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  • Mgt101 GDB 1 Sol 2022 Vu Expert

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    Arslan Ahmed
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    This document provides the solutions to an accounting problem set for MGT101 GDB 1 in Spring 2022. It calculates depreciation, trade receivables, and corrects reported profit by including depreciation and provision for doubtful debts expenses per accounting principles. The key information is that reported profit should be adjusted from Rs. 560,000 to Rs. 551,333 after incorporating depreciation of Rs. 8,000 and provision for doubtful debts of Rs. 667.

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    Mgt101 Gdb 1 Sol 2022 Vu Expert

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    This document provides the solutions to an accounting problem set for MGT101 GDB 1 in Spring 2022. It calculates depreciation, trade receivables, and corrects reported profit by including depreciation and provision for doubtful debts expenses per accounting principles. The key information is that reported profit should be adjusted from Rs. 560,000 to Rs. 551,333 after incorporating depreciation of Rs. 8,000 and provision for doubtful debts of Rs. 667.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Flag for inappropriate content
    10 views2 pages

    Mgt101 GDB 1 Sol 2022 Vu Expert

    Uploaded by

    Arslan Ahmed
    This document provides the solutions to an accounting problem set for MGT101 GDB 1 in Spring 2022. It calculates depreciation, trade receivables, and corrects reported profit by including depreciation and provision for doubtful debts expenses per accounting principles. The key information is that reported profit should be adjusted from Rs. 560,000 to Rs. 551,333 after incorporating depreciation of Rs. 8,000 and provision for doubtful debts of Rs. 667.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Flag for inappropriate content
    of 2

    MGT101 GDB 1 Solution Spring 2022

    YouTube Channel: VU EXPERT


    Website: www.vuexpertsolutions.com
    Please Check the Calculations

    1. What is the amount of depreciation which should be presented as an expense in the


    Income statement for the period ended on 2021?

    𝐹𝑖𝑛𝑑 𝐷𝑒𝑝𝑟𝑒𝑐𝑖𝑎𝑡𝑖𝑜𝑛 𝐴𝑚𝑜𝑢𝑛𝑡?


    𝐶𝑜𝑠𝑡 𝑜𝑓 𝑀𝑎𝑐ℎ𝑖𝑛𝑒 = 240,000
    𝑀𝑎𝑐ℎ𝑖𝑛𝑒 𝑡𝑖𝑚𝑒 𝑝𝑒𝑟𝑖𝑜𝑑 = 5 𝑦𝑒𝑎𝑟𝑠
    𝑀𝑎𝑐ℎ𝑖𝑛𝑒 𝑢𝑠𝑎𝑔𝑒 𝑒𝑛𝑑 𝑜𝑓 𝑦𝑒𝑎𝑟 = 2 𝑚𝑜𝑛𝑡ℎ𝑠
    240,000
    𝑁𝑜𝑤 𝐹𝑖𝑛𝑑 𝐴𝑛𝑛𝑢𝑎𝑙 𝑑𝑒𝑝𝑟𝑒𝑐𝑖𝑎𝑡𝑖𝑜𝑛 =
    5
    = 𝟒𝟖𝟎𝟎𝟎
    48000 × 2
    𝐷𝑒𝑝𝑟𝑒𝑐𝑖𝑎𝑡𝑖𝑜𝑛 𝑎𝑚𝑜𝑢𝑛𝑡 𝑜𝑓 2 𝑚𝑜𝑛𝑡ℎ𝑠 =
    12
    = 𝟖𝟎𝟎𝟎

    2. What is the amount of trade receivable which should be presented as an asset in


    Balance Sheet as on 31st December 2021?

    𝑅𝑒𝑐𝑒𝑖𝑣𝑎𝑏𝑙𝑒 𝐴𝑚𝑜𝑢𝑛𝑡 = 100,000


    𝐷𝑒𝑏𝑡𝑓𝑢𝑙 𝐷𝑒𝑏𝑡𝑠 = 20000
    𝑁𝑅𝐴 (𝑛𝑒𝑡 𝑅𝑒𝑐𝑒𝑣𝑖𝑎𝑏𝑙𝑒 𝑎𝑚𝑜𝑢𝑛𝑡) = 𝑟𝑒𝑐𝑒𝑖𝑣𝑎𝑏𝑙𝑒 𝑎𝑚𝑜𝑢𝑛𝑡 − 𝑑𝑒𝑏𝑡𝑓𝑢𝑙 𝑑𝑒𝑏𝑡𝑠
    𝑁𝑒𝑡 𝑅𝑒𝑐𝑒𝑖𝑣𝑎𝑏𝑙𝑒 𝐴𝑚𝑜𝑢𝑛𝑡 = 100,000 − 20000
    = 80,000
    80000
    5% 𝑝𝑟𝑜𝑣𝑖𝑠𝑖𝑜𝑛 𝑜𝑛 𝑎𝑛𝑛𝑢𝑎𝑙 𝑟𝑒𝑐𝑒𝑣𝑖𝑎𝑏𝑙𝑒 𝑎𝑚𝑜𝑢𝑛𝑡 =
    5%
    = 4000
    4000 × 2
    𝑓𝑜𝑟 2 𝑚𝑜𝑛𝑡ℎ𝑠 =
    12
    = 667
    𝑁𝑒𝑡 𝑟𝑒𝑐𝑒𝑣𝑖𝑎𝑏𝑙𝑒 𝑎𝑚𝑜𝑢𝑛𝑡 − 𝑓𝑜𝑟 2 𝑚𝑜𝑛𝑡ℎ𝑠 𝑝𝑟𝑜𝑣𝑖𝑠𝑖𝑜𝑛
    = 80,000 − 667
    = 79333

    3. Which fundamental accounting principle was violated due to NOT reporting the
    provision for depreciation and provision for doubtful debts in the Income
    Statement?

    𝐴𝑐𝑐𝑜𝑟𝑑𝑖𝑛𝑔 𝑡𝑜 𝑡ℎ𝑒 𝑎𝑐𝑐𝑢𝑟𝑎𝑙 𝑏𝑎𝑠𝑒𝑠 𝑚𝑎𝑡𝑐ℎ𝑖𝑛𝑔 𝑝𝑟𝑖𝑛𝑐𝑖𝑝𝑎𝑙 𝑤𝑎𝑠 𝑣𝑖𝑜𝑙𝑎𝑡𝑒𝑑


    𝑑𝑢𝑒 𝑡𝑜 𝑛𝑜𝑡 𝑟𝑒𝑝𝑜𝑟𝑡𝑖𝑛𝑔 𝑝𝑟𝑜𝑣𝑖𝑠𝑖𝑜𝑛 𝑓𝑜𝑟 𝑑𝑒𝑝𝑟𝑒𝑐𝑖𝑎𝑡𝑖𝑜𝑛 𝑎𝑛𝑑 𝑝𝑟𝑜𝑣𝑖𝑠𝑖𝑜𝑛
    𝑓𝑜𝑟 𝑑𝑜𝑢𝑏𝑡𝑓𝑢𝑙 𝑑𝑒𝑏𝑡𝑠 𝑖𝑛 𝑖𝑛𝑐𝑜𝑚𝑒 𝑠𝑡𝑎𝑡𝑒𝑚𝑒𝑛𝑡.

    4. What will be the correct amount of profit after incorporating the information given
    above?

    𝐺𝑖𝑣𝑒𝑛 𝑑𝑎𝑡𝑎:
    𝑃𝑟𝑜𝑓𝑖𝑡 = 560,000
    𝐷𝑒𝑝𝑟𝑒𝑐𝑖𝑎𝑡𝑖𝑜𝑛 = 8000
    𝑃𝑟𝑜𝑣𝑖𝑠𝑖𝑜𝑛 = 667
    𝐴𝑚𝑜𝑢𝑛𝑡 𝑜𝑓 𝑝𝑟𝑜𝑓𝑖𝑡 = 𝑝𝑟𝑜𝑓𝑖𝑡 − 𝑑𝑒𝑝𝑟𝑒𝑐𝑖𝑎𝑡𝑖𝑜𝑛 − 𝑝𝑟𝑜𝑣𝑖𝑠𝑖𝑜𝑛
    = 560,000 − 8000 − 667
    = 551, 333

    To Download Solution visit website :


    www.vuexpertsolutions.com

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