MGT101 Assignment 1 Solution and Discussion

SEMESTER FALL 2019
FINANCIAL ACCOUNTING (MGT101)
ASSIGNMENT # 01
DUE DATE: 13th November 2019 MARKS: 10
TOPIC TO BE TESTED:
Basic understanding required for the preparation of financial statements.
LEARNING OBJECTIVES:
To understand the heads/terminologies used in the preparation of financial statements.
QUESTION
Following information is extracted from the

Particulars Rs. Particulars Rs.
Advertising expenses 65,000 Amount earned on sale of goods 121,000
Carriage/Transportation paid on sale of goods 160,000 Amount earned by rendering services 840,000
Purchases 550,000 Total Liabilities 10,30,000
Carriage/Transportation paid on purchases 50,000 Copy rights 250,000
Rent of office building 278,222 Goodwill 150,000
Taxes paid 20,364 Furniture and Fixtures 170,000
Mark up on loan 15,228 Plant & Machinery 750,000
Salaries paid to employees 16,369 Land and Building 777,000
Bank charges 29,367 Cash in hand 150,000
Other financial charges 17,268 Total Assets 2,240,000

Note: There is no opening and closing stock of inventory

Required:
Based on the above information of ABC Business, you are required to calculate the amount of:

  1. Intangible Assets
  2. Equity
  3. Total Income/Revenue
  4. Selling Expenses
  5. Cost of goods sold

IMPORTANT:
Grace period of extra 24 hours 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.
IMPORTANT INSTRUCTIONS
 Take help from internet for collecting the information.
 Carefully watch relevant lectures and consult the relevant material
from handouts along with recommended books.
 Attempt the assignment by yourself and it will be entertained positively.
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accepted.
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 It is advised to compose your document in MS-Word format.
 You may also compose your assignment in Open Office format.
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RULES FOR MARKING
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 It is submitted after the due date.
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Solution:
1. Intangible Assets

Particulars Rs. Rs.
Goodwill 150,000
Copy rights 250,000 400,000

2. Equity

Particulars Rs. Rs.
Total Assets 2,240,000
Less: Total Liabilities 1,030,000 1,210,000

3. Total Income/Total Revenue

Particulars Rs. Rs.
Amount earned on sale of goods 121,000
Amount earned by rendering services 840,000 961,000

4. Selling Expenses

Particulars Rs. Rs.
Advertising expenses 65,000
Carriage/Transportation paid on sale of goods 160,000 225,000

5. Cost of Goods Sold

Particulars Rs. Rs.
Purchases 550,000
Carriage/Transportation paid on purchase 50,000 600,000

Solution:
1. Intangible Assets

Particulars Rs. Rs.
Goodwill 150,000
Copy rights 250,000 400,000

2. Equity

Particulars Rs. Rs.
Total Assets 2,240,000
Less: Total Liabilities 1,030,000 1,210,000

3. Total Income/Total Revenue

Particulars Rs. Rs.
Amount earned on sale of goods 121,000
Amount earned by rendering services 840,000 961,000

4. Selling Expenses

Particulars Rs. Rs.
Advertising expenses 65,000
Carriage/Transportation paid on sale of goods 160,000 225,000

5. Cost of Goods Sold

Particulars Rs. Rs.
Purchases 550,000
Carriage/Transportation paid on purchase 50,000 600,000