F-2,Block, Amity Campus

Sec-125, Nodia (UP)

India 201303

ASSIGNMENTS
PROGRAM:
SEMESTER-I
Subject Name

: Accounts and Finance

Study COUNTRY
: Sudan
Permanent Enrollment Number (PEN) :
Roll Number
: IB01652010-2012045
Student Name
: SOMAIA TAMBAL ELMALIK
INSTRUCTIONS
a) Students are required to submit all three assignment sets.
ASSIGNMENT
Assignment A
Assignment B
Assignment C

DETAILS
Five Subjective Questions
Three Subjective Questions + Case Study
40 Objective Questions

b)
c)
d)
e)

MARKS
10
10
10

Total weightage given to these assignments is 30%. OR 30 Marks

All assignments are to be completed as typed in word/pdf.
All questions are required to be attempted.
All the three assignments are to be completed by due dates (specified
from time to time) and need to be submitted for evaluation by Amity
University.
f) The evaluated assignment marks will be made available within six
weeks. Thereafter, these will be destroyed at the end of each semester.
g) The students have to attched a scan signature in the form.

Signature
Date

:
:

15. Aug. 2011

( ) Tick mark in front of the assignments submitted

Assignment A

Assignment B

Assignment C

Accounts and Finance

Assignment A
This assignment consists of 5 analytical covering the syllabus till Analysis of Financial
Statements.

Problem 1:
Journalize the following transactions in the books of Mr. Walter:
a) Paid rent of building $ 12,000 half of the building is used by the proprietor for residential
use.
b) Paid fire insurance of the above building in advance $ 1,000.
c) Paid life insurance premium $ 2,000.
d) Paid income-tax $ 3,000.
e) Salary due to clerk $ 500.
f) Charge depreciation on furniture @ 10% p.a. for 1 month (furniture $ 12,000).
g) Provide interest on capital ($ 60,000) at 15% p.a. for 6 months.
h) Charge interest on drawing (10,000) at 18% p.a. for 6 months.
i) Provide interest on loan to Ram ($ 100,000) at 18% p.a. for 2 months.
j) Charge interest on loan to Shyam ($ 200,000) at 18% p.a. for 2 months.
k) Received commission $ 1,000 half of which is in advance.
l) Brokerage due to us $ 500.

Transaction
Number
A

Assets

Laities

-12,000

Share holder
equity
-12,000

-1,000

-1,000

-2,000

-2,000

-3,000

-3,000

-5,00

-5,000

-12,000

-12000

Explanation
Paid rent of
building
Paid fire
insurance
Paid life
insurance
Paid incometax
Salary due to
clerk
Charge
depreciation on
furniture @
10% p.a. for 1
month
(furniture $
12,000).

+60,000

+60,000
+4,500

+4,500
H

-900

-3000

+900

Provide interest
on capital ($
60,000) at 15%
p.a. for 6
months.

-900

Charge interest
on drawing
(10,000) at
18% p.a. for 6
months.

-3,000

Provide interest
on loan to Ram
($ 100,000) at
18% p.a. for 2
months

Journal in the books of Mr. walter

Particulars
Cash a/c
To rent expense a/c
[For the amount paid half of building.]
cash a/c
To prepaid insurance a/c
[For the amount paid for building in advance.]
-cash ac
2000
To life insurance
2000
Cash a/c
To tax expense a/c
[For the amount paid towards income tax.]

L/F
Dr

Dr

Debit Amount
(in Rs)

12000

1,000

3,000

Credit Amount
(in Rs)
12000

1,000

DrcrDr

3,000

Cash a/c
To Salary a/c

Dr

500

12000

[For the value of 10% charge interest per month.]

Interest a/c
Dr
To capital a/c

60000

[For the 15% annually provision.]

Interest a/c
To drawing a/c

10,000

[For the amount paid clerk.]

Office expensea/c
To depreciation a/c

Dr

Dr

[For the 18% annually charge inetrest .]

Interest a/c
Dr
To Ram a/c

500

12000

60000

10,000

100,000
100,000

[For the 18% annually loan .]

Interest payable a/c
To Shyam a/c

Dr

[For the amount change 18% annually loan )

Commission a/c
To walter a/c

Dr

[For the amount received in advance )

brokerage a/c
To Walter a/c

Dr

200,000

1,000

500

200,000

1,000

500

[For the amount due for brokarage)

Problem 2:
From following figures extracted from the books of Mr. XYZ, you are required to prepare a Trading
& Profit & Loss Account for the year ended 31st March, 2008 and a Balance Sheet as on that date
after making the necessary adjustments.
$
Mr. XYZs Capital

228,800

$
Stock 1.4.2007

38,500

Mr. XYZ Drawings

13,200

Wages

35,200

Plant & Machinery

99,000

Sundry creditors

44,000

Freehold property

66,000

Postage & Telegrams

1,540

110,000

Insurance

1,760

1,100

Gas & fuel

2,970

13,200

Bad debts

660

Office Expenses

2,750

Office rent

2,860

Discount A/c (Dr.)

5,500

Loose tools

2,900

Purchases
Rtuens outwards
Salaries

Sundry Debtors

29,260

Factory lighting

Loan to Mr. Krish @10% p.a.

44,000

Provision for doubtful debts

880

Interest on loan to Mr. Krish

1,100

Cash in hand

2,640

Balance on 1.4.2007
Cash at bank

29,260

Bills payable

5,500

1,100

sales

231,440

Adjustments:
a) Stock on 31st March, 2008 was valued at $ 72,600
b) A new machine was installed during the year costing $15,400 but it is not recorded in the
books as on payment was made for it. Wages $ 1,100 paid for its erection has been
debited to the wages account.
c) Depreciate :
a. Plant & machine by 33.33%
b. Furniture by 10%
c. Freehold property by 6%
d) Loose tools were valued at $ 1.760 as on 31.3.2008
e) Of the sundry debtors Rs.660 are bad and should be written off.
f) Maintain a provision of 5% on sundry debtors for doubtful debts.
g) The manager is entitled to a commission of 10% of the net profits after charging such
commission.

Problem 3:
Following is the Trial Balance of M/s. Trinity Foods as on 30 th June 2007 (after closing Nominal
Accounts). Prepare a Balance Sheet on the basis of this trial balance.
Particulars
Cash
Capital
Bank
Furniture
Ram
Rahim
Trading & Profit & Loss

Debit (Rs.)
10,000

Credit (in Rs.)

100,000

77,000
25,000
15,000
50,000
47,000
162,000

162,000

Problem 4:
Given below are the financial statements of Safal Enterprises, using the tool of ratio analysis
comment on the profitability and liquidity position of the firm for the year 2006-07. Total no. of
shares outstanding for the firm is 2.69crores. In the view of growth opportunities in the near future
the firm has been maintaining a policy of 45% payout.

Sales
Other income
Cost of sales
Gross margin

Summarized P & L of Safal Enterprises

For the year ended 31 March
Particulars
2006
2007
( Rs. In crores)
132.00
144.00
12.00
15.00
102.96
110.02
29.04
33.98

Operating expenses
Administration
Selling & distribution
Profit before interest & tax (PBIT)
Interest
Profit before tax (PBT)
Provision for taxes
Profit after tax (PAT)

12.44
4.42
24.18
3.00
21.18
7.94
13.24

14.36
5.36
29.26
4.01
25.26
9.47
15.79

Balance Sheet of Safal Enterprises

Particulars
Assets
Fixed assets
Current assets
Inventory
Accounts receivable
Cash
Less: Current liabilities
Net current assets
Total Assets
Liabilities &owners equity
Share capital
Reserves & Surplus
Debt(long term)
Total

31/03/06

31/03/07
(Rs in crores)
31.25

37.50

14.56
13.20
1.50
8.55
20.71
51.96

16.64
15.43
1.75
11.25
22.57
60.07

27.00
4.96
20.00
51.96

27.00
6.36
26.71
60.07

Problem 5:
Given below are the balance sheets of the two firms- Gloria Ltd and Victoria Ltd as on 31 st March
2007.
Gloria Ltd.
Victoria Ltd.
Assets
Cash and Bank balance
12.70
38.60
Marketable securities
10.00
21.00
Sundry debtors
22.00
23.70
Prepaid expenses
93.50
162.45
Current Assets
1.12
2.14
Fixed Assets (Net)
139.32
247.90
Total Assets
589.00
642.00
728.323
889.895
Liabilities and Owners Equity
Sundry creditors
6.75
26.45
Notes payable
6.56
6.45
Long term debt
130.01
345.00
Equity
585.00
512.00
Total

728.323

889.895

1. Can the financial positions of the two firms be compared assuming that the two firms fall
in the same industry?

Assignment B
This assignment is covering the remaining syllabus and a case study.

Problem 1:
Find out the cost of raw material purchased from the data given below:
Particulars
Prime cost
Closing stock of raw material
Direct labour cost
Expenses on purchases

Rs.
200,000
20,000
100,000
10,000

Problem 2:
The product of a manufacturing concern passes through two processes A and B and then to
finished stock. It is ascertained that in process A normally 5% of the total input is scrap which
realizes Rs. 80 per tonne.
From the following information relating to process A for the month of August 2007, prepare
process A account
Materials
500 tonnes
Cost of materials
Rs. 125 per tonne
Wages
Rs. 14,000
Manufacturing overheads
Rs. 4,000
Output
415 tonnes

Problem 3:
Ahmedabad Company Ltd. manufactures and sells four types of products under the brand name
Ambience, Luxury, Comfort and Lavish. The sales mix in value comprises the following:
Brand name
Ambience
Luxury

Percentage
33 1/3
41 2/3

Comfort
Lavish

16 2/3
8 1/3
-----100

The total budgeted sales (100%) are $ 600,000 per month.

The operating costs are:
Ambience 60% of selling price Luxury
Luxury
68% of selling price Comfort
Comfort
80% of selling price Lavish
Lavish
40% of selling price
The fixed costs are $. 159,000 per month.

a) Calculate the breakeven point for the products on an overall basis.

b) It has been proposed to change the sales mix as follows, with the sales
per month remaining at $. 6,00,000:
Brand Name
Ambience
Luxury
Comfort
Lavish

Percentage
25
40
30
05
--100

Assuming that this proposal is implemented, calculate the new breakeven point.

Case study:
Bajaj Auto Limited: The Unprecedented Growth Story
Bajaj Auto Limited is the flagship company of the Bajaj Group. The company manufactures two &
three wheelers. Mr. Rahul Bajaj is the present Chairman of the company. The company was
incorporated in the year 1945 as M/s Bachraj Trading Corporation Private Ltd. The promoters
hold about 30% equity, whereas Indian public holds about 26% and institutional investors have
more than 27% stake in the company.
The products manufactured by Bajaj Auto are scooters, motor cycles, auto spares parts, machine
tools, steel and engineering products. The company also produces three- wheelers as goods
carriers such as pick-up or delivery vans and passenger carriers such as auto-rickshaws. Bajaj
Auto has a network of 498 dealers, 1,500 authorized service centres and 162 exclusive threewheeler dealers spread across the country.
Bajaj Auto has also diversified into the general as well as life insurance business through its
subsidiaries Bajaj Allianz General Insurance Company Ltd, respectively. The Bajaj brand has
presence in many countries such as Sri Lanka, Mexico, Bangladesh, Columbia, Peru, Egypt, etc.
The main competitors of the company in the two-wheelers and three-wheelers segment are- Hero
Honda Motors Ltd, Kinetic Motor Co Ltd, LML ltd, Maharashtra Scooters Ltd, and TVS Motor Co.
Ltd.
The company sold close to 23 lakh vehicles in 2005-06, which is a record performance in its
history. The sales of motorcycles manufactured grew by 32% in 2005-06 compared to a market
growth of below 19%. For the fifth successive year, the company raised its market share in the
motorcycle segment. Today it stands at almost 31%. Sales increased by almost 31% to an all-

time high of Rs 9,285 crore in 2005-06. the export of the company in all its product categories has
also been unprecedented during the FY 2005-06 as is reflected in the figures given below:
Table A Product-wise exports of Bajaj Auto Ltd
Product

2005-06

2004-05
Growth
( in numbers )
(in percentage)
Motorcycles
165,288
123,946
33
Total two-wheelers
174,907
130,945
34
Three-wheelers
75,297
65,765
14
Total vehicles
250,204
196,710
27
Even more impressive has been the growth in companys operating EBITDA, which increased by
47% to touch Rs 1805 crore during 2005-06. Consequently the operating EBITDA margin grew by
220 basis points to 17.9% of the sales and operating income. Earnings per share have been risen
from Rs 75.60 to Rs 111.00 in the current year. Dividend too has grown to Rs 40 per share
(400%) for the year ended 31st March 2006 as against Rs 25 per share in 2005.
Over the past few years, Bajaj Auto has focused on his technology development, and product
development in anticipation of market needs, scaling up its manufacturing facilities, implementing
best-in-class production systems, rationalizing vendors, slashing costs while upgrading quality,
restructuring dealerships, and distribution channels. These capabilities enabled the company to
create exciting new products, which have set benchmarks in styling, design, and technology. The
companys products are creating a customer pull at all price points and the company has now
transformed from being a price warrior to a price leader. The results of these strategies are
reflected in its financial statements as follows (refer Table B and C):
Table B Profit and Loss Account for Bajaj Auto Ltd for the year ended
March 2003
Sales
Other income
Change in stocks
Expenditure
Profit & Loss
PBDIT
Interest
Depreciation
PBT
Tax provision
PAT
Dividends

4987.05
297.10
32.92
5317.07
4335.16
981.91
1.12
171.42
809.37
274.44
534.93
159.81

March 2004
March 2005
(Rs in crore)
5721.44
7078.06
507.04
516.41
10.87
-11.57
6239.35
7582.90
5017.92
6286.91
1221.43
0.94
184.32
1036.17
285.41
750.76
285.37

1295.99
0.67
185.66
1109.66
349.32
760.34
288.64

March 2006
9284.84
602.52
50.10
9937.46
8131.87
1805.59
0.34
191.28
1613.97
509.37
1104.60
461.50

Table C Assets and Liabilities of Bajaj Auto Ltd as on 31 March 2006

Liabilities
Mar 05
Mar 06
Assets
Mar 05
Mar 06
Rs in crore
Rs in crore
Net Worth
4447.16
5349.79 Gross fixed assets
2870.02
3092.28
Paid up Equity capital
101.18
101.18 Capital WIP
9.14
25.26
Bonus Equity capital
114.17
114.17 Less: cumulative
1660.32
1834.19
depreciation
Minority interest
89.46
148.79 Net fixed Assets
1205.64
1230.77
Reserves & Surplus
4256.52
5099.82 Investments
5273.83
6865.43
Free reserves
4233.28
5076.58 Deferred tax assets
9.20
6.43
Share premium
87.07
285.78 Inventories
224.70
274.47
reserves

Other free reserves

Specific reserves
Borrowings
Deferred tax
liabilities
Current liabilities &
provisions
Sundry Creditors
Other current liabilities
Provisions

Total Liabilities

4146.21
23.24
1229.17

4790.80
23.24
1469.44

139.90

87.58

4284.64

7773.20

833.86
1169.04

1404.40
3674.37

2281.74

2694.43

10100.87

14680.01

Receivables
Sundry debtors
Debtors exceeding 6
months
Advances/loans to
corporate bodies
Group/associate
companies
Other companies
Advance payment of
tax
Other receivables
Cash & Bank
balance
Intangible/DRE not
written off
Total Assets

3116.05
176.97
0.20

5799.11
302.54
1.13

62.29

33.66

34.44

19.41

27.85
1823.60

14.25
1869.40

1053.19
266.88

3593.51
476.48

4.57

27.32

10100.87

14680.01

Notwithstanding its excellent financial performance in the years following its major strategic shift,
the management of the firm believes in the philosophy that the quest for perfection is eternal.
To preclude the complacency from setting in, the management not only sets higher standards it
also continuously monitors its performance and benchmarks with the industry performance in
general and their closest competitors results in particular.
Discuss
1. Is the profitability performance of the firm satisfactory? If not, how can it be improved?
2. How attractive is the firm from the short-term and long-term lenders, perspective? Does
the firm appear to be the favorite destination in the automobile sector (two-wheelers and
three-wheelers segment) for the lenders?
3. How efficient is the firm been in utilizing the resources at its disposal? How do you think
the company can improve upon its efficiency?

Assignment C
State whether the following are true or false:

1. Accounting is a language of business. TRUE

2. Accounting is a service function. TRUE
3. Accounting records only those transactions and events which are financial
character. FALSE
4. Drawings reduce capital. TRUE
5. Capital is increased by profit and decreased by losses. TRUE
6. The system of recording transaction on the basis of their two old aspects is
called double entry system. TRUE

7. Purchases made from B for cash should be debited to B. FALSE

8. Earnings of revenue means increase in Cash/Bank balance TRUE
9. The balance of an account is always known by the side which is shorter.

FALSE
10. The return of goods by a customer should be debited to Returns Inwards
Account. TRUE

11. Goods bought for resale are referred to as Stocks TRUE

12. If the business has any liability, the proprietors capital must be more than
the total assets. FALSE
13. Withdrawal of money by the owner is an expense for the business. TRUE

14. Ledger is called the book of final entry. TRUE

15. Cash book is used to record all receipts and payments of cash. TRUE
16. Sales book is used to record all credit sales. TRUE
17. The journal is not a book of original entry. TRUE

18. Goodwill is an intangible asset. TRUE

19. Salaries & Wages appearing in the trial balance are shown on the liabilities
side of the balance sheet. TRUE
20. The profit & loss account is one of the financial statements. TRUE
21. Share having preferential right as to dividend and repayment of capital
are termed as equity share capital. TRUE
22. Shares which are not preference shares are called equity shares. FALSE
23. The amount of share premium received by the company is shown under
the heading reserves & surplus in the companys balance sheet. FALSE

24. Debenture holders are not the member of the company. FALSE
25. There are no legal restrictions, similar to shares, for issue of debentures at
discount. FALSE
26. Fixed cost per unit remains constant. TRUE
27. Direct cost is that cost which can not be easily allocated to cost units.

FALSE
28. Selling overheads form a part of cost of production. TRUE
29. Manufacturing and administrative overheads are different. TRUE
30. Total fixed cost remains unaffected by the change in volume of output.

TRUE
31. Variable cost per unit remains fixed. FALSE
32. In chemical industries unit costing is used. TRUE
33. The output of a process is transferred to next process. TRUE
34. Good units bear the abnormal loss arising in the process costing. TRUE
35. Excess of pre-estimated loss over actual loss is known as abnormal loss.

TRUE
36. Marginal costing is a method of ascertaining cost. TRUE
37. A firm earns no profit or incurs no loss at BEP. TRUE
38. Margin of Safety implies Break Even Point. TRUE
39. In marginal costing, stock is valued at fixed costs. TRUE
40. Sales below BEP mean profit. FALSE