FIFO

DATE PARTICULARS PURCHASE

UNIT RATE AMOUNT
OPENING INVENTORY 0 0 0
PURCHASES 50 140 7000
75 220 16500

ISSUE

LIFO

DATE PURCHASE
UNIT RATE AMOUNT
OPENING INVENTORY 0 0 0
PURCHASES 50 140 7000
75 220 16500

ISSUE

WEIGHTED AVERAGE

DATE PURCHASE
UNIT RATE AMOUNT
OPENING INVENTORY 0 0 0
PURCHASES 50 140 7000
75 220 16500

ISSUE

FIFO Closing stock 5500

Cost of Goods Sold 18000
 LIFO Closing stock 3500
Cost of Goods Sold 20000

Avg Cost Closing stock 4700

Cost of Goods Sold 18800

Lifo Reserve 18000 - 20000 = -2000

 ISSUE BALANCE
UNIT RATE AMOUNT UNIT RATE AMOUNT
0 0 0 0 0 0

125 188 23500

75 220 16500

50 140 7000
50 220 11000
25 220 5500

ISSUE BALANCE
UNIT RATE AMOUNT UNIT RATE AMOUNT
0 0 0 0 0 0

125 188 23500

75 220 16500
25 140 3500
25 140 3500

ISSUE BALANCE
UNIT RATE AMOUNT UNIT RATE AMOUNT
0 0 0 0 0 0

125 188 23500

100 188 18800 25 188 4700

QUESTION-2

SOLUTION

PROPERTY, PLANT & EQUIPMENT A/C

PARTICULARS AMOUNT PARTICULARS

₹ -
 AMOUNT

₹ -
Q3 12 Marks
Prepare a Cash Flow Statement and anlyse the statement from the following information given below using
Indirect Method, along with the comments on the activities of the firm, such as to help the board of directors
in the process of discussion and interpretation in the meeting.

Balance Sheet of Pratibha Sugars Private Limited

as on the 31st March 2021 and 31st March, 2020
Assets 31-3-2021 31-3-2020 Difference
NON-CURRENT ASSETS
Property, Plant and Equipment 246,125 188,650 57,475
Accumulated Depreciation (115,225) (103,400) (11,825)
Net Property, Plant and Equipment 130,900 85,250 45,650
Intangible Assets 10,125 8,100 2,025
Financial Assets -
Long Term Investments 5,000 32,050 (27,050)
Total Non-Current Assets 146,025 125,400 20,625
-
CURRENT ASSETS -
Inventory 58,575 45,100 13,475
Financial Assets: -
Accounts Receivables 26,950 11,825 15,125
Cash and Cash Equivalents 3,300 10,450 (7,150)
Expenses Paid in Advance 6,600 4,125 2,475
-
Total Current Assets 95,425 71,500 23,925
-
Total Assets 241,450 196,900 44,550
-
EQUITY AND LIABILITIES -
EQUITY -
Equity Share Capital 134,750 112,750 22,000
Retained Earnings 34,650 26,675 7,975
Total Equity 169,400 139,425 29,975
-
NON-CURRENT LIABILITIES -
Debentures 26,125 39,050 (12,925)
Loan From Bank 15,125 - 15,125

Total Non-current Liabilities 41,250 39,050 2,200

-
CURRENT LIABILITIES -
Accounts Payables 28,325 13,200 15,125
Provision for Tax 2,475 5,225 (2,750)
Total Current Liabilities 30,800 18,425 12,375
-
Total Equity and Liabilities 241,450 196,900 44,550

Additional Information:
a) Dividend Received 4,950
b) Interest Received 3,300

c) Gain on sale of equipment 6,325

d) Interest paid 6,050
e) Loss on sale of investments 3,850
f) Taxes paid during the current year 7,975
g) Purchased Equipment on Long Term Loan 15,125
h) Purchased Equipment for cash 54,725
i) Amount realised from the sale of Equipment 13,750
j) Accumulated depreciation on equipment sold 4,950
k) Cost of Investments sold 30,250
l) Depreciation for the year 16,775
m) Bad Debts expense charged to profit this year 8,800
n given below using CASH FLOW STATEMENT FOR THE YEAR ENDED 31ST MARCH 2018 [INDIRECT M
he board of directors PARTICULARS
CASH FLOW FROM OPERATING ACTIVITIES
RETAINED EARNINGS
PROVISION FOR TAX FOR THE CURRENT YEAR
GAIN ON SALE OF EQUIPMENT
LOSS ON SALE OF INVESTMENT
DEPRECIATION
INTEREST PAID
WORKING CAPITAL ADJUSTMENT
INCREASE IN RECEIVABLES
INCREASE IN PAYABLES
EXPENSE PAID IN ADVANCE-INCREASE
INCREASE IN STOCK
TAX PAID
DIVIDEND INCOME
INTEREST INCOME
TOTAL (A)

CASH FLOW FROM INVESTING ACTIVITIES

DIVIDEND RECEIVED
INTEREST RECEIVED
SALE OF EQUIPMENT
SALE OF EQUIPMENT-2
GAIN ON SALE OF EQUPMENT
NET SALE OF INVESTMENT
PURCHASE OF EQUIPMENT FOR CASH
PURCHASE OF INVESTMENTS

TOTAL (B)

CASH FLOW FROM FINANCING ACTIVITIES

INTEREST PAID
ISSUE OF EQUITY SHARES
REDEMPTION OF DEBENTURES

TOTAL (C)

NET INCREASE IN CASH AND CASH EQUIVALENTS

OPENING CASH & CASH EQUIVALENTS
CLOSING CASH & CASH EQUIVALENTS
ED 31ST MARCH 2018 [INDIRECT M
AMOUNT
Ledger Account Notes
7975.00
5225.00 PROVISION FOR DEPRECIATION A/
-6325.00 PARTICULARS AMOUNT
3850.00 TO PROPERTY, PLANT & EQUIPMENT 4950.00
16775.00
6050.00

-15125.00
15125.00
-2475.00
-13475.00 TO BALANCE C/D 115225.00
-7975.00 120175.00
-4950.00
-3300.00
1375.00
PROPERTY, PLANT & EQUIPMENT A
PARTICULARS AMOUNT
4950.00 TO BALANCE B/D 188650.00
3300.00 TO GAIN ON SALE 6325.00
2475.00 TO CASH A/C 54725.00
4950.00 TO CREDITORS 15125.00
6325.00
26400.00
-54725.00
-5225.00

-11550.00 264825.00

-6050.00 LONG TERM INVESTMENT A/C

22000.00 PARTICULARS AMOUNT
-12925.00 TO BALANCE B/D 40150.00

TO PURCHASE OF INVESTMENTS
[BALANCE] 5225.00
3025.00

-7150.00
10450.00
3300.00 45375.00

PROVISION FOR TAX A/C

PARTICULARS AMOUNT
TO TAX PAID DURING THE YEAR 7975.00

TO BALANCE C/D 2475.00

10450.00
edger Account Notes

ON FOR DEPRECIATION A/C

PARTICULARS AMOUNT
BY BALANCE B/D 103400.00
BY DEPRECIATION A/C 16775.00

120175.00

Y, PLANT & EQUIPMENT A/C

PARTICULARS AMOUNT
BY PROVISION FOR DEPRECIATION A/C 4950.00
BY SALE OF EQUIPMENT 13750.00

BY BALANCE C/D 246125.00

264825.00

TERM INVESTMENT A/C

PARTICULARS AMOUNT
BY BANK A/C 26400.00
BY LOSS ON SALE OF INVESTMENT 3850.00

BY BALANCE C/D 15125.00

 45375.00

OVISION FOR TAX A/C

PARTICULARS AMOUNT
BY BALANCE C/D 5225.00
BY PROVISION FOR TAX FOR THE
CURRENT YEAR [BALANCE] 5225.00

10450.00
Q4 10 Marks
Ambar Company private limited was a diversified company that sold various consumer products, including foo
Financial statements for the company are shown below :

Amerbran Company
Balance sheet As on December 31
(in thousands)
Particulars 2020
cash 28,912
Accounts Receivable 756,152
Inventories 1,244,912
Prepaid Expenses 76,140
Total Current Assets 2,106,116
Investments 1,116,534
Property, Plant and Equipment 1,566,268
Accumulated Depreciation (723,442)
Net PPE 842,826
Goodwill 645,210
Other Assets 115,826
Total Assets 4,826,512

Liabilities and Shareholders' Equity

Accounts Payable 271,452
short term debt 430,776
Accrued expenses payable 922,990
Total Current Liabilities 1,625,218
Long Term Liabilities 880,674
Total Liabilities 2,505,892
Convertible Preferred Stock 33,828
Common Stock, at par 211,886
Additional Paid In Capital 53,641
Retained Earnings 2,021,265
Total Liabilities & Shareholders' Equity 4,826,512

1. Return on Assets Net Income / Total Assets

2. Return on Equity Net Income/ Shareholders equity
3. Gross Margin Gross margin/ Net sale revenue
4. Return on Sales Operating Profit/ Net Sales Revenue
5. Accounts Receivables Period;
Number of days in a year/Stock Turnover
6. Days' Inventories; Ratio
7. Current Ratio current assets/ current liabilties
8. Times Interst Earned pretax operating profit+interest/interest
9. Operating Profit Ratio. Operating Profit/ Net Sales Revenue
consumer products, including food, tobacco, distilled products, and personal care products and financial services.

Income Statement
For the year ended December 31, 2020
(in thousands) (in thousands)
2019 Particulars 2020 2019
23,952 Sales Revenues Net 6,577,480
687,325 cost of sales 2,573,350
1,225,402 Excise Taxes on Goods Sold 2,354,350
77,167 Gross Margin 1,649,780
2,013,846 Selling, General and Administration Expense 974,121
1,058,637 Income before Income taxes 675,659
1,366,719 Provision for Income Taxes 296,877
(645,734) Net Income 378,782
720,985
577,606 Additional Information:
62,374 The company's interest expense for the year 2020 was Rs. 102,791
4,433,448 and is included in the Selling General and Administration Expenses.

Compute the following ratios and comment;

238,377 1. Return on Assets
351,112 2. Return on Equity
728,262 3. Gross Margin
1,317,751 4. Return on Sales
932,828 5. Accounts Receivables Period;
2,250,579 6. Days' Inventories;
42,611 7. Current Ratio
58,712 8. Times Interst Earned
57,072 9. Operating Profit Ratio.
2,024,474
4,433,448

0.08
0.17
0.2508225035
0.1027230794

Stock Turnover Ratio

175.19 2.08
 1.295897535
7.5734840599
0.1027230794
nd financial services.

r 31, 2020
ANSWER
The Financial health of an enterprise represented by the financial statements is one of the key aspects which c
appointed to oversee and govern the management and to make corporate decisions on behalf of the sharehold
Therefore, the Board of Directors and the senior managers must possess sound knowledge of the major financ
knowledge is not to be expected.
he key aspects which concern the shareholders since they are the owners of the company. The Board of Directors are
behalf of the shareholders only.
dge of the major financial aspects since they are responsible for reporting to the shareholders although an expert level of
oard of Directors are

hough an expert level of