Page 221 - DMGT202_COST_AND_MANAGEMENT_ACCOUNTING

Cost and Management Accounting

Notes The next non-current account is that non-current liability which is nothing but Share capital

Dr Share Capital A/c Cr
Particulars ` ` Particulars ` `
To Balance c/d 8,00,000 By Cash (Issue of shares) 1,00,000
By General reserve 1,00,000
By Balance b/d 6,00,000
8,00,000 8,00,000
And another non-current account is to be prepared that general reserve account.
Dr General Reserve A/c Cr

Particulars ` ` Particulars ` `
To Share capital 1,00,000 By Balance b/d 2,00,000
To Balance c/d 1,00,000
2,00,000 2,00,000
The next step is to prepare the Adjusted Profit & Loss A/c.

Dr Adjusted Profit & Loss A/c Cr
Particulars ` ` Particulars ` `
To (Fixed Assets ) By Balance b/d (Retained Earnings) 60,000
depreciation 30,000
To Balance c/d 1,20,000 By Fund from operation Balancing fi g.. 90,000
1,50,000 1,50,000

The next step is to prepare the fund flow statement of the enterprise.
Fund Flow Statement

Sources ` ` Applications ` `
Issue of Shares 1,00,000 Purchase of Land 70,000
Funds from operation 90,000 Increase in working capital 1,20,000
1,90,000 1,90,000

Example: Balance sheets of M/s Black and White as on 1-1-2006 and 31-12-2006 were as
follows:

Balance sheet

Liabilities 1-1-2006 ` 31-12-2006 ` Assets 1-1-2006 ` 31-12-2006 `
Creditors 40,000 44,000 Cash 10,000 7,000
Mrs. Whites’ Loan 25,000 - Debtors 30,000 50,000
Loan from P.N. Bank 40,000 50,000 Stock 35,000 25,000
Capital 1,25,000 1,53,000 Machinery 80,000 55,000
Land 40,000 50,000
Building 35,000 60,000
2,30,000 2,47,000 2,30,000 2,47,000

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