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ACC501 Assignment no 01 fall 2013 solution required

 

SEMESTER FALL 2013

 

BUSINESS FINANCE (ACC501)

 

ASSIGNMENT NO. 01

 

(NON-GRADED)

 

DUE DATE: 26TH NOVEMBER, 2013

 

MARKS: 20

 

LEARNING OBJECTIVES:

 

After attempting this assignment whole-heartedly, the students will be able to:

 

  • Prepare cash flow statement and Common size statements.

 


QUESTION:

 

ABC Company is engaged in manufacturing of electronic appliances. Following are the income statement and comparative balance sheet of ABC Company for the years 2010 and 2011. You are required to prepare Cash Flow Statement for ABC Company for the year ended 31st December, 2011 and Common Size Income Statement.

 

 

 

Cash Flow Statement                                                                                    Marks:15

 

Common Size Income Statement                                                                 Marks:05

 

ABC Company Limited

 

Income Statement

 

For the year ended on 31st December, 2011

 

 

  Amount (Rs.) Amount (Rs.)
     
Sales Revenue

1,000,000

 
     
Less: Cost of goods sold

670,000

 
     
Gross Profits  

330,000

     
Less: Operating Expenses    
     
General and administrative Expenses

32,000

 
     
Depreciation Expenses

72,000

104,000

     
Earnings before interest and taxes (EBIT)  

226,000

     
Less: Interest Expenses  

22,000

     
Net Profits before taxes  

204,000

     
Less: Taxes @ 35%  

71,400

     
Net Income  

132,600

     
Earnings per share (EPS)  

3.79

     
Dividend per Share  

2.36

     

 

 

 

ABC Company Limited


Comparative Balance Sheet

 

As on 31st December 2010 and 2011

 

 

 

2010

2011

 

2010

2011

 
Assets     Liabilities & Equities      
 

Rs.

Rs.   Rs. Rs.  
             
Cash

10,000

15,000

Accounts Payable

50,000

40,000

 
             
Marketable

20,000

25,000

Notes Payable

40,000

35,000

 
Securities  
           
             
Accounts Receivable

65,000

60,000

Accruals

45,000

30,000

 
             
Inventories

45,000

58,000

       

 

Total Current

140,000

158,000

Total Current

135,000

105,000

 
Assets Liabilities  
         
             
Land and Buildings

300,000

450,000

Long-term Debt

94,000

220,000

 
             
Machinery and

230,000

280,000

Stockholders’ Equity      
Equipment      
           
             
Furniture and

120,000

120,000

Common stock Equity

350,000

350,000

 
Fixtures  
           
             
Others

50,000

50,000

Retained Earnings

100,000

150,000

 
             
Total Gross Fixed

700,000

900,000

Paid-in-capital in

105,000

105,000

 
Assets excess of par  
         
             
Less:            
 

56,000

128,000

Total Common

555,000

605,000

 
Accumulated stockholder’s Equity  
         
Depreciation            
             
Net Fixed Assets

644,000

772,000

       
             
Total Assets

784,000

930,000

Total Liabilities and

784,000

930,000

 
stockholders’ Equity  
           

 

Notes:

 

  1. Sales of old Machinery for Rs. 100,000 and purchased new for Rs. 150,000.

 

  1. Purchased new land and building costing Rs. 150,000 for storing inventories.

 

  1. Issued long-term 10% interest bearing bond of Rs. 126,000 and previously issued bonds also have the interest rate of 10%.

 

 

 

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.

 

IMPORTANT INSTRUCTIONS:

 

  • Complete calculations are required for every part of the problem. Incomplete calculations will result in loss of marks.

 

  • This assignment will be a non-graded assignment, which means that the marks of this assignment will not be included in your final marks.

 

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.

 

 

 

RULES FOR MARKING

 

Please note that your assignment will not be graded or graded as Zero (0), if:

 

  • It is submitted after the due date.

 

  • The file you uploaded does not open or is corrupt.

 

  • It is in any format other than MS-Word or Open Office; e.g. Excel, PowerPoint, PDF etc.

 

  • It is cheated or copied from other students, internet, books, journals etc.

 

 

 

 

Note related to load shedding: Please be proactive

 

Dear students!

 

As you know that Pre Mid-Term semester activities have started and load shedding problem is also prevailing in our country. Keeping in view the fact, you all are advised to post your activities as early as possible without waiting for the due date. For your convenience; activity schedule has already been uploaded on VULMS for the current semester, therefore no excuse will be entertained after due date of assignments, quizzes or GDBs.

 

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