Analysing Comparative Balance Sheet

Q.

Accounting provides information on:

1. Cost and income for managers

2. Companys tax liability for a particular year

3. Financial conditions of an institutions

4. All of the above

Q.

State the importance of Financial Analysis?

Q.

State the Primary Objective of Preparing a Cash Flow Statement

Q.

The following is the statement of Profit and Loss of Yamuna Limited for the year ended March 31, 2017:
$$\begin{array}{ccc}\text{Particulars}& \text{Note}& \text{Amount}\\ & \text{No.}& \\ \text{I. Revenue From Opeerations (Sales)}& & \underset{–}{10,00,000}\\ \text{II. Expenses:}& & \\ \text{Purchases}& & 5,00,000\\ \text{Changes in Inventories (Opening Inventory - Closing Inventory)}& & \\ (2,50,000-2,00,000)& & 50,000\\ \text{Other Expenses}& & \underset{–}{3,00,000}\\ \text{Total Expenses}& & \underset{–}{8,50,000}\\ \text{III. Profit Before Tax (I-II)}& & 1,50,000\end{array}$$

Additional Information:
(1) Trade Receivables decrease by Rs. 30, 000 during the year.
(2) Prepaid expenses increase by Rs. 5, 000 during the year.
(3) Trade payables decrease by Rs. 15, 000 during the year.
(4) Outstanding expenses increased by Rs. 3, 000 during the year.
(5) Operating expenses included depreciation of Rs. 25, 000.

Compute net cash provided by operations for the year ended March 31, 2017 by the indirect method.

Q.

The following is the receipts and payments account of Appollo Hospital, for the year ended 31st March, 2015 :

Receipts and Payments
$\begin{array}{cccc}\text{Receipts}& \text{Rs}& \text{Payments}& \text{Rs}\\ \text{Balance b/d}& 8,500& \text{Payment for medicines}& 33,000\\ \text{Subscriptions}& 48,000& \text{Fees to Doctors}& 24,000\\ \text{Donations}& 15,000& \text{Salaries}& 27,000\\ \text{Interest on Investments}& & \text{Equipment Purchased}& 15,000\\ \text{at}9\%\text{p.a. for the year}& 9,000& \text{Charity show expenses}& 4,000\\ \text{Proceeds from Charity show}& 12,000& \text{Sundry Expenses}& 1,200\\ \text{Grant in aid}& 20,000& \text{Balance c/d}& 8,300\\ & \underset{–}{\overline{1,12,500}}& & \underset{–}{\overline{1,12,500}}\end{array}$

Other Information :

1-4-2014 31-3-2015

Rs Rs

(a) Subscriptions due 500 1, 000

(b) Subscriptions received in Advance 1, 000 500

(c) Stock of Medicines 10, 000 15, 000

(d) Amount due to medicine suppliers 8, 000 12, 000

(e) Value of Equipments 25, 000 33, 000

(f) Value of Buildings 70, 000 65, 000

You are required to prepare : -

(i) Income and Expenditure Account for the year ended 31st March, 2015, and

(ii) Balance Sheet as at that date.

Q.

What are drawings in financial statements?

Q.

A financial statement to show what a business owns and owes at a particular point in time -

1. A cash flow statement

2. The bank statement for the business

3. A balance sheet

4. A statement of retained earnings

Q.

Following is the Balance Sheet of Jain, Gupta and Malik as on March 31, 2002.

$\text{Balance Sheet}$
$\text{as on March 31, 2007}$
$\begin{array}{cccc}\text{Capital and Liabilities}& \text{Amt. (Rs)}& \text{Assets}& \text{Amt. (Rs)}\\ \text{Sundry Creditors}& 19,800& \text{Land and Building}& 26,000\\ \text{Telephone Bills}& 300& \text{Bonds}& 14,370\\ \text{Outstanding}& 8,950& \text{Cash}& 5,500\\ \text{Accounts Payable}& & \text{Bills Receivable}& 23,450\\ \text{Accumulated Profits}& 16,750& \text{Sundry Debtors}& 26,700\\ \text{Capital}& & \text{Stock}& 18,100\\ \text{Jain}40,000& & \text{Office Furniture}& 18,250\\ \text{Gupta}60,000& & \text{Plant and Machinery}& 20,230\\ \text{Malik}\underset{–}{20,000}& 1,20,000& \text{Computers}& 13,200\\ & \overline{\underset{–}{\underset{–}{1,65,800}}}& & \overline{\underset{–}{\underset{–}{1,65,800}}}\end{array}$

The partners have been sharing profits in the ratio of 5 : 3 : 2. Malik decides to retire from business on April 1, 2002 an d his share in the business is to be calculated as per the following terms of revaluation of assets and liabilities : Stock, Rs. 20, 000; office furniture, Rs. 14, 250; plant and machinery Rs. 23, 530; land and building Rs. 20, 000; A provision of Rs. 1, 700 to be created for doubtful debts. The goodwill of the firm is valued at Rs. 9, 000.

The continuing partners agreed to pay Rs. 16, 500 as cash on retirement of Malik, to be contributed by continuing partners in the ratio of 3:2. The balance in the capital account of Malik will be treated as loan. Prepare revaluation account, capital accounts and balance sheet of the reconstituted firm.

Q.

What are the three types of activities in a cash flow statement?

Q.

From the following Balance Sheet of Akshya Ltd. as on 31-3-2012 and 31-3-2013, prepare a Cash Flow Statement.
$\begin{array}{ccccc}& \text{Particulars}& \text{Note}& 31-3-2013& 31-3-2012\\ & & \text{No.}& \text{(Rs)}& \text{(Rs)}\\ \text{I.}& \text{Equity and Liabilities}& & & \\ & \left(1\right)\text{Shareholders' Funds}& & & \\ & \text{(a) Share Capital}& & 65,000& 45,000\\ & \text{(b) Reserve and Surplus}& 1& 42,500& 24,000\\ & \left(2\right)\text{Current Liabilities}& & & \\ & \text{Trade Payables (Creditors)}& & 11,000& 8,700\\ & \text{Total}& & 1,18,500& 77,700\\ \text{II.}& \text{Assets}& & & \\ & \left(1\right)\text{Non-current Assets}& & & \\ & \text{(a) Fixed Assets}& & 83,000& 46,700\\ & \left(2\right)\text{Current Assets}& & & \\ & \text{(a) Inventories (Stock)}& & 13,000& 11,000\\ & \text{(b) Trade Receivables (Debtors)}& & 19,500& 18,000\\ & \text{(c) Cash and Cash Equivalents (Cash)}& & 3,000& 2,000\\ & \text{Total}& & 1,18,500& 77,700\end{array}$

Notes to Accounts :
$\begin{array}{ccccc}\text{Note}& \text{Particulars}& & \text{31st March, 2013}& \text{31st March, 2012}\\ \text{No.}& & & \text{(Rs)}& \text{(Rs)}\\ \text{1}& \text{Reserves and Surplus}& & & \\ & \text{General Reserves}& & 27,500& 15,000\\ & \text{Balance in Statement of Profit and Loss}& & 15,000& 10,000\\ & \text{Preliminary Expenses}& & \underset{–}{}& (1,000)\\ & \text{Total}& & 42,500& 24,000\end{array}$

Additional Information :

(i) Depreciation on Fixed Assets for the year 2012-13 was Rs 14, 700.

(ii) An interim dividend Rs 7, 000 has been paid to the shareholders during the year.

Q. What is a cash flow statement?

Q. Delhi Youth Club has furniture at a value of ₹ 2, 20, 000 in its book on 31st March, 2017. It sold old furniture , having book value of ₹ 20, 000 as at 1st April , 2017 at a loss of 20% on 31st December, 2017 . Furniture is to be depreciated @ 10% p.a. Furniture costing ₹ 1, 50, 000 was also purchased on 1st October, 2017.
Prepare Furniture Account for the year ended 31st March, 2018.

Q. Which of the following errors will not affect the Trial Balance?

1. Omission of an account from Trial Balance
2. Wrong recording in the Journal proper but not posted at all
3. None of the above
4. Entering the balance of an account in the wrong amount column of the Trial Balance
5. Wrong Totaling of the Trial Balance

Q. What is a Trial Balance?

Q.

What do you mean by a balance of payments?

Q.

What is on a cash flow statement?

Q.

What are BOP and its components?

Q. Explain the limitations of financial statements.

Q. Cash column of cash book can never have _______ balance.

1. Credit
2. Debit
3. Zero
4. None of the above

Q. Select the most appropriate alternative from those given below and rewrite the statement.

A statement showing financial position of the business is called as _________________.
a) balance sheet
b) trial balance
c) capital
d) trading A/c

Q. Which of the following errors will not affect the Trial Balance ?

1. Wrong recording in the journal proper but not posted at all
2. Omission of an count from Trial Balance
3. Entering the balance of an account in the wrong amount column at the trial Balance
4. Wrong Totalling of the trial balancing

Q. If the amount of subscription received is not refunded within $120$ days from the date of issue of prospectus the directors are responsible to refund the money along with the interest @ ______ % interest after days _________.

1. $8$%, $120$
2. $6$%, $130$
3. $9$%, $110$
4. $5$%, $130$

Q. Objective type questions :-
Answer in one sentence only.

What is Balance Sheet?

Q. If the trial balance do not agree after transferring the balance of ledger accounts including cash and bank balance and also errors are not located timely, then the trial balance is tallied by transferring the difference of debit and credit side to an account known as -

1. Capital Account
2. Memorandum Account
3. Suspense Account
4. Drawing Account

Q.

Refer tha data in the table below:

$\begin{array}{ccc}\text{Particulars}& 2004-05& 2005-06\\ \text{Shareholders' funds}& 10,00,000& 10,00,000\\ \text{Trade payables}& 2,40,000& 1,80,000\\ \text{Short term debt}& 8,00,000& 6,00,000\\ \text{Long term debt}& 9,02,000& 7,74,000\\ & 29,42,000& 25,54,000\\ \text{Fixed Assets}& 26,20,000& 22,50,000\\ \text{Trade Receivables}& 2,50,000& 2,75,000\\ \text{Cash}& 72,000& 29,000\\ & 29,42,000& 25,54,000\end{array}$

Calculate the % change in long term debt.

1. None of these

2. Decrease of 10.19 %

3. Decrease of 14.19%

4. Decrease of 60.20%

Q. Original cost = Rs. 1, 36, 000; Salvage value = 10, 000, Useful life= 6 years. Depreciation for the fourth year under Sum of years' Digits method will be ______.

1. Rs. 6, 000
2. Rs. 12, 000
3. Rs. 18, 000
4. Rs. 24, 000

Q.

Refer the data in the table below:

$\begin{array}{ccc}\text{Particulars}& 2004-05& 2005-06\\ \text{Shareholders' funds}& 10,00,000& 10,00,000\\ \text{Trade payables}& 2,40,000& 1,80,000\\ \text{Short term debt}& 8,00,000& 6,00,000\\ \text{Long term debt}& 9,02,000& 7,74,000\\ & 29,42,000& 25,54,000\\ \text{Fixed Assets}& 26,20,000& 22,50,000\\ \text{Trade Receivables}& 2,50,000& 2,75,000\\ \text{Cash}& 72,000& 29,000\\ & 29,42,000& 25,54,000\end{array}$

Calculate the absolute change in cash?

1. -72000

2. -43000

3. -60000

4. None of these

Q. Double column cash book records transaction relating to __________ and ___________.

1. Purchase, Sales
2. Purchase, Return
3. Cash, Credit
4. Cash, Bank

Q.

What Are the Four Limitations of Financial Statements?

Q.

Refer the data in the table below:

$\begin{array}{ccc}\text{Particulars}& 2004-05& 2005-06\\ \text{Shareholders' funds}& 10,00,000& 10,00,000\\ \text{Trade payables}& 2,40,000& 1,80,000\\ \text{Short term debt}& 8,00,000& 6,00,000\\ \text{Long term debt}& 9,02,000& 7,74,000\\ & 29,42,000& 25,54,000\\ \text{Fixed Assets}& 26,20,000& 22,50,000\\ \text{Trade Receivables}& 2,50,000& 2,75,000\\ \text{Cash}& 72,000& 29,000\\ & 29,42,000& 25,54,000\end{array}$

Calculate the absolute change in trade payables.

1. -100000

2. 100000

3. -60000

4. None of these