This leads to much confusion when referring to credits and debits. Assume there are 300 working days in a year. Contribution margin Sales less variable costs Contribution margin represents the amount that will be used to cover fixed costs. During the period rent expires Rs. Loan taken from Habib Bank Ltd. Problem 1: The following is the Balance Sheet of a company as on 31st March: Problem 2: From the following particulars found in the Trading, Profit and Loss Account of A Company Ltd.
Investment Structure: Debt-Equity Ratio is 0. Find out the amount of provision to be made to offset the inter-process profits added. It is proposed to depreciate the lease by annuity method charging 12 per cent interest. If you see a light bulb icon on a worksheet, just mouse over above the icon and a comment box will appear. The Balance Sheet, Debits and Credits, and Double-Entry Accounting: Practice Problems The Balance Sheet: A company will use a Balance Sheet to summarize its financial position at a given point in time.
I am not a financial or investment advisor, and the information on this site is for informational and entertainment purposes only and does not constitute financial advice. The balance sheet is derived using the accounting equation. Other charges are charged as a proportion of direct wages. The income statement is also referred to as a profit and loss statement. The future value of a cash flow adjusts the cash flow to its future value, given an interest rate.
On 1st October, 2011 a modification was made to improve its technical efficiency at a cost of Rs 50,000 which it was considered would also extend the useful life of the machine by two years. This is a very important rule to remember. Received cash form Ali Raza of Rs. Truck was Purchase by business for Rs. Solution : Problem 4 : The following are the details supplied by J. The cost of material of the product is Rs.
A low inventory turnover ratio is dangerous. To calculate the present value, you multiply the factor times the cash flow amount. Rent paid in advance for a year Rs. After reading this article you will learn about cost accounting problems on: 1. On October 1, 2010 the first machine was sold for Rs 1,20,000. Cost Accounting Problems on Idle Capacity Cost 1 Problem : Illustration 4 : A manufacturing company has two production departments X and Y and three service departments: Store, Maintenance and Time Keeping. Show journal entries and give the important ledger accounts to record the above.
What are the total liabilities at the end of the first year? The value of the work certified should not be considered in the effect of escalator clause. Alternative problems, with solutions, may be found at our partner website. She plans to use the units of production method of depreciation. Solution : Working: i Calculation for Material Cost per unit in 2007 ii Calculation for cost per variable selling overhead in 2007 Selling overhead increased by 25% i. The joint products are manufactured in one common process; after which they are separated and may undergo further individual processing.
The ratios for the firm are: Problem 11: With the following ratios and further information given below, prepare a Trading, Profit and Loss Account and Balance Sheet: Problem 12: Extract from financial accounts of X, Y, Z Ltd. However, the Liquid Ratio is 0. The pdf version of the solutions manual also includes links to the video solutions. Sent check to The Dawn in payment of the liability incurred on August 20. Following are the most frequently used formulas to analyze financial statements. The following data were available: Pre-separation point costs amounted to Rs.
It is decided to provide for the replacement of the lease at the end of four years by setting up a Depreciation Fund. Cash 3,000 Answer to Question 6: Dr. Services rendered by the Service Department are to be apportioned to the production departments X 50%, Y 25%, and Z 25%. Violation of this policy constitutes a copyright violation. I highly recommend this to any one looking for a crash course in accounting. New Delhi: Tata McGraw Hill. Bought goods on credit from Salman of worth Rs.
On 1st December, 2011 the company acquired and put into operation a new machine at a total cost of Rs 7,60,000. Weighted Average Inventory The weighted average method of determining inventory value uses the average cost of all products sold during a given accounting period. Cost Accounting Problems on Inter-Process Profit 1 Problem : Problem 1 : The following illustration will be helpful to understand how to calculate the inter-process profit. Fixed assets are not used properly. Depreciation of an Asset: Problem and Solution 5. Answer: A simple balanced equation for the gift basket business may look like this:??? Inaccurate inventory information causes the greatest difficulties because it gives accountants flawed financial information to create costs and values. The cost of holding a doll is Rs.