Page 211 - DMGT104_FINANCIAL_ACCOUNTING

Unit 9: Analysis and Interpretation of Financial Statements

Notes
31 st March
Particulars 2006 2007
( ) ( )
Assets
Cash in Hand 10,000 14,000
Cash at Bank 14,000 18,000
Book Debts 24,000 22,000
Inventory 8,000 6,000
Bills Receivable 4,000 3,000
Prepaid Expenses 400 600
Short-term Investment 10,000 16,000
Accrued Interest 2,000 1,200
Building 40,000 44,000
Plant and Machinery 18,000 12,000
1,30,400 1,36,800
Liabilities
Accounts Payable 16,000 12,000
Notes Payable 6,000 4,000
Bank Overdraft 8,000 6,000
Outstanding Expenses 600 400
Provision for Bad Debts 1,000 1,400
Share Capital 40,000 40,000
Debentures 40,000 60,000
Mortgage Loan 18,800 13,000
1,30,400 1,36,800

Solution:
Schedule Of Changes In Working Capital
31 st March 31 st March Charges in Working Capital
2006 2007
Particulars Increase Decrease
(Debit) (Credit)
( ) ( ) ( ) ( )
Current Assets
Cash in Hand 10,000 14,000 4,000 -
Book Debts 24,000 22,000 - 2,000
Cash at Bank 14,000 18,000 4,000 -
Inventory 8,000 6,000 - 2,000
B/R 4,000 3,000 - 1,000
Prepaid Expenses 400 600 200 -
Short-term Investments 10,000 16,000 6,000 -
Accured Interest 2,000 1,200 - 800
Total Current Assets 72,400 80,800

Current Liabilities
Contd...
Account Payable 16,000 12,000 4,000 -
Notes Payable 6,000 4,000 2,000 -
Bank Overdraft 8,000 6,000 2,000 -
Outstanding Expenses 600 400 200 -
1,000
1,400
-
Provision for Bed Debts LOVELY PROFESSIONAL UNIVERSITY 400 205
Total of Current Liabilities 31,600 23,800
Working Capital
(Current Assets – Current Liabilities) 40,800 57,000 - 16,200
Net Increase in Working Capital 16,200 - - -
57,000 57,000 22,400 22,400