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Owner has used a stock Rs. 10,000 and cash Rs. 3000 for his personnel usage.07. Investment income received is Rs. 1200008. PPE should be depreciated 12% per annum09. Paid bank loan installment is Rs. 25000 and included interest for above is Rs. 500010. Received Rs 27000 from debtors under a discount of 10%11. Set off a debtor worth of Rs. 53000 with a creditor of Rs.50,000Required01. Write the transaction could be occurred from the 01-0502. Show the impact of transactions 6 -11 with in the accounting equation and state whether eachvalue increase (+) decrease (-) and in front of the value. (use following format.)TransactionNoncurrentassetsStock Tradereceivables CashEquity TradePayablesOtherPayablesCapital RetainedEarnings1.2.........TransactionNoncurrentassetsStock Tradereceivables CashEquity TradepayablesOtherpayablesCapital Retainedprofit01/01Balance 500 80 60 360 725 - 155 12001 +200 -110 +9002 -36 +4 -4003 -100 +150 +5004 +30 -3005 +20 -30 -10303. Prepare the income statement for the year ending 31.01.201904. Prepare the statement of Financial position as at 31.01.2019

Question

Owner has used a stock Rs. 10,000 and cash Rs. 3000 for his personnel usage.07. Investment income received is Rs. 1200008. PPE should be depreciated 12% per annum09. Paid bank loan installment is Rs. 25000 and included interest for above is Rs. 500010. Received Rs 27000 from debtors under a discount of 10%11. Set off a debtor worth of Rs. 53000 with a creditor of Rs.50,000Required01. Write the transaction could be occurred from the 01-0502. Show the impact of transactions 6 -11 with in the accounting equation and state whether eachvalue increase (+) decrease (-) and in front of the value. (use following format.)TransactionNoncurrentassetsStock Tradereceivables CashEquity TradePayablesOtherPayablesCapital RetainedEarnings1.2.........TransactionNoncurrentassetsStock Tradereceivables CashEquity TradepayablesOtherpayablesCapital Retainedprofit01/01Balance 500 80 60 360 725 - 155 12001 +200 -110 +9002 -36 +4 -4003 -100 +150 +5004 +30 -3005 +20 -30 -10303. Prepare the income statement for the year ending 31.01.201904. Prepare the statement of Financial position as at 31.01.2019

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Solution

This seems like a complex accounting problem. Let's break it down step by step.

  1. Transactions that could have occurred from 01-05:

    • The owner withdrew stock worth Rs. 10,000 and cash Rs. 3,000 for personal use.
    • The business received an investment income of Rs. 120,000.
    • The business paid a bank loan installment of Rs. 25,000 which included an interest of Rs. 5,000.
    • The business received Rs. 27,000 from debtors under a discount of 10%.
    • The business set off a debtor worth of Rs. 53,000 with a creditor of Rs.50,000.

  2. Impact of transactions 6 -11 within the accounting equation:

    • Transaction 6: Noncurrent assets (-Rs. 10,000), Stock (-Rs. 10,000), Cash (-Rs. 3,000), Equity (-Rs. 13,000)
    • Transaction 7: Cash (+Rs. 120,000), Retained Earnings (+Rs. 120,000)
    • Transaction 8: Noncurrent assets (-Rs. 12,000), Retained Earnings (-Rs. 12,000)
    • Transaction 9: Cash (-Rs. 25,000), Other Payables (-Rs. 5,000), Equity (-Rs. 20,000)
    • Transaction 10: Trade Receivables (-Rs. 30,000), Cash (+Rs. 27,000), Retained Earnings (+Rs. 3,000)
    • Transaction 11: Trade Receivables (-Rs. 53,000), Trade Payables (-Rs. 50,000), Cash (-Rs. 3,000)

  3. Income Statement for the year ending 31.01.2019:

    • Revenue: Rs. 120,000 (Investment income)
    • Less: Expenses: Rs. 12,000 (Depreciation) + Rs. 5,000 (Interest) + Rs. 3,000 (Discount) = Rs. 20,000
    • Net Income: Rs. 100,000

  4. Statement of Financial Position as at 31.01.2019:

    • Noncurrent Assets: Rs. 500 - Rs. 10,000 - Rs. 12,000 = -Rs. 21,500
    • Stock: Rs. 80 - Rs. 10,000 = -Rs. 9,920
    • Trade Receivables: Rs. 60 - Rs. 30,000 - Rs. 53,000 = -Rs. 82,940
    • Cash: Rs. 360 - Rs. 3,000 + Rs. 120,000 - Rs. 25,000 + Rs. 27,000 - Rs. 3,000 = Rs. 116,360
    • Equity: Rs. 725 - Rs. 13,000 - Rs. 20,000 + Rs. 100,000 = Rs. 67,725
    • Trade Payables: Rs. 155 - Rs. 50,000 = -Rs. 49,845
    • Other Payables: Rs. 120 - Rs. 5,000 = -Rs. 4,880

Please note that negative values indicate a deficit.

This problem has been solved

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