MGT101 Assignment 1 Solution and Discussion

[zareen]

SEMESTER FALL 2019
FINANCIAL ACCOUNTING (MGT101)
ASSIGNMENT # 01
DUE DATE: 13th November 2019 MARKS: 10
TOPIC TO BE TESTED:
Basic understanding required for the preparation of financial statements.
LEARNING OBJECTIVES:
To understand the heads/terminologies used in the preparation of financial statements.
QUESTION
Following information is extracted from the

Particulars	Rs.	Particulars	Rs.
Advertising expenses	65,000	Amount earned on sale of goods	121,000
Carriage/Transportation paid on sale of goods	160,000	Amount earned by rendering services	840,000
Purchases	550,000	Total Liabilities	10,30,000
Carriage/Transportation paid on purchases	50,000	Copy rights	250,000
Rent of office building	278,222	Goodwill	150,000
Taxes paid	20,364	Furniture and Fixtures	170,000
Mark up on loan	15,228	Plant & Machinery	750,000
Salaries paid to employees	16,369	Land and Building	777,000
Bank charges	29,367	Cash in hand	150,000
Other financial charges	17,268	Total Assets	2,240,000

Note: There is no opening and closing stock of inventory

Required:
Based on the above information of ABC Business, you are required to calculate the amount of:

1. Intangible Assets
2. Equity
3. Total Income/Revenue
4. Selling Expenses
5. Cost of goods sold

IMPORTANT:
Grace period of extra 24 hours after the due date is usually available to overcome uploading difficulties. This extra time should only be used to meet the emergencies and above mentioned due dates should always be treated as final to avoid any inconvenience.
IMPORTANT INSTRUCTIONS
 Take help from internet for collecting the information.
 Carefully watch relevant lectures and consult the relevant material
from handouts along with recommended books.
 Attempt the assignment by yourself and it will be entertained positively.
OTHER IMPORTANT INSTRUCTIONS: DEADLINE:
 Make sure to upload the solution file before the due date on VULMS.
 Any submission made via email after the due date will not be
accepted.
FORMATTING GUIDELINES:
 Use the font style “Times New Roman” or “Arial” and font size “12”.
 It is advised to compose your document in MS-Word format.
 You may also compose your assignment in Open Office format.
 Use black and blue font colors only.
RULES FOR MARKING
Please note that your assignment will not be graded or graded as Zero (0), if:
 It is submitted after the due date.
 The file you uploaded does not open or is corrupt.
 It is in any format other than MS-Word or Open Office; e.g. Excel, PowerPoint, PDF etc.
 It is cheated or copied from other students, internet, books, journals etc.

 Note related to load shedding: Please be proactive

Dear students!
As you know that Pre Mid-Term semester activities have been started and load shedding problem is also prevailing in our country now a days. Keeping in view the fact, you all are advised to post your activities as early as possible without waiting for the due date. For your convenience; activity schedule has already been uploaded on VULMS for the current semester, therefore no excuse will be entertained after due date of assignments, quizzes or GDBs.

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Solution:
1. Intangible Assets

Particulars	Rs.	Rs.
Goodwill	150,000
Copy rights	250,000	400,000

2. Equity

Particulars	Rs.	Rs.
Total Assets	2,240,000
Less: Total Liabilities	1,030,000	1,210,000

3. Total Income/Total Revenue

Particulars	Rs.	Rs.
Amount earned on sale of goods	121,000
Amount earned by rendering services	840,000	961,000

4. Selling Expenses

Particulars	Rs.	Rs.
Advertising expenses	65,000
Carriage/Transportation paid on sale of goods	160,000	225,000

5. Cost of Goods Sold

Particulars	Rs.	Rs.
Purchases	550,000
Carriage/Transportation paid on purchase	50,000	600,000

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