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Accounting for Managers
Notes Office stationery expenses xxxx
Other operating cash expenses xxxx
Fund from Operations
Example: From the following details calculate Funds from Operations:
Salaries 10,000
Rent 6,000
Refund of Tax 6,000
Profit on Sale of Building 10,000
Depreciation on Plant 10,000
Provision for Taxation 8,000
Loss on Sale of Plant 4,000
Closing Balance of Profit & Loss A/c 1,20,000
Opening Balance on Profit & Loss A/c 50,000
Discount on Issue of Debentures 4,000
Provision for Bad Debts 2,000
Transfer to General Reserve 2,000
Preliminary Expenses written off 6,000
Goodwill written off 4,000
Dividend Received 10,000
Proposed Dividend 12,000
Solution:
Calculation of Fund from Operation
First Method
Closing Balance of Profit & Loss A/c 1,20,000
Less: Opening Balance 50,000
Balance Forward 70,000
Add: Non-fund/Non-operating Charges
Depreciation on Plant 10,000
Provision for Taxation 8,000
Loss on Sale of Plant 4,000
Discount on Issue of Debentures 4,000
Provision for Bad Debts 2,000
Transfer to General Reserve 2,000
Preliminary Expenses off 6,000
Goodwill Written off 4,000
Proposed Dividend 12,000
1,22,000
148 LOVELY PROFESSIONAL UNIVERSITY
