Financial Accounting End Term

Q1.
Jyoti Limited
Cash Flow Statement for the year ended 31st, 20X1

Particular Rs in lakhs Rs in lakhs

Cash Flow from Operating Activity
Net profit 25,000
Add: Provision for tax 5,000
Net profit before tax 30,000

Adjustment for:
Depreciation 20,000
Loss on sale of fixed assets(net) 40
Amortization of capital grant (6)
Profit on sale of investment (100)
Interest income on investment (2,506)
Interest expense 10,000
Operating profit before working capital changes 57,428

Adjustment for increase in working capital

(excluding cash and bank balances) (56,075)
Cash generated from operations 1,333
Tax paid (4,248) (2,895)
Net cash used in Operating Activities (A)

Cash Flow from Investing Activities

Sales of fixed assets 145
Sales of investment 27,865
Interest income on investment 2,506
Purchased of fixed assets (14,560)
Investment in joint venture (3,850)
Expenditure on construction. Work in profit (34,740) (22,634)
Net cash used in Investing Activities (B)

Cash Flow from Financing Activities

Proceeds from calls in arrear 2
Receipt of grant for capital projects 12
Proceeds from long term borrowing 25,980
Proceeds from short term borrowing 20,575
Interest paid during the year (10,520)
Dividend (including dividend tax) paid (8,533) 27,514
Net cash from Financing activities (C)
1,985
Net increase in cash and cash equivalents (A+B+C) 5,003
Add: Cash and cash equivalents (opening balance) 6,988
Cash and cash equivalents (closing balance)
Working note:
1. Book value of the assets sold 185
Less: Loss on sale of assets (40)
Proceeds on sale 145

Q2.
Cash and Equivalents
$119,115
$119,115

Accounts Receivable
$162,500
$162,500

Store equipment
$215,000
$215,000

Merchandise inventory
$700,680 $315,990
$384,690

Supplies Inventory
$15,475 $10,225(3)
$5,250

Prepaid Insurance
$38,250
$38,250

Selling Expense
$24,900
$24,900(a)

Sales Salaries
$105,750
$3,575(5) $109,325(b)

Cost of Goods Sold

$315,990(1)
$315,990(h)

Depreciation Expense
$10,750(2)
$10,750(i)
 Supplies Expense
$10,225(3)
$10,225(j)

Accrued Interest
$3,730(4)
$3,750

Accrued Sales Salaries

$3,575(5)
$3,575

Interest Receivable
$410(6)
$410

Interest Income
$410(6)
$410(l)

Miscellaneous General Expense

$31,000
$31,000(c)

Sales Discount
$6,220
$6,220(d)

Interest Expense
$9,300
$3,730(4) $13,030(e)

Social Security Taxes

$9,600
$9,600(f)

Accumulated Depreciation
$37,300
$10,750(2)
$48,050

Accounts Payable
$118,180
$118,180

Notes Payable
$143,000
$143,000
 Common Stock
$300,000
$300,000

Retained Earning
$122,375
$176,185(m)
$298,560

Sales
$707,635
$707,635(g)

Profit and Loss

$24,900(a) $707,635
$109,325(b) $410
$31,000(c)
$6,220(d)
$13,030(e)
$9,600(f)
$315,990(h)
$10,750(i)
$10,225(j)
$176,185(m)

Adjusting Entries are:

1) Cost of goods sold 315,990
Merchandise Inventory 315,990

2) Depreciation Expense 10,750

Accumulated Depreciation 10,750

3) Supplies Expense 10,225

Supplies Inventory 10,225

4) Interest Expense 3,730

Accrued Expense 3,730

5) Sales Salaries 3,575

Accrued Sales Salaries 3,575

6) Interest Receivable 410

Interest Income 410
Closing Entries are:
a) Profit and Loss 24,900
Selling Expense 24,900

b) Profit and Loss 109,325

Sale Salaries 109,325

c) Profit and Loss 31,000

Miscellaneous General expense 31,000

d) Profit and Loss 6,220

Sales Discount 6,220

e) Profit and Loss 13,030

Interest Expense 13,030

f) Profit and Loss 9,600

Social Security Taxes 9,600

g) Sales 707,635
Profit and Loss 707,635

h) Profit and Loss 315,990

Cost of goods sold 315,990

i) Profit and Loss 10,750

Depreciation Expense 10,750

j) Profit and Loss 10,225

Supplies Expense 10,225

k) Interest income 410

Profit and Loss 410

l) Profit and Loss 176,185

Retained Earnings 176,185
 Jackson Company
Income statement for the year ---
Sales 707,635
Sales discount (6,220)
Net sales 701,415
Cost of goods sold 315,990
Depreciation 10,750
Sales salaries 109,325
Selling expense 24,900
Supplies expense 10,225
Social security taxes 9,600
Miscellaneous general expenses 31,000
Interest expense 13,030
Interest income 410
Net Income 176,185

Jackson Company
Balance Sheet as of January 31, ----
Assets Amount Liabilities Amount
Cash and cash Equivalents 119,115 Accounts payable 118,180
Accounts receivable 162,500 Accrued interest 3,370
Merchandise inventory 384,690 Accrued Sales salaries 3,575
Suppliers inventory 5,250 Note payable 143,000
Prepaid insurance 38,250 Common stock 300,000
Interest receivable 410 Retained earning 298,560
Store equipment 215,000
Accumulated depreciation (48,050)

877,165 877,165