Page 229 - DMGT202_COST_AND_MANAGEMENT_ACCOUNTING

Cost and Management Accounting

Notes
Liabilities 31.12.07 31.12.08 Assets 31.1 2.07 31.12.08
(`) (`) (`)
Capital 4,80,000 5,10,000 Cash at Bank 24,000 54,000
Profit & Loss a/c 8,50,000 10,50,000 Debtors 9,90,000 11,90,000

Creditors 54,000 30,000 Stock 54,000 42,000
Mortgage Loans 28,000 1,00,000 Land 2,00,000 2,00,000
Plant 1,44,000 2,04,000
14,12,000 16,90,000 14,12,000 16,90,0
9. The following is the abstract of balance sheet of Software securities Ltd. for the year 2005
and 2006

Liabilities 2005 2006 Assets 2005 2006
(`) (`) (`) (`)
Provision for 108000 396000 Land 26000 81000
depreciation
Retained earning 244800 370800 Building 60000 360000
9% Debenture 270000 198000 Accumulated 19800 37800
depreciation on building
Account payable 72000 41400 Equipment 122400 347400
Expense payable 0 18000 Accumulated 18000 50400
depreciation on
Equipment
Stock in hand 10800 97200
Account receivable 36000 122400
Cash in hand 66600 97200
Preliminary expenses 10800 7200
The income statement of Software Securities Ltd. is as under
Sales 1602000
less cost of sale 837000

less operating exp. 397800
less interest exp. 21600
loss on sale of equipments 3600
126000

Net income before tax 342000
Provision of tax 117000
Net Income after tax 225000
Additional information:
(a) Operating expenses include depreciation of ` 59400 and charges from preliminary
expenses of ` 3600.
(b) Land was sold at its book value.
(c) Cash dividend paid for the year 2006 amounted to ` 27000 and fully paid bonus
shares were given in the ratio of 2 shares for every 3 shares hel(d).
(d) Interest expenses was paid in cash.

224 LOVELY PROFESSIONAL UNIVERSITY