ASSIGNMENT NO 1

Question: Following information has been extracted from the books of ABC Enterprises

Particulars Rs.
Cash in hand 10,000
Debtors 20,000
Machinery 300,000
Building 400,000
Furniture 500,000
Creditors 5,000
Bank overdraft 15,000
Loan taken from bank for period of 5 years 200,000
Loan taken from Mr B for period of 3 months 30,000
Loan given to Mr D for period of 5 months 35,000
Sales 800,000
Cost of goods sold 550,000
Freight outwards 13,000
Advertisement expenses 14,000
Distribution expenses 12,000

Based on information given above, you are required to calculate the:

1. Current Assets
2. Fixed Assets
3. Current Liabilities
4. Gross Profit
5. Selling Expenses

Answer:

1. Current Assets = Cash in hand + Debtors + Loan given to Mr D for period of

aaaaaaaaaaaaaaaaaaaaaaaaaaaaaaa5 months
= 10,000 + 20,000 + 35,000
= Rs. 65,000
2. Fixed Assets = Machinery + Building + Furniture
= 300,000 + 400,000 + 500,000
= Rs. 1,200,000
3. Current Liabilities = Creditors + Bank Over Draft + Loan taken from Mr B for
aaaaaaaaaaaaaaaaaaaaaaaaaaa period of 3 months
 = 5,000 + 15,000 + 30,000

= Rs. 50,000

4. Gross Profit = Sales – Cost of Goods Sold

= 800,000 – 550,000
= Rs. 250,000
5. Selling Expenses = Freight outward + Advertisement expenses + Distribution
aaaaaaaaaaaaaaaaaaaaaaaaaaa expenses
= 13,000 + 14,000 + 12,000
= Rs. 39,000