Tuesday, 8 January 2013
SEMESTER FALL 2012
FINANCIAL ACCOUNTING II (MGT401)
ASSIGNMENT NO. 02
DUE DATE: 8TH JANUARY 2013 MARKS: 30
TOPIC TO BE TESTED
Presentation of Financial Statements
LEARNING OBJECTIVES:
To learn about the correct procedure to prepare the Statement of
Financial Position
To learn about the preparation of Notes to the Accounts
ASSIGNMENT QUESTION:
Following are the information extracted from the records of Local Industries Ltd. on 31st
December 2012.
PARTICULARS Rs.
(000)
Obligation under lease finance 120
Gratuity payable 120
Issued, subscribed and paid up capital
(50, 000 ordinary shares of Rs. 10 each - issued for cash) 500
General reserve 140
Share premium 250
Creditors, accruals and other liabilities 25
Dividend Payable 20
Current maturity of obligation under lease finance 35
Accumulated depreciation:
Building
Machinery & equipment
90
140
Opening stock:
Raw material
Work in process
Finished goods
30
20
110
Additional Information:
Authorized capital: 80,000 ordinary shares of Rs. 10 each
Bonus issue (declared on December 31, 2012) from share premium account 40%
Income tax to be provided Rs. 30,000
Deferred tax to be provided Rs. 90,000
At 31/12/2012, the land was revalued upwards by Independent Valuer at Rs. 15,000
There were no disposals of fixed assets during the year.
Closing stock at 31st December 2012:
Raw material Rs. 35,000; Work in process Rs. 55,000; & Finished goods Rs. 360,000
Cost of fixed assets at the beginning of the year (assuming all external additions at
the start of the year).
Land Rs. 100,000; Building Rs. 180,000; & Machinery and equipment Rs. 240,000
Depreciation:
Building - 10% on cost; & Machinery and equipment - 20% on cost
Required:
1. Prepare a statement of financial position (Report form/Statement form) of
Local Industries Ltd. as on 31st December 2012. 20 Marks
2. Show necessary notes to the accounts separately. 10 Marks
IMPORTANT:
24 hours extra / grace period after the due date is usually available to
overcome uploading difficulties. This extra time should only be used to meet
the emergencies and above mentioned due dates should always be treated as
final to avoid any inconvenience.
Raw material purchased during the year 750
Trade receivables 50
Cash balance 45
Short term investments 30
Land 100
Building 200
Machinery & equipment 300
Long term investment 450
OTHER IMPORTANT INSTRUCTIONS:
DEADLINE:
Make sure to upload the solution file before the due date on VULMS.
Any submission made via email after the due date will not be
accepted.
FORMATTING GUIDELINES:
Use the font style “Times New Roman” or “Arial” and font size “12”.
It is advised to compose your document in MS-Word format.
You may also compose your assignment in Open Office format.
Use black and blue font colors only.
REFERENCING GUIDELINES:
Use APA style for referencing and citation. For guidance search
“APA reference style” in Google and read various website containing
information for better understanding or visit
APA REFERENCE STYLE: Table of Contents
Solution
Fixed assets
Building= 180200-90= 180110*10/100=18011
Machinery & equipment= 240300-140=240160*20/100=48,032
FINANCIAL ACCOUNTING II (MGT401)
ASSIGNMENT NO. 02
DUE DATE: 8TH JANUARY 2013 MARKS: 30
TOPIC TO BE TESTED
Presentation of Financial Statements
LEARNING OBJECTIVES:
To learn about the correct procedure to prepare the Statement of
Financial Position
To learn about the preparation of Notes to the Accounts
ASSIGNMENT QUESTION:
Following are the information extracted from the records of Local Industries Ltd. on 31st
December 2012.
PARTICULARS Rs.
(000)
Obligation under lease finance 120
Gratuity payable 120
Issued, subscribed and paid up capital
(50, 000 ordinary shares of Rs. 10 each - issued for cash) 500
General reserve 140
Share premium 250
Creditors, accruals and other liabilities 25
Dividend Payable 20
Current maturity of obligation under lease finance 35
Accumulated depreciation:
Building
Machinery & equipment
90
140
Opening stock:
Raw material
Work in process
Finished goods
30
20
110
Additional Information:
Authorized capital: 80,000 ordinary shares of Rs. 10 each
Bonus issue (declared on December 31, 2012) from share premium account 40%
Income tax to be provided Rs. 30,000
Deferred tax to be provided Rs. 90,000
At 31/12/2012, the land was revalued upwards by Independent Valuer at Rs. 15,000
There were no disposals of fixed assets during the year.
Closing stock at 31st December 2012:
Raw material Rs. 35,000; Work in process Rs. 55,000; & Finished goods Rs. 360,000
Cost of fixed assets at the beginning of the year (assuming all external additions at
the start of the year).
Land Rs. 100,000; Building Rs. 180,000; & Machinery and equipment Rs. 240,000
Depreciation:
Building - 10% on cost; & Machinery and equipment - 20% on cost
Required:
1. Prepare a statement of financial position (Report form/Statement form) of
Local Industries Ltd. as on 31st December 2012. 20 Marks
2. Show necessary notes to the accounts separately. 10 Marks
IMPORTANT:
24 hours extra / grace period after the due date is usually available to
overcome uploading difficulties. This extra time should only be used to meet
the emergencies and above mentioned due dates should always be treated as
final to avoid any inconvenience.
Raw material purchased during the year 750
Trade receivables 50
Cash balance 45
Short term investments 30
Land 100
Building 200
Machinery & equipment 300
Long term investment 450
OTHER IMPORTANT INSTRUCTIONS:
DEADLINE:
Make sure to upload the solution file before the due date on VULMS.
Any submission made via email after the due date will not be
accepted.
FORMATTING GUIDELINES:
Use the font style “Times New Roman” or “Arial” and font size “12”.
It is advised to compose your document in MS-Word format.
You may also compose your assignment in Open Office format.
Use black and blue font colors only.
REFERENCING GUIDELINES:
Use APA style for referencing and citation. For guidance search
“APA reference style” in Google and read various website containing
information for better understanding or visit
APA REFERENCE STYLE: Table of Contents
Solution
Fixed assets
Building= 180200-90= 180110*10/100=18011
Machinery & equipment= 240300-140=240160*20/100=48,032
