Assignment # 3

Q No.1 Afzal company provided information on December 31,2004.

TITLE OF ACCOUNT DEBIT CREDIT

Plant assets Rs.37,50,000
Cash 100,000
Account Receivable 162,500
Merchandise Inventory-beg 62500
Sales return 7000
Purchases 12,45000
Transportation in 20000
Salaries expense 145000
Prepaid advertising 20000
Director’s fee 2,15000
Sales revenue 18,75000
Commission income 20000
Accumulated depreciation 350000
Retained earning 367500
Paid up capital 25,00000
10% debentures payable 500000
Account payable 112500
Purchases return 2000
57,27,000 57,27,000

Additional information:
1. Merchandise Inventory-ending Rs.45,000
2. Depreciation 10% on fixed assets
3. Tax rate is 30%

Required:
a) Income Statement showing EBIT
b) Balance Sheet
Q No.2 Delux company authorized capital is 500,000 shares of Rs.10 each. Following information
provided on December 31,2004.

TITLE OF ACCOUNT DEBIT CREDIT

Cash 120,000
Account receivable 155,000
Account payable 145,000
Merchandise inventory 125,000
Purchases 1500,000
Paid up capital 1800,000
Transportation 20,000
Salaries expense 120,000
Sales 1830,000
Building 1800,000
Auditor’s fee 70,000
Furniture 50,000
Retained earnings 225,000
Fire insurance 10,000
Utility expenses 30,000
4000,000 4000,000

Additional information:
1. Merchandise Inventory ending Rs.140,000
2. Provide depreciation on furniture 20% and building at 2%.
3. Income tax 40%

Required:
a) Income Statement
b) Balance Sheet