Page 87 - DCOM302_MANAGEMENT_ACCOUNTING

Management Accounting

Notes Less: Refund of Tax 6,000

Profit on Sale of Building 10,000
Dividend Received 10,000
Fund from Operations 96,000
Second Method:

Adjusted Profit & Loss A/c

To Depreciation on Plant 10,000 By Opening Balance b/d 50,000
To Provision for Taxation 8,000 By Profit on Sale of Building 10,000

To Loss on Sale of Plant 4,000 By Dividend Received 10,000
To Discount on issue of debentures 4,000 By Refund of Tax 6,000
To Provision for bad debts 2,000 By Balancing Figure 96,000
To Transfer to general reserve 2,000 Fund from Operations
To Preliminary expenses off 6,000
To Goodwill written off 4,000
To Proposed Dividend 12,000
To Closing Profi t c/d 1,20,000
1,72,000 1,72,000

Task Discuss any non-current account transactions affecting the fund position of a fi rm
of your choice..

Self Assessment

Choose the appropriate answer
7. Adjusted profit and loss account is prepared for

(a) Determining the fund from operations
(b) Determining the fund lost in operations
(c) Either (a) or (b)
(d) None of the above

8. Fund flow statement is categorized into two parts

(a) Fund inflow and Fund outfl ow
(b) Cash inflow and Cash outfl ow

(c) Sources and Applications
(d) None of the above
9. Fund from operations is

(a) Sources of the fi rm
(b) Applications of the fi rm

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