Professional Documents
Culture Documents
1. The net profit before taxes as per the profit and loss account, of Gaman Ltd is Rs
269244. With the given set of information, classify the given items as (operating /
investing / financing), share the correct classification with logical reasoning
And calculate the cash flow from operating activities
Ans - Depreciation although operating item but does not result into outflow of cash. since it
has been deducted to arrive at the figure of net profit before taxes the same must be added to
arrive at cash flows. Similarly we shall treat expenses.
depreciation vs amortization
depreciation word is used for tangible assets (as 10)
amortization is for intangible assets (as 26)
Cash flow from operating activities=269244+95780-26000-35000+12000-
45000+85000+110000 =466024
2. Discuss the steps of performing trend analysis on the financial statements of any
company.
Download the Balance sheet of any company of your interest from the open sources.
Perform the comparative analysis of that Balance sheet and discuss your findings.
Hint to attempt: to choose a company from open source- type the name of the company
in the web page.
Download the annual report as available, latest. Identify the relevant data, and then
perform comparative analysis of Balance Sheet of the company
Ans - The first step involves identifying economic features of the firm. The quality of
financial statements of the firm need to assessed. Thereafter, it is inevitable to analyze present
risk and profitability relative to the account. The forecasted financial statements need to be
prepared. The firm's value need to be seen.
From the balance sheet, the company is fully equipped with properties which help in
sustainability. Teddy Fab Inc has experienced profitability from its presented transactions.
3. Mr. Akbar provides you with the following information-(all the transactions are
separate and independent of each other)
Started business with cash Rs150000
Purchased goods for cash Rs 25000
Sold goods to C on credit Rs 20000
Paid salary for cash Rs15000
Deposited cash into the bank account Rs100000
a. Identify the accounts being affected in the monetary transaction and Identify the type of
accounts identified - real, personal or nominal
b. Discuss the rule of passing the journal entry applicable here and pass the journal entry
(Golden rule or transaction analysis, any of these rule/s can be taken as a base to justify
Ans b- (1)Rule for passing the Journal Entry as per golden Rule.
1) personal Account
Debit - Receiver
Credit - Giver
(2)Real Account
Debit - What comes in
credit - what goes out.
JOURNAL ENTRIES