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Session 7 - in Class 2

1) The company raised Rs. 100 in equity, took short term borrowings of Rs. 30 and long term borrowings of Rs. 20. It purchased assets costing Rs. 60 and earned revenue of Rs. 90 from sales. 2) As of March 31, 2020 the company had total assets of Rs. 252.67 consisting of current assets of Rs. 177 and non-current assets of Rs. 75.67. 3) It had total liabilities and equity of Rs. 252.67 comprising current liabilities of Rs. 77, non-current liabilities of Rs. 20 and total equity of Rs. 120.

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IIT IIM Anubhav Anubhav
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14 views

Session 7 - in Class 2

1) The company raised Rs. 100 in equity, took short term borrowings of Rs. 30 and long term borrowings of Rs. 20. It purchased assets costing Rs. 60 and earned revenue of Rs. 90 from sales. 2) As of March 31, 2020 the company had total assets of Rs. 252.67 consisting of current assets of Rs. 177 and non-current assets of Rs. 75.67. 3) It had total liabilities and equity of Rs. 252.67 comprising current liabilities of Rs. 77, non-current liabilities of Rs. 20 and total equity of Rs. 120.

Uploaded by

IIT IIM Anubhav Anubhav
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as XLSX, PDF, TXT or read online on Scribd
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ABC Office Stationary Trading Co.

Sr. No.Transactions during the year eding 31 March 2020 Cash & Ba ReceivabPrepaid Ex
1 Issue of equity for cash 100 100
2 S.T. borrowings 30 30
3 Purchase of goods on credit Rs 40
4 Purchase of goods on cash Rs 20 -20
5 L.T borrowings 20 20
6 Goods sold on cash for Rs 50 whose cost was Rs 25 50
7 Goods sold on credit for Rs 40 whose cost was Rs 22 40
8 Advance collection from customers for service to be delivered i 30
9 Purchase of computers on 1/4/2019 for Rs 50 cash -50
10 Purchase of software for office use on 1/4/19 for Rs 10 cash -10
11 Rent paid Rs 12 for 24 months @0.5 per month on 1/4/19 -12 6
12 Salaries paid Rs 8 and salaries outstnading 5 -8
13 Provision for employees' leave encashment in next year Rs 2
14 Issue of equity for land Rs 20
15 Land cost of Rs 3 sold for Rs 7 cash. 7
16 Interest paid Rs 4 -4
17 Income tax paid Rs 4 -4
18 Dividend Paid Rs 2 -2

Adjustments:
a. The estimated life of coputers is 6 years for depreciation
b. The legal life of software is perpetual (5 years)

Net Balances 127 40 6

Balance Sheet of ABC Office Trading Co. as on 31 March 2020


Assets
Current Assets
Cash and Bank 127
Receivables 40
Prepaid Expenses 6
Inventory 13
Non-current Assets:
PPE 40
Land 17
Intangible Assets 9

Total Assets 252

Liabilities and Equity:


Current liabilites:
Payables 40
Outstanding expenses 5
Deferred Revenue 30
Provision (Current) 2
Borrowings (Current) 30
Non-current liabilities:
Borrowings (non-current) 20
Equity:
Capital 120
Other Equity 5.67

Total Liaiblities and Equity 252.67

Income Statement of ABC Office Trading Co. for the year ended 31st March 2020

Income
Operating Revenue
Other Income
Total Income 0

Expenses:
COGS
Rent
Salaries
Provision
Interest
Income tax 1
Depreciation
Amortization
Total expenses 0 2

Profit 0 3
Dividend
Other Equity of Current Year or Ret Earnings of Current Year 0 4

5
Inventory PPE Land Intangible AssPayables OutstandinDeferred RProvision (S.T.Borrow

30
40 40
20

-25
-22
30
50
10

5
2
20
-3

-8.33
-2

13 41.67 17 8 40 5 30 2 30
252.67 252.67
Income Statement of ABC Office Trading Co. for the year ended 31st March 2020

Income
Operating Reve 90
Other Income 4
Total Income 94
Q1: Operating Profit with PAT?
Expenses: PAT+Tax+Int-Other Income
COGS -47
Rent -6 Q2: Op Profit with PBIT?
Salaries -13
Provision -2 Q3: EBITDA with PAT?
Total Expenses -68
EBITDA 26 Q4:EBITDA with EBIT?
Depreication -8.33
Amortization -2
EBIT or PBIT 15.67
Interest exp or Fin Cost -4
EBT or PBT 11.67
Tax Exp -4
PAT or Net Income 7.67

Operating Profit Operating Rev - Ope Exp


11.67
LT. BorrowCapital Other Equity
100

20
25
18

-6
-13
-2
20
4
-4
-4
-2

-8.33
-2

20 120 5.67
ABC Office Stationary Trading Co.
Sr. NoTransactions during the year eding 31 March 202 Cash & BReceivabPrepaid Exp
1 Issue of equity for cash 100 100
2 S.T. borrowings 30 30
3 Purchase of goods on credit Rs 40
4 Purchase of goods on cash Rs 20 -20
5 L.T borrowings 20 20
6 Goods sold on cash for Rs 50 whose cost was Rs 2 50

7 Goods sold on credit for Rs 40 whose cost was Rs 22 40

8 Advance collection from customers for service to 30


9 Purchase of computers on 1/4/2019 for Rs 50 cas -50
10 Purchase of software for office use on 1/4/19 for -10
11 Rent paid Rs 12 for 24 months @0.5 per month o -12 6
12 Salaries paid Rs 8 and salaries outstnading 5 -8
13 Provision for employees' leave encashment in next year Rs 2
14 Issue of equity for land Rs 20
15 Land cost of Rs 3 sold for Rs 7 cash. 7
16 Interest paid Rs 4 -4
17 Income tax paid Rs 4 -4
18 Dividend Paid Rs 2 -2

Adjustments:
a. The estimated life of coputers is 5 years for depreciation
b. The legal life of software is perpetual (5 years)

Net Balances 127 40 6

Balance Sheet of ABC Office Trading Co. as on 31 March 2020


Assets
Current Assets
Cash and Bank
Receivables
Prepaid Expenses
Inventory
Non-current Assets:
PPE
Land
Intangible Assets

Total Assets 0

Liabilities and Equity:


Current liabilites:
Payables
Outstanding expenses
Deferred Revenue
Provision (Current)
Borrowings (Current)
Non-current liabilities:
Borrowings (non-current)
Equity:
Capital
Other Equity

Total Liaiblities and Equity 0

Income Statement of ABC Office Trading Co. for the year ended 31st March 202

Income
Operating Revenue
Other Income
Total Income 0

Expenses:
Material expnses
Rent
Salaries
Provision
Interest
Income tax 1
Depreciation
Amortization
Total expenses 0 2

Profit 0 3
Dividend
Other Equity of Current Year or Ret Earnings of Cu 0 4

5
Inventory PPE Land Intangible Payableso/s Exp

40 40
20

-25

-22

50
10

20
-3

-10
-2

13 40 17 8 40 5
251 251
Income Statement of ABC Office Trading Co. for the year ended 31st March 2020

Income
Operating Reve
Other Income
Total Income

Expenses:
Material exp
Rent
Salaries
Provision
Total Expenses
EBITDA 0
Depreication
Amortization
EBIT or PBIT 0
Interest exp or Fin Cost
EBT or PBT 0
Tax Exp
PAT or Net Income 0

Operating Profit Operating Rev - Ope Exp


0
Rev-Exp
Def Rev Prov (ST)S.T.BorroLT. Borr Equity COther Equity
100
30

20
50
-25
40
-22
30

-6
-13
2 -2
20
4
-4
-4
-2

-10
-2

30 2 30 20 120 4
March 2020
ABC Office Stationary Trading Co.
Sr. NoTransactions during the year eding 31 March 202 Cash & BReceivaPrepaid Ex
1 Issue of equity for cash 100 100
2 S.T. borrowings 30 30
3 Purchase of goods on credit Rs 40
4 Purchase of goods on cash Rs 20 -20
5 L.T borrowings 20 20
6 Goods sold on cash for Rs 50 whose cost was Rs 2 50

7 Goods sold on credit for Rs 40 whose cost was Rs 22 40

8 Advance collection from customers for service to 30


9 Purchase of computers on 1/4/2019 for Rs 50 cas -50
10 Purchase of software for office use on 1/4/19 for -10
11 Rent paid Rs 12 for 24 months @0.5 per month o -12 6
12 Salaries paid Rs 8 and salaries outstnading 5 -8
13 Provision for employees' leave encashment in next year Rs 2
14 Issue of equity for land Rs 20
15 Land cost of Rs 3 sold for Rs 7 cash. 7
16 Interest paid Rs 4 -4
17 Income tax paid Rs 4 -4
18 Dividend Paid Rs 2 -2

Adjustments:
a. The estimated life of coputers is 5 years for depreciation
b. The legal life of software is perpetual (5 years)

Net Balances 127 40 6


Balance Sheet of ABC Office Trading Co. as on 31 March 2020
Assets
Current Assets
Cash and Bank
Receivables
Prepaid Expenses
Inventory
Non-current Assets:
PPE
Land
Intangible Assets

Total Assets 0

Liabilities and Equity:


Current liabilites:
Payables
Outstanding expenses
Deferred Revenue
Provision (Current)
Borrowings (Current)
Non-current liabilities:
Borrowings (non-current)
Equity:
Capital
Other Equity

Total Liaiblities and Equity 0

Income Statement of ABC Office Trading Co. for the year ended 31st March

Income
Operating Revenue
Other Income
Total Income 0
Expenses:
Material expnses
Rent
Salaries
Provision
Interest
Income tax 1
Depreciation
Amortization
Total expenses 0 2

Profit 0 3
Dividend
Other Equity of Current Year or Ret Earnings of C 0 4

5
Inventory PPE Land Intangible Payableso/s Exp Def Rev

40 40
20

-25

-22
30
50
10

20
-3

-10
-2

13 40 17 8 40 5 30
251 251
Income Statement of ABC Office Trading Co. for the year ended 31st March 2020

Income
Operating Reve
Other Income
Total Income
Expenses:
Material exp
Rent
Salaries
Provision
Total Expenses
EBITDA 0
Depreication
Amortization
EBIT or PBIT 0
Interest exp or Fin Cost
EBT or PBT 0
Tax Exp
PAT or Net Income 0

Operating Profit Operating Rev - Ope Exp


0
Prov (ST)S.T.BorroLT. Borr Equity CapOther Equity
100
30

20
50
-25
40
-22

-6
-13
2 -2
20
4
-4
-4
-2

-10
-2

2 30 20 120 4

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