BROUGHT TO YOU BY:

HUZAIFA ABDULLAH
TEL: 01674303688
ADDRESS: HOUSE#45, ROAD #1
DHANMONDI, DHAKA
EMAIL: huzaifa_abdullah@hotmail.com

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 1. Following are the assets and liabilities of Soheb Traders. The financial year starts from 1
January and ends at 31 December.

Details 1 January 31 December

£ £
5% Investment account 5000 10000
10% loan from Eastern Bank 45000 40000

Additional information:
• Payment into the investment account took place on 1 April.
• Loan repayment was made on 1 October.

Calculate the interest receivable from investment account to be transferred to P&L account.

Calculate the loan interest to be transferred to P&L account.

2. Following are the assets and liabilities of Hammad Traders. The financial year starts from 1
January and ends at 31 December.

Details 1 January 31 December

£ £
15% Investment account 5000 10000
8% loan from Eastern Bank 45000 40000

Additional information:
• Payment into the investment account took place on 1 October.
• Loan repayment was made on 1 April.

Calculate the interest receivable from investment account to be transferred to P&L account.

Calculate the loan interest to be transferred to P&L account.

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 3. Following are the assets and liabilities of Mariam Traders. The financial year starts from 1
January and ends at 31 December.

Details 1 January 31 December

£ £
5% Investment account 15000 10000
8% loan from Eastern Bank 45000 40000

Additional information:
• Withdrawal from the investment account took place on 1 July.
• Loan repayment was made on 1 October.

Calculate the interest receivable from investment account to be transferred to P&L account.

Calculate the loan interest to be transferred to P&L account.

4. Following are the assets and liabilities of Wasif Traders. The financial year starts from 1 January
and ends at 31 December.

Details 1 January 31 December

£ £
7% Investment account 5000 2000
9% loan from Eastern Bank 45000 50000

Additional information:
• Withdrawal from the investment account took place on 1 April.
• Additional loan was obtained on 1 October.

Calculate the interest receivable from investment account to be transferred to P&L account.

Calculate the loan interest to be transferred to P&L account.

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 5. Following are the assets and liabilities of Hibban Traders. The financial year starts from 1
January and ends at 31 December.

Details 1 January £ 31 December £

7% Investment account 5000 2000
loan from Eastern Bank 45000 44000
Machinery (net book value) 50000 55000

Bank account (extract)

£ £
Interest 45 Loan repayment 2000
Machinery 7500

Additional information:
• Withdrawal from the investment account took place on 1 April.
• No loan interest was due.
• No fixed assets were sold or during the year.

Calculate the interest receivable from investment account to be transferred to P&L account

Calculate the loan interest to be transferred to P&L account.

Calculate the amount of depreciation to be charged to the P& L account.

Show all the relevant entries in the balance sheet (interest on investment, loan, and depreciation.)

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 6. Following are the assets and liabilities of Hibban Traders. The financial year starts from 1
January and ends at 31 December.

Details 1 January £ 31 December £

10% Investment account 15000 20000
loan from Eastern Bank 46000 44000
Machinery (net book value) 50000 55000

Bank account (extract)

£ £
Interest 2600 Loan repayment 2000
Machinery 7500
Investment 5000

Additional information:
• No loan interest was due.
• Payment for investment took place on 1 October.
• No fixed assets were sold during the year.

Calculate the interest receivable from investment account to be transferred to P&L account

Calculate the loan interest to be transferred to P&L account.

Calculate the amount of depreciation to be charged to the P& L account.

Show all the relevant entries in the balance sheet (interest on investment, loan, and depreciation.)

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 7. Following are the assets and liabilities of Hibban Traders. The financial year starts from 1
January and ends at 31 December.

Details 1 January £ 31 December £

4% Investment account 1500 2000
loan from Eastern Bank 45000 44000
Machinery (net book value) 45000 49500
Fixtures and fittings 6000 ?
Debtors 50000 70000

Bank account (extract)

£ £
Interest 45 Loan repayment 2000
Machinery 7500
Investment 500

Additional information:
• Payment for investment took place on 1 July.
• No fixed assets were sold during the year.
• Fixtures are depreciated @25% on reducing balance method.
• Hibban maintains 5% provision of doubtful debts.
• No loan interest is due.

Required:
a. Calculate the interest receivable from investment account to be transferred to P&L account
b. Calculate the loan interest to be transferred to P&L account.
c. Calculate the amount of depreciation to be charged to the P& L account.
d. Prepare the provision for bad debts account.
e. Show all the relevant entries in the balance sheet (interest on investment, loan, provision for
bad debts and depreciation.)

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 8. Following are the assets and liabilities of Hibban Traders. The financial year starts from 1
January and ends at 31 December.

Details 1 January £ 31 December £

6% loan from Eastern Bank 45000 43500
Machinery (net book value) 45000 ?
Fixtures and fittings (cost 10000) 6000 7800
Debtors 34000 17000
Loan interest due - ?

Bank account (extract)

£ £
Machinery 2500 Machinery 7500
Fixtures 2000

Additional information:
• No loan interest was due.
• Machinery is depreciated @25% on reducing balance method.
• Hibban charges full years depreciation on the year of purchase.
• The machinery sold during the year had a net book value of £3000.
• Hibban maintains 6% provision of doubtful debts.

Required:
a. Calculate the loan interest to be transferred to P&L account.
b. Calculate the amount of depreciation to be charged to the P& L account.
c. Calculate the profit/loss from the sale of machinery.
d. Prepare the provision for bad debts account.
e. Show all the relevant entries in the balance sheet (loan, provision for bad debts and
depreciation, profit/loss on sale of machinery.)

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9. Following are the assets and liabilities of Hibban Traders for the year ended 31 December 2009.

Details 1 January £ 31 December £

Machinery cost 50000 ?
Fixtures and fittings 5600 7000
Provision for depreciation on machinery 15000 ?
Debtors 80000 75000

Bank account (extract)

£ £
Machinery 500 Machinery 7500
Fixtures 2000

Additional information:
• Machinery is depreciated @25% on cost.
• The machinery sold during the year had a cost of £3000 and was bought on 15 July
2007.
• It is the firm’s policy to charge full years depreciation on the year of sale and none on
the year of sale.
• Hibban maintained 6% provision of doubtful debts throughout his business life now he
wishes to increase it to 7%.

Required:
a. Calculate the amount of depreciation to be charged to the P& L account.
b. Prepare the machinery provision for depreciation account
c. Calculate the profit/loss from the sale of machinery.
d. Prepare the provision for bad debts account.
e. Show all the relevant entries in the balance sheet (provision for bad debts and depreciation,
profit/loss on sale of machinery.)

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10. Following are the assets and liabilities of Hibban Traders for the year ended 31 December 2009.

Details 1 January £ 31 December £

Machinery cost 78000 ?
Fixtures and fittings 5600 7000
Provision for depreciation on machinery 15000 ?
Debtors 80000 75000

Bank account (extract)

£ £
Machinery 1500 Machinery 17500
Fixtures 2000

Additional information:
• Machinery is depreciated @20% on cost.
• The machinery sold during the year had a cost of £13000 and was bought on 21 July
2008.
• It is the firm’s policy to charge full years depreciation on the year of sale and none on
the year of sale.
• Hibban maintained 6% provision of doubtful debts throughout his business life now he
wishes to increase it to 7%.

Required:
a. Calculate the amount of depreciation to be charged to the P& L account.
b. Calculate the profit/loss from the sale of machinery.
c. Prepare the machinery provision for depreciation account
d. Prepare the provision for bad debts account.
e. Show all the relevant entries in the balance sheet (provision for bad debts and depreciation.)

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11. Following are the assets and liabilities of Hibban Traders for the year ended 31 December 2009.

Details 1 January £ 31 December £

Machinery cost 78000 ?
Fixtures and fittings 15600 17000
Provision for depreciation on machinery 15000 ?

Bank account (extract)

£ £
Machinery 6500 Machinery 17500
Fixtures 5000

Additional information:
• Machinery is depreciated @15% on cost.
• The machinery sold during the year had a cost of £13000 and was bought on 1 July
2008.
• It is the firm’s policy to charge monthly depreciation on the year of sale and none on
the year of sale.

Required:
a. Calculate the amount of depreciation to be charged to the P& L account.
b. Calculate the profit/loss from the sale of machinery.
c. Prepare the machinery provision for depreciation account
d. Show all the relevant entries in the balance sheet (provision for bad debts and depreciation.)

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12. Following are the assets and liabilities of Hibban Traders for the year ended 31 December 2009.

Details 1 January £ 31 December £

Machinery cost 80000 ?
Fixtures and fittings (net book value) 4000 7000
Provision for depreciation on machinery 15000 ?

Bank account (extract)

£ £
Machinery 6500 Machinery 17500
Fixtures 5000

Additional information:
• Machinery is depreciated @25% on cost.
• The machinery sold during the year had a cost of £16000 and was bought on 1 July
2008.
• It is the firm’s policy to charge monthly depreciation on the year of sale and none on
the year of sale.
• All the fixtures were part exchanged at an agreed valuation of £3500.

Required:
a. Calculate the amount of depreciation to be charged to the P& L account.
b. Calculate the profit/loss from the sale of machinery.
c. Calculate the profit/loss from sale of fixtures.
d. Prepare the machinery provision for depreciation account
e. Show all the relevant entries in the balance sheet (depreciation.)

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