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Assignment

Mr. Abhay invested ₹15,00,000 in his electronics business. He purchased goods for ₹10,00,000 and spent ₹2,00,000 on furnishings and ₹35,000 on a computer. He sold goods for ₹7,00,000 in cash and ₹3,10,000 on credit. Some goods sold on credit were returned. Mr. Abhay then expanded into home appliances, purchasing ₹8,00,000 in goods, of which ₹2,00,000 were on credit. Some inventory was destroyed by an earthquake. Accounts receivable total ₹3,00,000 and accounts

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61 views2 pages

Assignment

Mr. Abhay invested ₹15,00,000 in his electronics business. He purchased goods for ₹10,00,000 and spent ₹2,00,000 on furnishings and ₹35,000 on a computer. He sold goods for ₹7,00,000 in cash and ₹3,10,000 on credit. Some goods sold on credit were returned. Mr. Abhay then expanded into home appliances, purchasing ₹8,00,000 in goods, of which ₹2,00,000 were on credit. Some inventory was destroyed by an earthquake. Accounts receivable total ₹3,00,000 and accounts

Uploaded by

shruthin
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PDF, TXT or read online on Scribd
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Financial Accounting | Assignment 1 | Accounting Terms | Dr.

GK
1. Mr. Abhay commenced business of trading in electronic goods with an initial capital
of ₹ 15,00,000. Out of the said ₹ 15,00,000, he paid ₹ 10,00,000 towards purchase of
electronic goods. He further spent ₹ 2,00,000 on furnishing the shop and ₹ 35,000 for
the purchase of computer and printer. ₹ 10,000 is yet to be paid to the supplier of
computer.
He sold goods costing ₹ 5,00,000 for ₹ 7,00,000 in cash and goods costing ₹ 2,50,000
for ₹ 3,10,000 on credit. Goods sold on credit for ₹ 25,000 were returned being
defective. These goods (costing ₹ 20,000)were returned to the supplier. Looking into
the response, he decided to trade in home appliances also and further invested ₹
5,00,000.
He purchased electronic goods and home appliances for ₹ 8,00,000 out of which
purchases of ₹ 2,00,000 were on credit. Due to an earthquake, 2 LCD Televisions
costing ₹ 50,000 were completely destroyed. Mr. Abhay received an insurance claim
of ₹ 30,000.
A customer purchased goods costing ₹ 2,25,000 for ₹ 3,00,000 and was allowed
discount of ₹ 15,000. He was further allowed discount of ₹5,000 for payment within
agreed time.
He paid salary to Devi of ₹ 55,000; ₹ 5000 were to be paid. He insured the goods and
paid insurance premium of ₹ 10,000.Out of this, ₹ 5,000 are for the next year. Mr.
Abhay withdrew ₹ 30,000 during the year for his personal use.

You are required to answer the following questions on the basis of the above:
i. What is the amount of the capital invested in the business by Mr. Abhay?
(Exclude drawings)
ii. What is the amount invested by Mr. Abhay in fixed assets?
iii. What is the amount of total purchases (Not net purchases) ?
iv. What is the amount of long-term liabilities?
v. What is the amount of current liabilities?
vi. What is the amount of prepaid expenses?
vii. What is the amount of outstanding expenses?
viii. What is the amount due from debtors?
ix. What is the amount due to creditors?
x. What is the value of the closing stock?
xi. What is the value of net purchases?
xii. What is the amount of trade discount allowed?
xiii. Has Mr. Abhay allowed cash discount? If yes, what is the amount?
xiv. What is the amount of drawings?
xv. What is the amount of sales returns?
xvi. What is the amount of purchase returns?

2. Mr. Alfaaz started business for buying and selling of readymade garments with ₹
8,00,000 as an initial investment. Out of this he paid ₹ 4,00,000 for the purchase of
garments and ₹ 50,000 for furniture and ₹ 50,000 for computers and the remaining
amount was deposited in the bank. He sold some of the ladies and kids garments for ₹
3,00,000 for cash and some garments for ₹ 1,50,000 on credit to Mr. Rajesh.
Subsequently, he brought men’s garments of ₹ 2,00,000 from Mr. Satish. In the first
week of next month, a fire broke out in his office and stock of garments worth ₹
1,00,000 was destroyed. Later on, some garments which cost ₹ 1,20,000 were sold for
₹ 1,30,000. Expenses paid during the same period were ₹ 15,000. Mr. Alfaaz
withdrew ₹ 20,000 from the business for his domestic use.
From the above, answer the following:
i. What is the amount of capital with which Mr. Alfaaz started the business?
ii. What fixed assets did he buy?
iii. What is the value of the goods purchased?
iv. Who is the creditor and state the amount payable to him?
v. Who is the debtor and state the amount payable from him?
vi. What is the total amount of expenses?
vii. What is the amount of drawings of Mr. Alfaaz?

***

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