest is equal to 10,000 the

02:52following adjustments were to be made and the stock on 31st March 2021 was

02:57estimated at P 200,000 closing stock for a dividend at 10% to be provided

03:04other than this dimension interest it is dividend dividend it means the profit

03:12the portion of the profit paying to this shareholders depositions on plant and

03:19machining at 10% and fixtures on 5% preliminary expenses to be written off

03:25totally written off it is a part of it's asset it is a capital expense

03:31it is 30,000 what to be transferred to general reserves the provision for bad

03:36debts to be maintained at 10% on secondary debtors first you are required

03:42to prepare the trading and profit and loss account and profit and loss of

03:45expression account for the year ended 31st March 2021 and the balance sheet as

03:50on that date so basically we have three requirements two is related to profit

03:57and loss count and the one is balance sheet so let's move to the solution the

04:02solution I have made in excel sheets so here is the solution so your self

04:10corporation trading and profit and loss count so particular the opening stock

04:15150,000 purchase is 370,000 wages 169,000 depreciation plant and machinery

04:23please collect this one spelling machinery because plant and machinery is

04:31directly involved in the production of the goods so I am taking this

04:35depreciation as a part of cost of goods sold so it will not be covered in the

04:41expenses so I will have written it in under the cost of goods sold portion are

04:47trading and profit and loss count fight and duty 26,000 and it is obtained how by

04:54multiplying 720,000 with 0.10 and fight and duty is equal to 26,200

05:02gross profit is the balancing figure of by subtracting from this amount look at

05:10this I am going to show this one how much amount is there 761,600 I am going

05:17to subtract it from sorry say 787,800 from this amount we will get this

05:28balance figure which is termed as gross profit which is equal to

05:32242,200 so like this gross profit on this side 242,200 interest income is

05:44receiving from investment made in government securities at 5% so 6,000 is

05:51here so now come to the indirect expenses I am going to be delete this

05:57one and director's fees 11,480 preliminary expenses we are going to

06:03totally write off means we are going to charge as expense to the profit and loss

06:07count indirect expenses commission paid 14,400 salaries for 29,000 and 9,600

06:15general expenses 9,800 debentures interest which is are already paid some

06:2210,000 and debenture interest at 10% 60,000 so depreciation fixed is equal to 720

06:33this is a depreciation and bad debts is equal to how we will get this bad debts

06:37so bad debts 4,220 plus new one at a rate of 10% which is equal to 17,400

06:46and minus 7,000 old one so profit balancing figure is 78,580 which will be

06:56transferred to the profit and loss preparation account one thing more I

07:00want to share with you here regarding the profit and loss preparation account

07:04is that it is totally related with the profit and distribution to the share

07:11equity so look at this is a last year profit balance carried on 29,000 as

07:16given in the information table so current year profit which has been come

07:21from the profit and trading profit and loss count so interim dividend which is

07:25a part of the tile balance extended table

07:32final dividend proposed it is obtained by paid up capital equity share capital

07:39paid up capital of 92,000.01 so please remember that I am going to take this

07:46point one of the share capital if paid up capital is more than which is termed

07:51as premium and premium capital share premium capital so we will not take into

07:57account that amount so we are going to on the face value nominal value of the

08:02share we are determined it then as the 30,000 has been transferred so I have

08:08written it here so the loss here in this case there is a loss 29,120

08:13which is a balancing figure of this account and this balancing figure will

08:19transfer to the balance sheet under the adding of equity and share capital and

08:25further subdivision reserves so come to the last requirement of this question

08:31balance sheet so asset is equal to current assets cash in hand and cash

08:36income cash advance and the debtor stock so 970 19,700 6,000 76,600 156 200

08:46thousand on the right-hand side the current liabilities and the creditors

08:55you see that the debtor is 150 because I have subtracted and the premium for

09:02doubtful debt which is equal to 17,400 from the entry debtor so that amount we

09:07are going to return here 156,600 so here interest liability against

09:15debentures so you can it is good to be right here so bills payable 76,000 per

09:34post dividend 92,000 which is also the part of this is profit and loss

09:44profession account here but here it is a become as a part of to distribute to

09:52this share capital order but here as a part of liability because we didn't pay

09:58this we just create a liability against this per post dividend so come to the

10:04total assets not non current asset affects as a built-in 600,000 plant and

10:09machinery 720,000 is a conventional way of writing negative values in the

10:17accounting system so 72,000 is depreciation which is subtracted from the cost of the

10:26plant and machinery and which might be the initial or book value of which

10:33equipment 8,000 and no depreciation is started here because no information

10:39given according the rate of office equipment pictures 14,000 14 14,400

10:44accumulated depreciation pictures 725 percent government securities 120,000

10:52and 6,000 is the income interest here 120,000 I think I have a machine here

11:01here which is achievable so goodwill also fixes a 50,000 and one thing we

11:13might have to name any expenses has been right up from here because of it has

11:18been written up and the charge as expressed in the income statement now

11:23come to the non current liabilities 600,000 10% differential if we get share

11:28capital or thrice capital 120 shares at rupees 10 which is equal to 1.2 million

11:35share issued and paid up capital 92,000 shares at rupees 10 means and now issued

11:43shares are at par value not at premium not at discount 920,000 reserve we have

11:49put as a reserve general reserves profit and loss count look at this from the

11:56information given in the table we already have is a 50,000 and we have

12:00transferred 30,000 from the profit so it will become 80,000 and often a loss

12:06count of the last third quarter last month is 29,420 so total is 90 and total

12:17970,580 which is equal to which is which is represent the equity and share

12:27capital total and we have a total liability and this one current liability

12:33current asset plus non current asset here here it is total liability which is

12:39including equity and share capital non current asset and current liability look at

12:47this both sides are equal so the solution is finished here so I hope you

12:54will find this solution useful and easy to understand but if you have any

12:58question you can ask me in the comment section or if you want to add something

13:03more from your side provide your suggestion in comment section as well

13:08but with logical arguments and last thing if you found any mistake regarding

13:13calculation please also correct it in the comment section for the benefit of

13:18all thanks for watching assalamu alaikum

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