Page 35 - DCOM409_CONTEMPORARY_ACCOUNTING

Contemporary Accounting

Notes loss"(3)-(4) 1,60,000 1,57,508
General price-level loss
(see statement below) 4,800
Net profit after general price
level loss 1,52,708
Less: Income tax 70,000 1.040 72,800
Net Profit 90,000 79,908
Less: Dividend paid 40,000 1.000 40,000
Retained earnings at the end of 2008 50,000 39,908
Computation of General Price-Level Gain or Loss
For the year ending 31st Dec., 2008

(`) (`) (`)
Net monetary items as on 1-1-2008
Cash and Receivables 2,00,000
Less: Current Liabilities 80,000
Long-term Liabilities 1,00,000 1,80,000
20,000 1.092 21,840
Add: Source of Net monetary
items during 2008:
Sales 8,00,000 1.040 8,32,000
Total Sources (1) 8,20,000 8,53,840
Uses of net monetary items during 2008
Purchases 5,00,000 1.040 5,20,000
Operating expenses 96,000 1.040 99,840
(excluding depreciation)
Income tax 70,000 1.040 72,800
Dividends paid 40,000 1.000 40,000
Purchases of equipments 60,000 1.040 62,400
Total Uses (2) 7,66,000 7,95,040
Net monetary items as should
have been if there were no general
Price level gain or loss (l)-(2) 58,800
Net monetary items actually
existing as on 31st Dec., 2008
Cash and Receivables 2,60,000
Less: Current Liabilities 90,000
Long-term Liabilities 1,16,000 2,06,000 54,000
General price-level loss
during 2008
(58,800-54,000) 4,800

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