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In case of any assumptions

made, please state your assumptions clearly
Question 1 Company A sells product X and Y. Product X can be returned within 60 days of sales. Cost of goods sold for X is INR
50. Customer 1 has bought 10 items on 1 Jan 2021 (@100 INR / product X) in cash and returned 1 item on 31 Jan
2021. Please capture :
a) all journal entries relevant which reflects the complete cycle of transactions and
b) Closing cash balance and inventory at 31 Jan 2021 assuming following opening balance at the start of day on 1 Jan
2021:
i) Cash balance : NIL;
ii) Finished goods inventory : INR 1000

Question 2 Please specify type of balance (asset/ liabilities) for following balances:
a) Avances from customers
b) Excess insurance costs paid
c) Overdrawn bank balance
d) Provision for unpaid salary costs
Question 3 An investment is expected to yield INR 1089 at the end of year 2 (compound interest rate of 10% p.a.). Please provide
present value of the investment
Estimated marks

(a) 1 Mark for each entry

(b)
i) Cash balance : 2 marks
ii) Inventory balance : 2
marks

1 mark each

2 marks