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Xavier Institute of Management, Bhubaneswar

Financial Reporting & Analysis

MBA BM 2016

Understanding the relationship among

Business decisions( BD ), Financial items ( FI ) and Financial statements ( FS )

1. X started business with cash: Rs.150000

Purchased goods on credit from Mr. Y: Rs. 50000

Purchased furniture on credit from F ltd.: Rs.25000

Sold goods costing Rs. 10000 at a profit of 25% on sales for cash.

Bought goods costing Rs. 20000 for cash.

Sold the available goods to Ms. Z on credit at a profit of 25% on cost.

Paid Salaries: Rs. 80000

Rent due but not paid: Rs. 5000

Received 75% of the money due from Ms. Z

Paid 50% of the money due to Mr. Y

Purchased 10 shares of Infosys @ Rs.2200.

Required: Convert each of the above business decision into financial transaction and reflect the same in the
Financial statements

2. Mr. A started a business on 1st January 2016. Following the transactions upto 31st March’13

Date Transaction Amount

1-Jan-16 Started business with own money 500,000

10-Jan-16 Took a 12% loan from SBI 250,000

15-Jan-16 Purchased computers 50,000

25-Jan-16 Purchased 100TCS shares @1100 110,000

. Out of the capital. Started business with a capital of Rs.000 27-Feb-16 Paid the following: Rent 5. Bought furniture worth Rs.000 Internet connection charges 1.000 Electricity Charges 2.500 5-Feb-16 Sold 50% of the TCS Shares for 60.000 Internet connection charges 1. 5. 50000 and paid by cheque.000. Rs.000 25-Mar-16 Purchased Timex Shares 80.500 Required: Record these financial transactions using accounting equation in the financial statements 3.000 Sold SBI shares 45.000 Electricity Charges 2. 400.000 Internet connection charges 1.000 was deposited in the bank and balance was cash in hand.500 10-Mar-16 Purchased the shares of AXIS Bank 50.000 29-Mar-16 Sold Timex shares 70.00.000 Electricity Charges 2.000 10-Feb-16 Purchased SBI shares 25.000 27-Mar-16 Sold bal 50% of the TCS Shares 55. 30-Jan-16 Paid the following: Rent 5. Following are the transactions of GM Ltd.000 30-Mar-16 Paid the following Rent 5.

Y for Rs. The entire money was declared bad-debt.25000 Bought T Shirts from Tirupur: Rs. M: Rs.5000 Electricity charge due but not paid: Rs. Bought stationery: Rs.75000.50000.2000 Insurance premium paid by cheque: Rs. 60000. Bought textile on credit from Mr. Y failed to make the payment on the due date.7500. Paid wages : Rs. M: Rs. Mr. 5000 Paid rent: Rs. 2000 Paid Mr. 10000 Sold 10% of the balance textile on credit to Mr.100000 Sold 50% of the textile for Rs. Paid by cheque Sold all Tshirts to a local retailer at Rs. Required: Convert each of the above business decision into financial transaction and reflect the same in the Financial statements .