JAIBB

JAIBB
ACCOUNTING FOR FINANCIAL SERVICES (AFS)
MATHEMATICS
JOURNAL, LEDGER, TRIAL BALANCE
Md. Anisur Rahman (Parvej), SO (IT), ICTD, BDBL

Question # 1 [June-2013]
 Mr. M. Khan opened the Campus Laundry on January 1, 2013. During the first month
of operations the following transactions occur :—
Jan 1 Khan invested Tk. 20,000 cash.
Jan 2 The company paid Tk. 1,000 cash for store rent.
Jan 3 Purchased washers and dryers for Tk. 25,000, paying Tk. 10,000 in cash
and signing a Tk. 15,000, 6-month, 12% note.
Jan 4 Paid Tk. 1,200 for a one-year insurance policy.
Jan 10 Received a bill from the ‘Daily News’ for advertising the opening of the
Laundry Tk. 200.
Jan 20 Khan withdrew Tk. 700 cash for personal use.
Jan 30 The company determined that cash receipts for laundry services for the
month were Tk. 6,200.
The chart of accounts followed by M. Khan includes :—
Cash, M. Khan Capital, M. Khan Drawing, Rent Expense, Laundry Equipment, Notes
Payable, Prepaid Insurance, Advertising Expenses, Accounts Payable, Service
Revenue.
Requirements :
(i). Journalize the transactions;
(ii). Post the transactions to the Ledgers;
(iii). Prepare a Trial Balance at January 31;
Answer : 1 (i). Journal Entry
Mr. M. Khan
Journal Entry
Date Account Titles and Explanation L.F Debit (Tk.) Credit (Tk.)
2013
Jan-1 Cash 20,000
Mr. M. Khan Capital 20,000
(Cash invested as Capital)
Jan-2 Rent Expenses 1,000
Cash 1,000
(Store rent paide in Cash)
Jan-3 Laundry Equipments 25,000
Cash 10,000
Note Payable 15,000
(Purchase Laundry equipments by cash and
note)
Jan-4 Prepaid Insurance 1,200
Cash 1,200
(Insurance Premium paid in cash for 1 year)
Md. Anisur Rahman (Parvej), SO (IT), ICTD, BDBL 2
Jan-10 Advertisement Expenses 200
Accounts Payable 200
(Advertisement bill paid on account)
Jan-20 Mr. M. Khan Drawings 700
Cash 700
(Withdrew cash for personal use)
Jan-30 Cash 6,200
Service Revenue 6,200
(Received cash for laundry services)
54,300 54,300
Answer : 1 (ii). Ledger Entries
Cash Account Account No. - 01

Date Explanation Ref. Debit (Tk.) Credit (Tk.) Balance (Tk.)
Jan-1 Owner’s Investment 20,000 — 20,000
Jan-2 Rent Expenses 1,000 19,000
Jan-3 Laundry Equipments 10,000 9,000
Jan-4 Prepaid Insurance 1,200 7,800
Jan-20 Mr. M. Khan Drawings 700 7,100
Jan-30 Service Revenue 6,200 13,300
M. Khan Capital Account Account No. - 02

Jan-1 Cash 20,000 20,000
Rent Expenses Account Account No. - 03

Jan-2 Cash 1,000 1,000
Laundry Equipments Account Account No. - 04

Jan-03 Cash 10,000 10,000
April-30 Note Payabble 15,000 25,000
Note Payable Account Account No. - 05

Jan-3 Laundry Equipments 15,000 15,000

Prepaid Insurance Account Account No. - 06
Jan-4 Cash 1,200 1,200
Advertisement Expenses Account Account No. - 07

Jan-10 Accounts Payable 200 200
Accounts Payable Account Account No. - 08

Jan-10 Advertisement Expenses 200 200
M. Khan’s Drawings Account Account No. - 09

Jan-20 Cash 700 700
Service Revenue Account Account No. - 10

Jan-30 Cash 6,200 6,200
Answer : 1 (iii). Trial Balance
Mr. M. Khan
Trial Balance
As at January 31, 2013
Debit Credit
Account No. Account Titles Ref. (Tk.) (Tk.)
# 01 Cash 13,300
# 03 Rent Expenses Account 1,000
# 04 Laundry Equipments Account 25,000
# 06 Prepaid Insurance Account 1,200
# 07 Advertisement Expenses Account 200
# 09 M. Khan’s Drawings 700
# 02 M. Khan Capital Account 20,000
# 05 Notes Payable Account 15,000
# 08 Accounts Payable Account 200
# 10 Service Revenue Account 6,200
Total 41,400 41,400


Question # 2 [December-2012]
 The Adventure Park was started on April 1 by Al Rossy. The following selected
events and transactions occured during April :—
April 1 Rossy invested Tk. 50,000 cash in the business.
April 4 Purchased land costing Tk. 30,000 for cash.
April 8 Incurred advertising expenses of Tk. 1,800 on account.
April 11 Paid salaries to employees Tk. 15,000.
April 12 Hired a park manager at a salary of Tk. 4,000 per month effective May
1.
April 13 Paid Tk. 1,500 cash for a one year insurance policy.
April 17 Withdrew Tk. 600 cash for personal use.
April 20 Received Tk. 5,700 in cash for admission fees.
April 25 Sold 100 coupon books for Tk. 25 each. Each book contains 10 coupons
that entitle the holder to one admission to the park.
April 30 Received Tk. 5,900 in cash admission fees.
April 30 Paid Tk. 700 on account for advertising incurred on April 8.
Al Rossy uses the following Accounts :—
Cash, Prepaid Insurance, Land, Accounts Payable, Unearned Admission Revenue, Al
Rossy Capital, Al Rossy Drawing, Admission Revenue, Advertising Expense and
Salaries Expense.
Requirements :
(i). Journalize the Transactions;
(ii). Post the transactions to the Ledger;
(iii). Prepare a Trial Balance;
Answer : 2 (i).
Mr. Al Rossy
Journal Entry
Date Account Titles and Explanation L.F. Debit (Tk.) Credit (Tk.)
April-1 Cash 50,000
Al Rossy Capital 50,000
April-4 Land 30,000
Cash 30,000
(Land purchased in Cash)
April-8 Advertising Exepenses 1,800
Accounts Payable 1,800
(Advertisement incurred on Account)
April-11 Salaries Expenses 15,000
Cash 15,000
(Salaries paid in Cash)
April-12 Event but no financial transaction  
April-13 Prepaid Insurance 1,500
Cash 1,500
April-17 Al Rossy Drawing 600
Cash 600
April-20 Cash 5,700
Admission Revenue 5,700
(Cash received as Admission Revenue)
April-25 Cash 2,500 (100  25)
Un-earned Admission Revenue 2,500
(Cash Received from sale of 100 coupon
books)
April-30 Cash 5,900
(Cash Received from entrance fees)
April-30 Accounts Payable 700
Cash 700
(Cash paid to the advertising agency)
April-30 Insurance Expenses 125 (1,500  12)
Prepaid Insurance 125
(Insurance Premium for April)
1,13,825 1,13,825

April-1 Owner’s Investment 50,000 — 50,000
April-4 Land 30,000 20,000
April-11 Salaries Expenses 15,000 5,000
April-13 Prepaid Insurance 1,500 3,500
April-17 Al Rossy Drawings 600 2,900
April-20 Admission Revenue 5,700 8,600
April-25 Un-earned Admission Revenue 2,500 11,100
April-30 Accounts Payable 700 16,300

Capital Account Account No. - 02
April-1 Cash 50,000 50,000
Land Account Account No. - 03
April-4 Cash 30,000 30,000

April-8 Accounts Payable 1,800 1,800

April-8 Advertisement Expenses 1,800 1,800
April-30 Cash 700 1,100
Salaries Expenses Account Account No. - 06

April-11 Cash 15,000 15,000

April-13 Cash 1,500 1,500
April-30 Insurance Expenses 125 1,375
Al Rossy’s Drawings Account Account No. - 08

April-17 Cash 600 600
Admission Revenue Account Account No. - 09

April-20 Cash 5,700 5,700
April-30 Cash 5,900 11,600
Un-earned Admission Revenue Account Account No. - 10
April-25 Cash 2,500 2,500
Insurance Expenses Account Account No. - 11

April-30 Prepaid Insurance 125 125

Mr. Al Rossy
Trial Balance
As on April-30
Account No. Account Titles Ref.Debit (Tk.) Credit (Tk.)

# 01 Cash 16,300
# 03 Land 30,000
# 04 Advertisement Expenses 1,800
# 06 Salaries Expenses 15,000
# 07 Prepaid Insurance 1,375
# 08 Al Rossy’s Drawings 600
# 11 Insurance Expenses 125
# 02 Al Rossy’s Capital 50,000
# 05 Accounts Payable 1,100
# 09 Admission Revenue 11,600
# 10 Un-earned Admission Revenue 2,500
Total 65,200 65,200

Question # 3 [May-2012]
 Jane Kent is a licensed CA. During the first month of operation of her business the
following events and transactions occured :—
May 1 Kent invested Tk. 2,50,000 in cash.
May 2 Hired a secretary-receptionist at a salary of Tk. 20,000 per month.
May 3 Purchased Tk. 25,000 of supplies on account from Red Supply
Company.
May 7 Paid office rent of Tk. 9,000 cash for the month.
May 8 Completed a tax assignment and billed customer Tk. 21,000 for services
provided.
May 12 Received Tk. 3,500 advance on a management consulting engagement.
May 17 Received cash of Tk. 10,000 for services completed for F. Arnold Co.
May 31 Pad secretary receptionist Tk. 20,000 salary for the month.
May 31 Paid 40% of balance due to Red Supply Co.
Requirements :
(i). Journalize the transactions;
(ii). Post the transactions to the Ledgers;
(iii). Prepare a Trial Balance of May 31, 2011;

Answer : 3 (i). Journal Account
Ms. Jane Kent
Journal Entry
2011
May 1 Cash 2,50,000
Kent Capital 2,50,000
May 2 Event but no financial transaction  
May 3 Supplies 25,000
Accounts Payable-Red Supply Company 25,000
(Purchased supplies on accounts from Red Supply
Company
May 7 Rent Expenses 9,000
Cash 9,000
(Monthly Office Rent paid in Cash)
May 8 Accounts Receivable 21,000
(Billed client for Service rendered)
May 12 Cash 3,500
Un-earned Revenue 3,500
(received cash in advance for future service)
May 17 Cash 10,000
(Received cash for service completed)
May 31 Salary Expenses 20,000
Cash 20,000
(Salary of secretary paid in cash)
May 31 Accounts Payable-Red Supply Company 10,000 (25,000  40%)
Cash 10,000
(Paid 40% of Red Supply Co.)
3,48,500 3,48,500

Date Particulars Ref. Debit (Tk.) Credit (Tk.) Balance (Tk.)
May 1 Owner’s Investment 2,50,000 — 2,50,000
May 7 Rent Expenses 9,000 2,41,000
May 12 Un-earned Revenue 3,500 2,44,500
May 17 Service Revenue 10,000 2,54,500
May 31 Salary Expenses 20,000 2,34,500
May 31 Accounts Payable 10,000 2,24,500
Jane Kent Capital Account No. - 02
May 1 Cash 2,50,000 2,50,000
Supplies Account No. - 03
May 3 Accounts Payable 25,000 25,000
Accounts Payable Account No. - 04
May 3 Supplies 25,000 25,000
May 31 Cash 10,000 15,000
Rent Expenses Account No. - 05
May 7 Cash 9,000 9,000
Accounts Receivable Account No. - 06
May-8 Service Revenue 21,000 21,000
Service Revenue Account No. - 07
May-8 Accounts Receivable 21,000 21,000
May-17 Cash 10,000 31,000
Un-earned Revenue Account No. - 08
May-12 Cash 3,500 3,500
Salary Expenses Account No. - 09
May-31 Cash 20,000 20,000

Ms. Jane Kent
Trial Balance
May 31, 2011
Account No. Account Titles Ref. Debit (Tk.) Credit (Tk.)
# 01 Cash 2,24,500
# 03 Supplies 25,000
# 05 Rent Expenses 9,000
# 06 Accounts Receivable 21,000
# 09 Salary Expenses 20,000
# 02 Jane Kent Capital 2,50,000
# 07 Service Revenue 31,000
# 08 Un-earned Revenue 3,500
Total 2,99,500 2,99,500

Question # 4 [November-2011]
 Nandan Park was started on April-1 by M. Kamal. The following selected events and
transactions occured during April :—
April 1 Kamal invested Tk. 2,00,000 cash.
April 4 Purchased land costing Tk. 50,000 for cash.
April 8 Incurred advertising expenses of Tk. 2,000 on account.
April 11 Paid salaries to employees Tk. 15,000.
April 12 Hired a park manager at a salary of Tk. 40,000 p.m. effective May 1.
April 13 Paid Tk. 36,000 cash for a one year insurance policy.
April 17 Withdrew Tk. 10,000 cash for personal use.
April 20 Received Tk. 6,000 for admission fees.
April 25 Sold 100 coupon books for Tk. 250 each. Each book contains 10 coupons
that allow the holder to one admission to the park.
April 30 Received Tk. 8,900 in cash admission fees.
April 30 Paid Tk. 900 to the advertising agency incurred on April 8.
April 30 Paid Insurance Premium for April.
M. Kamal uses the following Accounts :—
Cash, Prepaid Insurance, Land, Accounts Payable, Unearned Admission Revenue,
M.Kamal Capital, M.Kamal Drawing, Admission Revenue, Advertising Expenses and
Salaries Expense.
Requirements :
(i). Journalize the April Transactions;
(ii). Post to the Ledger; (iii). Prepare a Trial Balance;
Answer : 4 (i). Mr. M. Kamal
Journal Entry
Cash
April-1 2,00,000
M. Kamal Capital 2,00,000
April-4 Land 50,000
Cash 50,000
(Land purchased for Cash)
April-8 Advertising Exepenses 2,000
(Advertisement incurred on Account)
April-11 Salaries Expenses 15,000
Cash 15,000
(Salaries paid in Cash)
April-12 Event but no financial transaction  
Cash 36,000
April-17 M. Kamal Drawings 10,000
Cash 10,000
April-20 Cash 6,000
(Cash received as Admission Revenue)
April-25 Cash 25,000 (1 0 0 × 2 5 0 )
Un-earned Admission Revenue 25,000
(Cash Received from sale of 100 coupon books)
April-30 Cash 8,900
(Cash Received from entrance fees)
April-30 Accounts Payable 900
Cash 900
(Cash paid to the advertising agency)
April-30 Insurance Expenses 3,000 (36,000÷12)
Prepaid Insurance 3,000
(Insurance Premium for April)
3,56,800 3,56,800
April-1 Owner’s Investment 2,00,000 — 2,00,000
April-4 Land 50,000 150,000
April-11 Salaries Expenses 15,000 135,000
April-17 M. Kamal Drawings 10,000 89,000
Un-earned Admission
April-25 Revenue 25,000 1,20,000
April-30 Admission Revenue 8,900 1,28,900
April-30 Accounts Payable 900 1,28,000
Capital Account Account No. - 02
Date Explanation Ref. Debit (Tk.) Credit (Tk.)Balance (Tk.)
April-1 Cash 2,00,000 2,00,000
Land Account Account No. - 03
April-4 Cash 50,000 50,000
April-8 Advertisement Expenses 2,000 2,000
April-30 Cash 900 1,100
Salaries Expenses Account Account No. - 06
April-11 Cash 15,000 15,000
April-13 Cash 36,000 36,000
April-30 Insurance Expenses 3,000 33,000
M. Kamal’s Drawings Account Account No. - 08
April-17 Cash 10,000 10,000

Admission Revenue Account Account No. - 09
April-20 Cash 6,000 6,000
April-30 Cash 8,900 14,900
Un-earned Admission Revenue Account Account No. - 10
April-25 Cash 25,000 25,000
Insurance Expenses Account Account No. - 11

Mr. M. Kamal
Trial Balance
As on April-30
Account No. Account Titles Ref.Debit (Tk.) Credit (Tk.)

# 01 Cash 1,28,000
# 03 Land 50,000
# 04 Advertisement Expenses 2,000
# 06 Salaries Expenses 15,000
# 07 Prepaid Insurance 33,000
# 08 M. Kamal’s Drawings 10,000
# 11 Insurance Expenses 3,000
# 02 M. Kamal’s Capital 2,00,000
# 09 Admission Revenue 14,900
# 10 Un-earned Admission Revenue 25,000
Total 2,41,000 2,41,000

 The following selected events and transactions occured during January-2014 :—

January 1 Mr. Ruhul started business with furniture of Tk. 50,000 and a bank loan
of Tk. 50,000.
January 3 Paid Tk. 12,000 for one year insurance policy which includes Tk. 2,000
for his wife’s insurance policy.
January 5 Purchase goods for Tk. 50,000 of which Tk. 20,000 paid in cheque.
January 9 Goods sold for Tk. 1,20,000 of which Tk. 50,000 in cash, Tk. 20,000 in
Bills and Tk. 50,000 in cheque.
January 12 Rent accrued Tk. 5,000.
January 18 Commission Receive Tk. 2,000.
January 20 Money received in advance to provide goods for Tk. 5,000.
January 25 Bank loan is paid with an ineterest of 10% (Annual Rate)
January 31 Paid Insurance Premium for January, 2014.
Requirements :
(i). Journalize the January Transactions;
(ii). Prepare a Trial Balance;
Answer : 5 (i). Mr. Ruhul

Journal Entries
2014
January-1 Cash 50,000
Furniture 50,000
Mr. Ruhul Capital 50,000
10% Bank Loan 50,000
(Owner’s investment of Furniture in
Business and taking Loan from Bank)
January-3 Mr. Ruhul, Drawings 2,000
Cash 12,000
(Paid one year insurance policy of Business
and wife’s insurance policy debited to Mr.
Ruhul Drawings)
January-5 Purchases 50,000
Cash 20,000
(For purchase goods on credit and in cash)
Accounts Receivable 50,000
Notes Receivables 20,000
Sales 1,20,000
(For Cash and Credit Sales)
January-12 Rent Expenses 5,000
Rent Payable 5,000
(For Recording of Rent Expenses)
Commission Income 2,000
(For Commission Income Recording)
Advanced against Sales 5,000
(For recording Advance Sales)
January-25 10% Bank Loan 50,000
Interest Expenses 5,000 (50,000  10%)
Cash 55,000
(10% Bank Loan paid with Interest)
January-31 Insurance Expenses 833 (1 0 ,0 0 0 ÷ 1 2 )
Prepaid Insurance 833

(Insurance Premium for January-2104)
3,49,833 3,49,833
Answer : 5 (ii). Mr. Ruhul
Cash Ledger
2014
January-1 10% Bank Loan 50,000 — 50,000
January-3 Mr. Ruhul, Drawings 2,000 48,000
January-3 Prepaid Insurance 10,000 38,000
January-5 Purchases 20,000 18,000
January-9 Sales 50,000 68,000
January-18 Commission Income 2,000 70,000
January-20 Advanced against Sales 5,000 75,000
January-25 10% Bank Loan 50,000 25,000
January-25 Interest Expenses 5,000 20,000
Mr. Ruhul
Trial Balance
As on January 31, 2014
Cash 20,000
Furniture 50,000
Mr. Ruhul, Drawings 2,000
Prepaid Insurance 9,167 (1 0 ,0 0 0 - 8 3 3 )
Purchases 50,000
Notes Receivables 20,000
Rent Expenses 5,000
Insurance Expenses 833
Mr. Ruhul Capital 50,000
Sales 120,000
Rent Payable 5,000
Commission Income 2,000
Total 2,07,000 2,07,000

Question # 6
 The following transactions are obtained from the books of Mr. Prime for the month of
April, 2011 :—s
April 1 Prime invested cash Tk. 2,00,000 and furniture Tk. 50,000 into the
business.
April 5 Purchased office supplies for cash Tk. 30,000 and on account Tk. 20,000.
April 15 Received cash Tk. 1,00,000 for services rendered.
April 22 Paid office rent Tk. 20,000 for the month of April.
April 24 Insurance paid in advance Tk. 5,000.
April 27 Paid salaries Tk. 25,000 for the month.
April 30 Mr. Prime withdrew Tk. 10,000 for personal use.
Requirements :
(i). Prepare Journal Entries;
(ii). Open necessary Ledger Accounts;
(iii). Prepare a Trial Balance at 30 April, 2011;
Answer : 6 (i). In the books of Mr. Prime

Journal Entries
April-1 Cash 2,00,000

Furniture 50,000
Prime-Capital 2,50,000
(Owner's investment of Cash and Furniture
in business)
April-5 Office Supplies 50,000
Cash 30,000
(Purchased supplies for cash and credit)
Credit
Date Account Titles and Explanation L.F Debit (Tk.) (Tk.)
April-15 Cash 1,00,000
Service Revenue 1,00,000
(Received cash for service provided)
April-22 Rent Expense 20,000
Cash 20,000
(Paid office rent for the month of April by
cash)
Cash 5,000
(Paid advance for insurance)
April-27 Salaries Expense 25,000
Cash 25,000
(Paid salaries for the month of April in
cash)
April-30 Prime-Drawings 10,000
Cash 10,000
(Withdrew cah for personal use)
4,60,000 4,60,000
Ans : 6 (ii). In the books of Mr. Prime

Ledger Accounts
Cash
April-1 Prime-Capital 2,00,000 — 2,00,000
April-5 Office Supplies 30,000 1,70,000
April-15 Service Revenue 1,00,000 2,70,000
April-22 Rent Expense 20,000 2,50,000
April-24 Prepaid Insurance 5,000 2,45,000
April-27 Salaries Expense 25,000 2,20,000
April-31 Prime-Drawings 10,000 2,10,000
Furniture
April-1 Cash 50,000 50,000

Prime-Capital
April-1 Cash 2,00,000 2,00,000
April-1 Furniture 50,000 2,50,000
Office Supplies
April-5 Cash 30,000 30,000
Accounts Payable
April-8 Office Supplies 20,000 20,000
Service Revenue
April-15 Cash 100,000 100,000
Rent Expense
April-22 Cash 20,000 20,000
Prepaid Insurance
April-24 Cash 5,000 5,000
Salaries Expense
April-27 Cash 25,000 25,000
Prime-Drawings
April-30 Cash 10,000 10,000

In the books of Mr. Prime
Trial Balance
As on April-30, 2011
Cash 2,10,000
Furniture 50,000
Office Supplies 50,000
Rent Expense 20,000
Salaries Expense 25,000
Prime-Drawings 10,000
Prime-Capital 2,50,000
Service Revenue 1,00,000
Total 3,70,000 3,70,000

Question # 7
 From the following transactions prepare Journal, Ledger and Trial Balance :—
(i). Mr. Rahman started business with a capital of tk. 1,00,000.
(ii). Paid Tk. 12,000 for one year insurance policy.
(iii). Purchased goods for Tk. 50,000 of which Tk. 20,000 paid in cash.
(iv). Goods sold for Tk. 1,20,000 of which Tk. 70,000 in cash.
(v). Paid rent Tk. 10,000.
(vi). Received commission Tk. 5,000.
(vii). Paid salary Tk. 8,000.
(viii). Withdraw Tk. 5,000 for personal use.
(ix). Took loan from a bank Tk. 50,000 with an interest rate of 10%
(x). Goods sold on credit Tk. 20,000.
Answer : 8 Mr. Rahman
Journal Entries
(i) Cash 1,00,000
Mr. Rahman-Capital 1,00,000
(Mr. Rahman started business with a capital
of Tk. 1,00,000)

(ii). Prepaid Insurance 12,000
Cash 12,000
(Paid advance for insurance)
(iii). Purchase 50,000

Cash 20,000
(Goods purchased in Cash and Credit)
(iv). Cash 70,000

Sales 1,20,000
(Goods sold in Cash and Credit)
(v). Rent Expenses 10,000
Cash 10,000
(Paid rent by Cash)
(vi). Cash 5,000
Commission 5,000
(Commission received in Cash)
(vii). Salary Expenses 8,000
Cash 8,000
(Salary paid by cash)
(viii). Mr. Rahman Drawings 5,000
Cash 5,000
(Cash withdrawn by owner)
(ix). Cash 50,000
(Loan received from Bank)
(x). Accounts Receivable 20,000
Sales 20,000
(Goods sold on Credit)
3,80,000 3,80,000

Ledger Accounts
Cash Account
(i). Mr. Rahman-Capital 1,00,000 — 1,00,000
(ii). Prepaid Insurance 12,000 88,000
(iii). Purchase 20,000 68,000
(iv). Sales 70,000 1,38,000
(v). Rent Expenses 10,000 1,28,000
(vi). Commission 5,000 1,33,000
(vii). Salary Expenses 8,000 1,25,000
(viii). Mr. Rahman Drawings 5,000 1,20,000
(ix). 10% Bank Loan 50,000 1,70,000
Mr. Rahman-Capital
(i). Cash 1,00,000 1,00,000
Prepaid Insurance
(ii). Cash 12,000 12,000
Purchase
(iii). Cash 30,000 30,000
(iii). Accounts Payable 20,000 50,000
Accounts Payable
(iii). Purchase 30,000 30,000
Accounts Receivable
(iv). Sales 50,000 50,000
(x). Sales 20,000 70,000
Sales Account
(iv). Cash 70,000 70,000
(iv). Accounts Receivable 50,000 1,20,000
(x). Accounts Receivable 20,000 1,40,000
Rent Expenses
(v). Cash 10,000 10,000
Commission Account
(vi). Cash 5,000 5,000
Salary Expenses
(vii). Cash 8,000 8,000
Mr. Rahman Drawings

(viii). Cash 5,000 5,000
10% Bank Loan

(ix). Cash 50,000 50,000
Trial Balance
As at ……..
Cash 1,70,000
Mr. Rahman-Capital 1,00,000
Purchase 50,000
Sales Account 1,40,000
Rent Expenses 10,000
Commission Account 5,000
Salary Expenses 8,000
Mr. Rahman Drawings 5,000
Total 3,25,000 3,25,000

JAIBB
MATHEMATICS
INVENTORY, LIFO, FIFO, DEPRECIATION , BEP

 Oriental Camera Shop uses “the lower of cost or market basis” for its inventory. The
following data are available at December 31,2013 :—
Item Brand Units Unit Cost (Taka) Market Price (Taka)

Cameras : Minolta 5 170 160
Canon 6 150 152
Light metres : Vivitar 12 125 110
Kodak 11 115 135
Requirements :
Determine the amount of the ending inventory by applying “the lower of cost or
market basis” to-
(i). Individual Items; (ii). Inventory Categories; (iii). The Total Inventory;
Answer (1) : Amount of Ending Inventory at December 31, 2013 :
Item Brand Stock Cost or Amount (Tk.) Total Amount per
Units Market Lower Category (Tk.)
basis (Tk.)
Cameras Minolta 5 160 5  160 = 800
800 + 900
Canon 6 150 6  150 = 900
= Tk.1,700
Light metres Vivitar 12 110 12  110 = 1,320 1,320 + 1,265
Kodak 11 115 11  115 = 1,265 = Tk. 2,585
(i). Amount of ending inventory for Individual Items :

Cameras Minolta Tk. 800
Canon Tk. 900
Light metres Vivitar Tk. 1,320
Kodak Tk. 1,265
(ii). Amount of ending inventory for Inventory Categories :

Cameras 800 + 900 = Tk.1,700
Light metres 1,320 + 1,265 = Tk. 2,585
(iii). Total Inventory : Tk. 1,700 + Tk. 2,585 = Tk. 4,285


 You are provided with the following information for Web Inc. for the month ended June
30, 2013. Web uses the periodic method for inventory :—
Date Description Quantity Unit Cost or Selling
Price (Taka)
June-1 Beginning Inventory 40 40
June-4 Purchase 135 44
June-10 Sale 110 70
June-11 Sale Return 15 70
June-18 Purchase Return 10 46
June-25 Sale 65 75
Instructions :
Calculate : (i). Ending Inventory, (ii). Cost of Goods Sold, (iii). Gross Profit and (iv).
Gross Profit Rate under each of the following methods :—
(1). LIFO; (2). FIFO; (3). Average Cost;
Answer (2) :
LIFO METHOD
Receipts Issues Balance
Date Qty Rate Value Qty Rate Value Qty Rate Value
2013 Tk. Tk. Tk. Tk. Tk. Tk.
June-1 40 40 40  40  1,600
June-4 135 44 5,940  40 40 1,600 

175   7,540
135 44 5,940
June-10 110 44 4,840 40 40 1, 600 
65  2, 700
135110 44 1,100 
June-11 15 44 660 40 40 1, 600 
 44 
80 25 1,100  3,360
15
 44 660 
June-18 55 46 2,530 40 40 1, 600 
25
 44 1,160 
135   5,890
15 44 660 
55 46 2,530 
June-18 10 46 460 40 40 1, 600 
25
 44 1,160 
125   5, 430
15 44 660 
45 46 2, 070 
June-25  45 46 2,070 40 40 1, 600 
  60   2, 480
65 15 44 660  2,950 20 44 880 
5
 44 220 

LIFO METHOD
June-28 30 50 1,500 40 40 1, 600 
 
90 20 44 880  3, 980
30 50 1, 500 

FIFO METHOD
June-1 40 40 40  40  1,600
June-4 135 44 5,940  40 40 1,600 
175   7,540
135 44 5,940
June-10 40 40 1, 600  0 40 0
110   4, 680 65   2,860
3, 080  135  70 44 2,860 
70 44
June-11 15 44 660 65 44 2,860 

80  3,520
15 44 660 
June-18 55 46 2,530 65 44 2,860 
 44 
135 15 660  6, 050
55

46 2,530 
June-18 10 46 460 65 44 2,860 
 44 
125 15 660  5,590
55  10

46 2, 070 
June-25 65 44 2,860 0 44 0
 44 
60 15 660  2, 730
45

46 2, 070 
June-28 30 50 1,500 15 44 660 
 
90  45 46 2,070  4, 230
30 50 1500 

AVERAGE COST (WEIGHTED) METHOD

June-1 40 40 1,600
June-4 135 44 5,940 40 43.086 7,540
175  1600  5940 
135  40  135 
 
June-10 110 43.086 4,740 175  110  65 43.086 2,800

June-11 15 44 660 65+15=80 43.25 3, 460
 2800  660 
 65  15 
 
June-18 55 46 2,530 135 44.37 5,990
June-18 10 46 460 125 44.24 5,530
June-25 65 44.24 2,876 60 44.24 2,654
June-28 30 50 1,500 90 46.16 4,154
(i). Ending Inventory

LIFO Method 90 units Tk. 3,980
FIFO Method 90 units Tk. 4,230
Average Method 90 units Tk. 4,154
(ii). Cost of Goods Sold
Date LIFO FIFO Average
June-10 Sales 4,840 4,680 4,740
June-25 Sales 2,950 2,860 2,876
Total Sales Tk .7,790 Tk . 7,540 Tk . 7,616
(iii). Gross Profit
Sales LIFO FIFO Average
110 units  Tk. 70 = Tk. 7,700 12,575 12,575 12,575
65 units  Tk. 75 = Tk. 4,875
Total : Tk. 12,575
Less (-) : Cost of Goods Sold 7,790 7,540 7,616
Gross Profit : 4,785 5,035 4,959
(iv). Gross Profit Rate
Gross Profit
We know, Gross Profit Rate =  100
Sales
LIFO FIFO Average
4,785 5,035 4,959
Gross Profit Rate =  100 =  100 =  100
12,575 12,575 12,575
 38.05%  40.04%  39.44%


Question # 3 [Decmber-2013]
 You are provided with the following information for Pavey Inc. for the month ended
October 31, 2012. Pavey uses the periodic method of inventory :—
Date Description Quantity Unit Cost or Selling
Price (Taka)
October-1 Beginning Inventory 60 25
October-9 Purchase 120 26
October-11 Sale 100 35
Instructions : Calculate
(i). Ending Inventory, (ii). Cost of Goods Sold, (iii). Gross Profit and (iv). Gross Profit
Rate under each of the following methods :—
(1). LIFO; (2). FIFO; (3).Average Cost;
Answer (3) :
LIFO METHOD
Oct-1 60 25 1,500
Oct-9 120 26 3,120 60 25 1,500 
180   4, 620
26 3,120 
120
Oct-11 0 25 0 60 25 1,500 
100   2, 600 80   2, 020
2, 600  26 520 
100 26 20
Oct-17 70 27 1,890 60 25 1,500 
 
150 20 26 520  3,910
70 27 1,890 

Oct-22 0 0 0 60 25 1,500
   
60 0 0 0 1, 620 90 20 26 520  2,310
60 27 1, 620  10 27 290 
 
Oct-25 80 28 60 25 1,500 
20
 26 520 
170   4,550
27 290 
10
80 28 2,240
Oct-29 0 0 0 170  110  60 25 1,500

20
 26 520 
110   3,030
27 270
10
80 28 2,240

FIFO METHOD
Oct-1 60 25 1,500
Oct-9 120 26 3,120 60 25 1,500 
180   4, 620
26 3,120 
120
Oct-11 60 25 1,500  180  100  80 26 2,080
100   2,540
1, 040 
40 26
Oct-17 70 27 1,890 80 26 2,080 
150   3,970
27 1,890 
70
Oct-22 60 26 1,560  20 26 520 
60  1,560 90   2, 410
0 27 1,890 
0 0 70
Oct-25 80 28 20 26 520 
 
170 70 27 1,890  4,650
80 28 2, 240 

Oct-29 20 26 520 170  110  60 28 1,680
 
110 70 27 1,890  2,970
20 28 560 


Oct-1 60 25 1,500
Oct-9 120 26 3,120 60  120  180 25.67 4,620
1500  3120 
 60  120 
 
Oct-11 100 25.67 2,567 180  100  80 25.67 2,053
Oct-17 70 27 1,890 80  70  150 26.29 3,943
 2054  1890 
 80  70 
 
Oct-22 60 26.29 1,577 150  60  90 26.29 2,366
Oct-25 80 28 2,240 90  80  170 27.09 4,606
 2366  2240 
 90  80 
 
Oct-29 110 27.10 2,980 170  110  60 27.09 1,626
(i). Ending Inventor
LIFO Method 60 units Tk. 1,500

FIFO Method 60 units Tk. 1,680
Average Method 60 units Tk. 1,626
(ii). Cost of Goods Sold
Sold Date LIFO FIFO Average
October-11 2,600 2,540 2,567
October-22 1,620 1,560 1,577
October-29 3,030 2,970 2,980
Total Sales 7,250 7,070 7,124
(iii). Gross Profit
Sales LIFO FIFO Average
100 units  Tk. 35 = Tk. 3,500 10,300 10,300 10,300
60 units  Tk. 40 = Tk. 2,400
110 units  Tk. 40 = Tk. 4,400
Total : Tk. 10,300
Less (-) : Cost of Goods Sold 7,250 7,070 7,124
Gross Profit : 3,050 3,230 3,174
(iv). Gross Profit Rate
Gross Profit
Sales
LIFO FIFO Average
3,050 3,230 3,174
Gross Profit Rate =  100 =  100 =  100
10,300 10,300 10,300
 29.61%  31.36%  30.81%
Alternative Method
Calculation of cost of goods available for sale (Periodic Method) :

Date
Particulars Units Rate (Tk.) Amount (Tk.)
2012
October-1 Beginning Inventory 60 25 1,500
October-9 Purchases 120 26 3,120
Total = 330 8,750
Goods Available for Sale = 330 units
Cost of Goods Available for Sale = Tk. 8,750

Calculation of Sales :
Date Particulars Units Rate (Tk.) Amount (Tk.)
2012
October-11 Sale 100 35 3,500
October-22 Sale 60 40 2,400
October-29 Sale 110 40 4,400
Total = 270 10,300
Goods Sold = 270 Units
Total Sales = Tk. 10,300
Ending Inventory = Goods Available for Sale - Goods Sold
= 330 - 270 = 60 Units
LIFO METHOD
1. Ending Inventory (Tk.) = 60  25 = Tk. 1,500
2. Cost of Goods sold = Cost of Goods available for sale - Ending Inventory
= 8,750 - 1,500 = Tk. 7,250
3. Gross Profit = Total Sales - Cost of Goods sold = 10,300 - 7,250 = Tk. 3,050
4. Gross Profit Rate = (Gross Profit ÷ Total Sales) 100%
= (3,050 ÷ 10,300)100% = 29.61 %
FIFO METHOD
1. Ending Inventory (Tk.) = 60  28 = Tk. 1,680
= 8,750 - 1,680 = Tk. 7,070

= (3,230 ÷ 10,300)100% = 31.36 %
AVERAGE COST METHOD

Average Rate = Total Cost ÷ Total Units = 8,750 ÷ 330 = Tk. 26.51
1. Ending Inventory (Tk.) = 60  26.51 = Tk. 1,591
= 8,750 - 1,591 = Tk. 7,159
= (3,141 ÷ 10,300)100% = 30.50 %


Question # 4 [June -2010]
 Kabir Traders reported the following information for November and December, 2009 :—
Description November (Taka) December (Taka)
Cost of Goods Purchased 5,00,000 6,10,000
Inventory, Beginning 1,00,000 1,20,000
Inventory, Ending 1,20,000 ?
Sales 8,00,000 10,00,000
Kabir Traders’ ending inventory at December 31 was destroyed in a fire.
Requirements :
a. Compute the Gross Profit Rate for November;
b. Using the gross profit rate for November, determine the estimated cost of
inventory lost in the fire.
Answer (4) :
(i). Gross Profit Rate
Gross Profit
Total Sales
and Gross Profit = Total Sales - Cost of Goods Sold
Here, Total Sales = Tk. 8,00,000 [For November]
Cost of Goods Sold = Cost of Goods Purchased - Cost of Ending Inventory
= 5,00,000 - 1,20,000 [For November]
= Tk. 3,80,000
 Gross Profit = 8,00,000 - 3,80,000 = Tk. 4,20,000
Tk. 4,20,000
 Gross Profit Rate =  100 = 0.525 = 52.5%
Tk. 8,00,000
(ii). Cost of Inventory lost in the fire for December
Here, Gross Profit Rate = 52.50% [as per November]
Gross Profit
We know, Gross Profit Rate =
Total Sales
 Gross Profit = Total Sales  Gross Profit Rate = 10,00,000  52.50%
 Gross Profit  Tk. 52,500
Again, Gross Profit = Total Sales - Cost of Goods Sold
 Cost of Goods Sold = Total Sales - Gross Profit
= 10,00,000 - 52,500 = Tk. 9,47,500
Now, Cost of Ending Inventory = Cost of Goods Purchased - Cost of Goods Sold
= 6,10,000 - 10,00,000 = - Tk. 3,90,000

Question # 5 [November -2010]
 ‘X’ Co. Ltd. purchased a machinery Tk. 5,10,000 on January 1, 2001. Useful life is 5
years, scrap value Tk. 10,000. During 2001, working hours were 2,000. Total estimated
working hours 25,000 :—
Requirements :
Compute depreciation for year 2001 under each of the following methods :
(i). Straight Line;
(ii). Working Hours;
(iii). Sum of Years digit;
Answer (5) : According to Bangladesh Accounting Standards (BAS) :
Cost 5,10,000
Less : Scrap Value 10,000
Depreciable Value Tk. 5,00,000
(i). Straight Line Method :
Depreciation = 5,00,000  5 = Tk. 1,00,000 [For 2001]
(ii). Working Hours Method :
Depreciation = (5,00,000  25,000)  2,000 = 20  2,000 = Tk. 40,000
(iii). Sum of Years Digit Method :
Here, Sum of Year Digits = 5 + 4 + 3 + 2 + 1 = 15
 Depreciation for 2013 = 5,00,000  15 = Tk. 1,66,667

 Monno Ceramics purchased a factory machine at a cost of Tk. 18,000 on January 1,
2010. Monno Ceramics expects the machine to have a salvage value of Tk. 2,000 at the
end of its 4-years useful life. During its useful life the machine is expected to be used
1,60,000 hours. Actual annual hourly use was :—
2010 : 40,000
2011 : 60,000
2012 : 35,000
2013 : 25,000
Instructions :
Prepare Depreciation schedules for the following methods :
(i). Straight Line;
(ii). Units of Activity;
(iii). Declining balance using double the straight line rate;
Answer (6):
(i). Straight Line Method :
Depreciable Value = Purchase Cost - Salvage Value = 18,000 - 2,000 = Tk. 16,000
Depreciable Value 16,000
 Depreciation per Year =   Tk. 4,000
Estimated Life 4,000
Depreciation Schedule
Year Computation Annual Accumulated Carrying or
Depreciation Depreciation Book
Depreciable Value  Dep.Rate Expenses Value
Date of Purchase : Jan-1, 2010 18,000
2010 16,000  25% 4,000 4,000 14,000
2011 16,000  25% 4,000 8,000 10,000
2012 16,000  25% 4,000 12,000 6,000
2013 16,000  25% 4,000 16,000 2,000
(ii). Units of Activity Method :
Depreciable Value = Purchase Cost - Salvage Value = 18,000 - 2,000 = Tk. 16,000
Depreciable Value 16,000
 Depreciation per Hour =   Tk. 0.10
Expected Hours 1,60,000
Date of Purchase : January 1, 2010 at a Cost of Tk. 18,000
Year Computation Annual Year end Year end
Depreciation Accumulated Book Value
Hours Depreciation Expenses Depreciation
Worked per Hour (YAD)
H.W.  Dep/HR. 18,000 - YAD
2010 40,000 0.10 4,000 4,000 14,000
2011 60,000 0.10 6,000 10,000 8,000
2012 35,000 0.10 3,500 13,500 4,500
2013 25,000 0.10 2,500 16,000 2,000
(iii). Declining balance using double the Straight Line Rate Method :
Rate of Normal Depreciation = 100%  Useful Life = 100%  4 = 25%
 Double Declining Rate = 25% × 2 = 50%
Date of Purchase : January 1, 2010 at a Cost of Tk. 18,000
Year Computation

Book value beginning Annual Accumulated Book Value
of the year  Depreciation Rate Depreciation Depreciation 18,000 - AD
Expenses (AD)
2010 18,000  50% 9,000 9,000 9,000
2011 9,000  50% 4,500 13,500 4,500
2012 4,500  50% 2,250 15,750 2,250
2013 2,250 250 16,000 2,000
Here, Tk. 250 is adjusted in 2013, because Ending Book Value should not be less than
Expected Salvage Value 2,000.

 In 2009, Manager’s salary was Tk. 2,00,000; Rent Tk. 80,000, Material Cost Tk. 5 per
unit, Labor Tk. 3 per unit, Other Variable Expenses Tk. 2 per unit, Sales per unit Tk. 16.
In 2010 Manager’s Salary and labour cost increased by 10% but material cost decreased
by 12%. All other information remain the same :
(i). Calculate BEP for 2010;
(ii). How many units to be sold to make a profit of Tk. 1,00,000 in year 2010?
Answer (7). : Here, Product/Variable Cost per unit :
Items In 2009 Increased/Decreased by In 2010
Materials Tk. 5 - 12% Tk. 4.40
Labour Tk. 3 +10% Tk. 3.30
Other Cost Tk. 2 0% Tk. 2.00
Total Tk. 10 Tk. 9.70
Fixed/Period Cost for :
Items In 2009 Increased/Decreased by In 2010
Managers Salary Tk. 2,00,000 +10% Tk. 2,20,000
Rent Expenses Tk. 80,000 0% Tk. 80,000
Total Tk. 2,80,000 Tk. 3,00,000
Contribution per Unit = Sales per unit - Variable cost per unit
= Tk. 16.00 - Tk. 9.70 = Tk. 6.30
(i). BEP in 2010
Fixed Cost Tk. 3,00,000
BEP in Units =   47,619 Units
Contribution per Unit 6.30
BEP in Taka = BEP Units  Sales per Unit = 47,619  16 = Tk. 7,61,904
(ii). Profit/Loss Calculation

BEP in Taka (Net Sales) = Tk. 7,61,904
Variable Cost (for BEP units) = 47,619  Tk. 9.70 = Tk. 4,61,904
 Contribution = Net Sales - Variable Cost
= Tk. 7,61,9 04  Tk. 4,61,904 = Tk. 3,00,000
Fixed Cost = Tk. 3,00,000
 Profit/Loss = Tk. 3,00,000  Tk. 3,00,000  0
In order to make a Profit of Tk. 1,00,000 in year 2010, then

Contribution Amount = Tk. 3,00,000 + Tk. 1,00,000 = Tk. 4,00,000
Contribution per Unit = 6.30
Tk. 4,00,000
 Units to be Sold =  63,492 Units
6.30

 You have been supplied with the following data :—
Particulars Taka
Net Sales 2,00,000
Variable costs 1,00,000
Fixed costs 60,000
Requirements :
(i). Break-even sales in taka;
(ii). P/V ratio;
Answer (8). :
(i). Break-even sales in taka
Fixed Costs
Break-Even Sales =
Contribution Margin Ratio (CM Ratio)
Here, Fixed costs = 60,000
Contribution Margin = Net Sales - Variable Costs
= 2,00,000 - 1,00,000 = 1,00,000
Contribution Margin 1,00,000
 Contribution M arg in Ratio = = = 0.50
Net Sales 2,00,000
Fixed Costs 60,000
 Break-even sales = = = 1,20,000 (Tk.)
CM Ratio 0.50
(ii). P/V Ratio = Contribution M arg in Ratio = 0.50


 In the month of June Xebba Company’s fixed expense including rent of the building and
salary of sales persons is Tk. 1,50,000, selling price per unit is Tk. 30 and variable cost is
Tk. 18 per unit.
(i). Calculate Break-Even point in unit and in sales taka;
(ii). What is the contribution Margin;
Answer (9). :
(i). Break-Even Point Calculation
Fixed Cost
BEP in Units =
Contribution per Unit
Fixed Cost

Selling Price per Unit - Variable Cost per Unit
Tk. 1,50,000 Tk. 1,50,000
=   12,500 units
Tk. 30 - Tk. 18 Tk. 12
BEP in Taka = BEP Units  Sales per Unit = 12,500  Tk. 30 = Tk. 3,75,000
(ii). Contribution Margin Calculation
BEP in Taka (Net Sales) = Tk. 3,75,000
Variable Cost (for BEP units) = 12,500  Tk. 18 = Tk. 2,25,000
 Contribution Margin = Net Sales - Variable Cost
= Tk. 3,75,000  Tk. 2,25,000
= Tk. 1,50,000


JAIBB
MATHEMATICS
WORK BOOK, INCOME STATEMENT, BALANCE SHEET

 From the following information prepare a bank reconciliation statement :—
S/L No. Particulars Taka
(i). Cash as per accountant 25,000
(ii). Bank Service Charges 300
(iii). Debtors deposited into bank directly but not 2,000
known to the accountant
(iv). Cheques issued but not presented to the bank 8,000
(v). Salaries paid Tk. 650, but incorrectly recorded by accountant as Tk. 605
Answer (1) :
…………………..Bank Ltd.
Reconciliation Statement
Particulars Tk. Tk.
Cash Balance according to accountant 25,000
Add :
(i). Bank Service Charge 300
(ii). Debtors deposit which is not entry 2,000
2,300
27,300
Less :
(i). Issued Cheques but not presented to tha bank 8,000
(ii). Salaried paid but wrongly posted 605 instead of 650 45
(6 5 0 - 6 0 5 )
8045
Cash balance according to pass book 19,255

 From the following information prepare a bank reconciliation statement for Rupali Ltd.
At December 31, 2012 :—
Taka
(i). Bank balance as per depositor’s record (31-12-12) 13,506
(ii). Deposit in transit 44,700
(iii). Cheques issued but not yet presented in the bank 1,29,478
(iv). Direct deposit of a cheque in the bank by a customer, the 2,300
fact not yet known to the accountant
(v). Bank service charge for December 75
(vi). Bank balance as per bank pass book (31-12-12) 1,00,509

Answer (2). :
Rupali Ltd.
Bank Reconciliation Statement at December 31,2012
Particulars Tk. Tk. Particulars Tk. Tk.
Balance as per cash book 13,506 Balance as per pass book 1,00,509
Add : Direct Deposit in Bank 2,300 Add : Deposit in transit 44,700
2,300 44,700
Less : Bank Charge 75 15,806 Less : Outstanding cheques 1,29,478 1,45,209
75 1,29,478
Adjusted Balance 15,731 Adjusted Balance 15,731

 Show the following transactions in the cash book :—

(i). Paid rent by cheque Tk. 600;
(ii). Took Tk. 3,000 out of bank and placed in cash;
(iii). Made cash sales Tk. 15,000 including VAT 15%;
(iv). Received a cheque from a debtor Tk. 13,000 in full settlement of his
account of Tk. 1,350;
(v). A charge received but it is dishonoured Tk. 430;
Answer (3). :
Cash Book
Date Explanation P.R Discount Cash Bank Date Explanation P.R Discount Cash Bank
TK. Tk. Tk. TK. Tk. Tk.
Balance b/d Balance b/d
Bank (c) 3,000 Rent 600
Expenses
Sales 12,750 Cash (c) 3,000
VAT Payable 2,250
Debtors A/C 430

Debtors A/C 50 1,350
Debtors A/C 430 Balance c/d
Balance c/d
NOTES
 P.R - Posting Reference;
 Opening Balance bv _vKvq Closing Balance ‡ei Kiv nqwb Ges †hvM Kiv nqwb;
 430 UvKvi †P‡Ki Rb¨ Rb¨ e¨vs‡K Rgv †`qvi †Kvb `vwLjv bv K‡iB mivmwi †`bv`vi‡K †diZ †`qv
n‡jv;


Question # 4 [December -2013]
 From the following information prepare the Accounts Receivable account :—
Accounts Taka
Beginning Balance 30,000
Cash Sales 5,00,000
Credit Sales 8,00,000
Goods Return from credit customers 70,000
Bad Debts 2,500
1% of Credit Sales is estimated as Doubtful (Allowance
for Doubtful Accounts is maintained)
Cash Received from Credit Customers 6,60,000
Answer (4). :
Accounts Receivable Account

Dr. Cr.
Date Particulars Tk. Date Particulars Tk.
Balacne B/D 30,000 Sales Return 70,000
Sales 8,00,000 Bad Debt. Expenses 10,500
Cash Received 6,60,000
Balance C/D 89,500
8,30,000 8,30,000
Balance B/D 89,500
Here, Bad Debt Expenses  1% of Credit Sales + Bad Debts
= Tk. 8,00,000  1% + Tk. 2,500
= Tk. (8,000 + 2,500) = Tk. 10,500


 An old equipment has been disposed recently at Tk. 1, 15,000. Its cost was Tk. 7,00,000
and accumulated depreciation on the date of disposal was Tk. 6,00,000. Give the journal
entries for the disposal of the equipment.
Answer :
Journal Entry
Date Description L.F. Debit (Tk.) Credit (Tk.)
Cash (Disposed Cost) Dr. 1,15,000
Accumulated Depreciation Dr. 6,00,000
Equipment Cost Cr. 7,00,000
Gain on Disposal of Assets Cr. 15,000

NOTE
Gain on disposal of Assets
= Disposal Cost - (Equipment Cost - Accumulated Depreciation)
= Tk. 1,15,000 - Tk. (7,00,000 - 6,00,000)
= Tk. (1,15,000 - 1,00,000) = Tk. 15,000

 The trial balance of the worksheet for Sasse Roofing at March 31, 2012 are as
follows:—
SASSE ROOFING
Worksheet
Account Titles Debit Credit
Taka Taka
Cash 4,500
Accounts Receivables 3,200
Roofing Supplies 2,000
Equipment 11,000
Accumulated Depreciation – Equipment 1,250
Unearned Revenue 550
J. Sasse, Capital 12,900
J. Sasse, Drawing 1,100
Miscellaneous Expense 400
23,500 23,500
Other Data :
(a). A physical count reveals only Tk. 650 of roofing supplies on hand.
(b). Depreciation for March is Tk. 250.
(c). Unearned revenue amounted to Tk. 170 at March 31.
(d). Accrued salaries are Tk. 600.
Requirements :
(i). Complete the worksheet;
(ii). Prepare an income statement;
(iii). Journalize adjusting entries;
(iv). Journalize closing entries;

Answer : 6 (i).
SASSE ROOFING
Work Sheet
For Month ended March 31, 2012
S/L No. Account Tiles Trial Balance Adjusting Entry Adjusted Trial Balance Income Statement Balance Sheet
Dr. Cr. Dr. Cr. Dr. Cr. Dr. Cr. Dr. Cr.
1 Cash 4,500 4,500 4,500
2 Accounts Receivable 3,200 3,200 3,200
3 Roofing Supplies 2,000 1,350 650 650
4 Equipment 11,000 11,000 11,000
5 Acc. Depreciation-Equipment 1,250 250 1,500 1,500
6 Accounts Payable 2,500 2,500 2,500
7 Un-earned Revenue 550 380 170 170
8 J. Sasse, Capital 12,900 12,900 12,900
9 J. Sasse, Drawing 1,100 1,100 1,100
10 Service Revenue 6,300 380 6,680 6,680
11 Salaries Expense 1,300 600 1,900 1,900
12 Miscellaneous Expense 400 400 400
13 Roofing Supplies Expenses 1,350 1,350 1,350
14 Deprciation Expense 250 250 250
15 Salaries Payable 600 600 600
16 Net Income 2,780 2,780
Total 23,500 23,500 2,580 2,580 24,350 24,350 6,680 6,680 20,450 20,450

Answer : 6 (ii).
SASSE ROOFING
Income Statement
For Month ended March 31, 2012
Details Taka Taka
Income :
Add : Unearned Revenue 380
Total Revenue 6,680
Expenses :
Roofing Supplies Expenses 1,350
Deprciation Expense 250
Deprciation Expense-Equipment
Total Expenses 3,900
Net Income 2,780
Answer : 6 (iii). SASSE ROOFING
Adjusting Entry
No. Particulars Ref. Debit (Tk.) Credit (Tk.)
1 Roofing Supplies Expenses 1,350
Roofing Supplies 1,350
2 Deprciation Expense 250
Acc. Depreciation-Equipment 250
3 Un-earned Revenue 380
Service Revenue 380
4 Salaries Expense 600
Salaries Payable 600
Answer : 6 (iv). SASSE ROOFING

Closing Entry
No. Particulars Ref. Debit (Tk.) Credit (Tk.)
1 Service Revenue 6,680
Income Summary 6,680
2 Income Summary 3,900
Roofing Supplies Expenses 1,350
3 Deprciation Expense 250
4 Salaries Expense 1,900

 The trial balance of Monty Zuma Wholesale Company contained the following accounts
at December 31, the end of company’s fiscal year :—
Monty Zuma Wholesale Company
Trial Balance
December 31, 2010
Account Title Debit (Tk.) Credit (Tk.)
Cash 23,400
Merchandise Inventory 90,000
Land 92,000
Building 1,97,000
Acc. Depreciation-Building 54,000
Equipment 83,500
Acc. Depreciation-Equipment 42,400
Notes Payable 50,000
M. Zuma Capital 2,67,800
M. Zuma Drawing 10,000
Sales 9,02,100
Sales Discounts 4,600
Cost of Goods sold 7,09,900
Utilities Expense 19,400
Repair Expense 5,900
Gas and Oil Expense 7,200
Insurance Expense 3,500
13,53,800 13,53,800
Adjusted Data :
(i). Depreciation is Tk. 10,000 on building and tk. 9,000 on equipment (Both are
administrative expenses).
(ii). Interest of Tk. 7,000 is due and unpaid on notes payable at December, 2010.
Other Data :
(i). Salaries are 80% selling and 20% administrative.
(ii). Utilities Expense, Repair Expense and Insurance Expenses are 100% administrative.
(iii). Tk. 15,000 of the notes payable are payable next year.
(iv). Gas and Oil Expense is selling expense.
Requirements :
(a). Enter the Trial Balance on a Worksheet and complete the worksheet;
(b). Prepare :
(i). A Multiple Step Income Statement;
(ii). Owner’s Equity Statement;
(iii). A Classified Balance Sheet;
(c). Journalize the Adjusting Entries.
(d). Journalize the Closing Entries;
8
Answer : 7 (a).
Monty Zuma Wholesales Company
Work Sheet
For the year ended December 31, 2010
S/L No. Account Tiles Trial Balance Adjusments Adjusted Trial Balance Income Statement Balance Sheet
Dr. Cr. Dr. Cr. Dr. Cr. Dr. Cr. Dr. Cr.
1 Cash 23,400 23,400 23,400
2 Accounts Receivable 37,600 37,600 37,600
3 Merchandise Inventory 90,000 90,000 90,000
4 Land 92,000 92,000 92,000
5 Building 1,97,000 1,97,000 1,97,000
6 Acc. Depreciation-Building 54,000 10,000 64,000 64,000
7 Equipment 83,500 83,500 83,500
8 Acc. Depreciation-Equipment 42,400 9,000 51,400 51,400
9 Notes Payable 50,000 50,000 50,000
10 Accounts Payable 37,500 37,500 37,500
11 M. Zuma Capital 2,67,800 2,67,800 2,67,800
12 M. Zuma Drawing 10,000 10,000 10,000
13 Sales 9,02,100 9,02,100 9,02,100
14 Sales Discounts 4,600 4,600 4,600
15 Cost of Goods sold 7,09,900 7,09,900 7,09,900
16 Salaries Expense 69,800 69,800 69,800
17 Utilities Expense 19,400 19,400 19,400
18 Repair Expense 5,900 5,900 5,900
19 Gas and Oil Expense 7,200 7,200 7,200
20 Insurance Expense 3,500 3,500 3,500
21 Deprciation Expense-Building 10,000 10,000 10,000
22 Deprciation Expense-Equipment 9,000 9,000 9,000
23 Interest Expenses 7,000 7,000 7,000
24 Interest Payable 7,000 7,000 7,000
25 Net Income 55,800 55,800
Total = 13,53,800 13,53,800 26,000 26,000 13,79,800 13,79,800 9,02,100 9,02,100 5,33,500 5,33,500

Answer : 7b (i).
Income Statement
Details Taka Taka Taka
Sales Revenues :
Sales 9,02,100
Less : Sales Discounts 4,600
Net Sales 8,97,500
Less : Cost of Goods Sold 7,09,900
Gross Profit/Margin 1,87,600
Operating Expenses :
Selling Expenses
Salaries Expenses (69,800 Í 80%) 55,840
Deprciation Expense-Building 10,000
Deprciation Expense-Equipment 9,000
Totla Selling Expenses : 82,040
Administrative Expenses
Salaries Expenses (69,800 Í 20%) 13,960
Totla Administrative Expenses : 42,760
Total Operating Expenses : 1,24,800
Income from Operations 62,800
Interest Expenses 7,000
Net Income 55,800
Answer : 7b (ii).
Owner's Equity Statement
Details Taka Taka
M. Zuma Capital (Jan 1, 2010) 2,67,800
Add : Net Income 55,800
3,23,600
Less : M. Zuma Drawings 10,000
Owner's Equity [M. Zuma Capital (Dec 31,2010)] 3,13,600

Answer : 7b (iii).
Balance Sheet
December 31, 2010
Assets
Current Assets :
Cash 23,400
Merchandise Inventory 90,000
Total Current Assets 1,51,000
Fixed Assets :
Land 92,000
Building 1,97,000
Less : Acc. Depreciation-Building 64,000
1,33,000
Equipment 83,500
Less : Acc. Depreciation-Equipment 51,400
32,100
Total Fixed Assets 2,57,100
Total Assets 4,08,100
Liabilities and Owner's Equity

Current Liabilities :
Notes Payable Due -Current Year 15,000
Interest Payable 7,000
Total Current Liabilities 59,500
Long Term Liabilities :
Notes Payable Due -Next Year 35,000
Total Liabilities 94,500
Owner's Equity :
M. Zuma Capital (Dec 31,2010) 3,13,600
Total Liabilities and Owner's Equity 4,08,100

Answer : 7 (c). Adjusting Entries
Date Particulars Ref. Debit (Tk.) Credit (Tk.)
2010
Dec-31 Deprciation Expense-Equipment 10,000
Acc. Depreciation-Building 10,000
(To Record Depriciation)
Dec-31 Deprciation Expense-Equipment 9,000
Acc. Depreciation-Equipment 9,000
(To Record Depriciation)
Dec-31 Interest Expenses 7,000
(To Record Interest Payable)
Answer : 7(d). Closing Entries

Date Account Titles Ref. Debit (Tk.) Credit (Tk.)
2010
Dec-31 Sales 9,02,100
Income Summary 9,02,100
Dec-31 Income Summary 8,46,300
Sales Discounts 4,600
Deprciation Expense-Building 10,000
Deprciation Expense-Equipment 9,000
Dec-31 Income Summary 55,800
M. Zuma Capital 55,800
Dec-31 Income Summary 10,000
M. Zuma Drawing 10,000

 On April 1, Vinnie Venuchi established Vinnies Travel Agency. The Following
transactions were completed during the month :—
(i). Invested Tk. 15,000 cash to start the agency.
(ii). Paid Tk. 600 cash for April office rent.
(iii). Purchased office equipment for Tk. 3,000 cash.
(iv). Incurred Tk. 700 advertising cost on account.
(v). Paid Tk. 800 cash for office supplies.
(vi). Earned Tk. 11,000 for services rendered; Tk. 3,000 cash is received from
customers and the balance of Tk. 8,000 is billed to customers on account.
(vii). Withdrew Tk. 500 cash for personal use.
(viii). Paid the amount due in (iv).
(ix). Paid employee's salaries Tk. 2,200.
(x). Received Tk. 4,000 in cash from customers who have previously been billed
in transaction (vi).
Instructions :
(i). Prepare a tabular analysis of the transactions using the basic accounting
equation.
(ii). Compute net income or loss for April.
Answer (8). :
(i). Tabular Analysis
Vinnie Venuchi’s
Tabular Analysis of Transactions
Assets = Liabilities + Owner’s
Comments
S/L Equity
No. Cash + Accounts + Office + Office = Accounts + Capital or
Receivable Supplies Equipments Payable Owner’s
Investment
1. 15,000 = 1,5000 Initial
Investment
2. (600) = (600) Office Rent
3. (3,000) 3,000 =
4. = 700 (700) Advertisem
ent Expens.
5. (800) 800 =
6. 3,000 8,000 = 11,000 Service
Revenue
7. (500) = (500) Drawings
8. (700) = (700)
9. (2,200) = (2,200) Salaries
Expenses
10. 4,000 (4,000) =
14,200 4,000 800 3,000 = - 22,000
22,000 = 22,000

(ii). Net Income or Loss
Vinnie Venuchi’s
Income Statement
For the month ended April 30
Description Tk. Tk.
Income :
Expenses :
Office Rent 600
Advertisement Expense 700
Salaries Expenses 2,200
Total Expenses (3,500)
Net Income 7,500

 The following balances were taken from the books of Shampa Traders on
June 30, 2012 :—
Accounts Debit Credit
Taka Taka
Accounts Receivable 2,90,000
Purchase 8,10,000
Allowances for doubtful debts 5,000
Inventories (July 1, 2011) 60,000
Furniture 1,00,000
Accumulated Depreciation-Furniture 40,000
Buildings 14,00,000
Accumulated Depreciation-Buildings 3,00,000
Goodwill 50,000
Bad debts 60,000
Salaries 2,20,000
Freight in 70,000
Dividend paid 1,50,000
Sales 20,00,000
Interest Income 10,000
Bonds payable 2,55,000
Capital (6000 sahres of Tk. 100 each) 6,00,000
Retained earnings (July 1,2011) 70,000
32,80,000 32,80,000

Adjustments on June 30, 2012 are as follows :
(i). Inventory on June 30, 2012 is Tk. 1,00,000.
(ii). Depriciation on furniture @10%, Buildings @5%.
(iii). The allowances for doubtful accounts are to be increased to a balance of Tk.
8,000.
(iv). Accrued salaries Tk. 20,000, Accrued interest on bonds Tk. 10,000.
(v). Income taxes are estimated to be 50% of the income before tax.
(vi). Half of Rent Expenses is to be considered prepaid.
Requirements :
(i). A Multiple Step Income Statement;
(ii). Retained Earnings Statement;
(iii). Classsified Balance Sheet;
(iv). Adjusting Entries;
(v). Closing Entries;

Answer : 9 (i).
Shampa Traders
Income Statement (Multiple Step)
For June 30, 2012
Sales Revenues :
Sales 20,00,000
Less : Cost of Goods Sold :
Opening Inventory 60,000
Purchase 8,10,000
Freight in 70,000
8,80,000
Cost of Goods available for sale 9,40,000
(-) Closing Inventory 1,00,000
Total Cost of Goods Sold 8,40,000
Gross Profit/Margin 11,60,000
Less : Operating Expenses :
Salaries Expenses 2,20,000
(+) Accrued 20,000
2,40,000
(-) Prepaid 30,000
30,000
Bad Debts 60,000
(+) New Allowances for Bad debt 8,000
68,000
(-) Old Allowances for Bad debt 5,000
Bad Debts Expenses 63,000
Depreciation on Furniture (1,00,000 x 10%) 10,000
Depreciation on Buildings (14,00,000 x 5%) 70,000
80,000
Total Operating Expenses 4,13,000
Operating Income 7,47,000
Add : Non Operating Income :
7,57,000
Less : Non Operating Expenses :
(+) Accrued 10,000
20,000
Net Income before Tax 7,37,000
Less : Income Tax Payable (7,37,000 x 50%) 3,68,500
Net Income after Tax 3,68,500

Answer : 9 (ii).
Shampa Traders
Retained Earnings Statement
For June 30, 2012
Details Taka Taka
Opening Balance 70,000
Add : Net Income after Tax 368,500
438,500
Less : Dividend Paid 150,000
Retained Earnings transfer to Balance 288,500
Answer : 9 (iii).
Shampa Traders
Balance Sheet (Classified)
As on June 30, 2012
Assets
Current Assets :
Less : New Allowances for Bad Debts 8,000
282,000
Closing Inventory 100,000
Prepaid Rent 30,000
Total Current Assets : 412,000
Fixed Assets :
Buildings 1,400,000
Less : Accumulated Depreciation on Buildings 370,000
1,030,000
Furniture 100,000
Less : Accumulated Depreciation on Furniture 50,000
50,000
Total Fixed Assets : 1,080,000
Intangible Assets :
Goodwill 50,000
Liabilities and Equity
Current Liabilities :
Tax Payable 368,500
Salaries Payable 20,000
Total Current Liabilities 398,500
Long Term Liabilities :
Bonds Payable 255,000
Capital/Common Stock 600,000
Retained Earnings (from R/E Statement) 288,500
Total Liabilities and Equity 1,542,000

Answer : 9(iv). Shampa Traders
Adjusting Entries
No Description Ref. Debit (Tk.) Credit (Tk.)
1 Closing Inventory 1,00,000
2-a Depriciation-Furniture 10,000
Accumulated Depriciation-Furniture 10,000
2-b Depriciation-Buildings 70,000
Accumulated Depriciation-Buildings 70,000
3 Bad Dept Expenses 8,000
Allowances for bad debts 8,000
4-a Salaries Expenses 20,000
Salaries Payable 20,000
4-b Interest Expenses 10,000
Interest payable 10,000
5 Income Tax 3,68,500
Income Tax Payable 3,68,500
6 Prepaid Rent Expenses 30,000
Answer : 9(v). Shampa Traders

Closing Entries
No. Account Titles Ref. Debit (Tk.) Credit (Tk.)
1 Sales Revenue 20,00,000
Income Summary 20,10,000
2 Income Summary 12,73,000
Cost of Goods Sold 8,40,000
Salaries Expenses 2,40,000
Depreciation Expenses-Furniture 10,000
Depreciation Expenses-Buildings 70,000
Bad Debt Expenses 63,000

 Following are the balance of Mercantile Bank Ltd. at December 31, 2009 :—
Accounts Title Debit Credit
Taka Taka
Share Capital : 88,750 shares of Tk. 10 each 8,87,5000
Reserves 5,00,000
Current Account 25,81,343
Deposit Account 6,85, 135
Acceptance and Endorsement for customers 3,40,216
Reserve for Final Dividend 56,005
Profit & Loss A/C (01-01-2009) 1,28,139
Interest Received 1,41,010
Discount Charges 38,461
Commission Charges 1,54,859
Dividend Received less Tax 86,251
Cash in Hand 3,41,644
Cash with Bangladesh Bank 6,21,858
Money at Call and Short Notice 2,79,416
Bill Discounted 8,33,843
Advances to Customers 13,42,120
Liability of customers for Acceptance and Endorsement 3,40,216
Bank Premises 2,60,000
Investment in Shares (cost) 2,48,000
Investment in National Defence Bond (cost) 1,68,000
Balance with Other Banks 2,24,220
Govt. Securities at Cost 6,18,358
Interest Paid 42,048
General Expenses 91,363
Salaries and Allowances 1,00,000
Dividend :
Interim 32,188
Final 56,005
55,98,919 55,98,919
AAdditional Information :
(i). Unexpired discount Tk. 42,000, while interest and dividend accured and
outstanding Tk. 1,23,395;
(ii). Salaries include Tk. 10,000 paid to GM;
(iii). Provide Tk. 17,500 for depreciation on Bank Premises;
(iv). Market value of shares Tk. 2,55,000;
(v). Provide for bad debts to the extent of Tk. 5,500;
Requirements :
(i). Prepare a Profit and Loss Account for the year ended;
(ii). Prepare a Balance Sheet as at 31 December, 2009.

Answer : 10 (i).
Mercantile Bank Ltd.
Profit & Loss Account
Interest Income:
Interest Received 141,010
Add : Outstanding Interest 123,395
264,405
Less : Rebate on Bill Discounted 42,000
222,405
Less : Interest Paid 42,048
Net Interest Income 180,357
Commission Received 154,859
Discount Received 38,461
Dividend Received 86,251
Total Operating Income 459,928
Less Operating Expenses :
Salaries & Allowances 100,000
Less : GM Salary 10,000
90,000
GM Salaray 10,000
General Expenses 91,363
Deprecciation on Premises 17,500
Profit before Provision against 208,863
Classified Assets 251,065
Less : Provision for Bad Debts 5,500
Profit before Appropriation 245,565
Less Appropriation :
Statutory Reserve (20% of Profit before
Appropriation) 49,113
Interim Dividend 32,188
81,301
Retained Profit for the Year 164,264

Answer : 10 (ii). Mercantile Bank Ltd.
Balance Sheet
As at December 31, 2009
Property & Assets:
1. Cash :
Cash in Hand 341,644
Cash with Bangladesh Bank 621,858
Balance with Other Bank 224,220
1,187,722
2. Money at Call and Short Notice 279,416
3. Investments :
In Shares 248,000
In National Defence Bonds 168,000
In Govt. Securities 618,358
1,034,358
4. Loan and Advances :
Advance to Customers 1,342,120
Bill Discounted 833,483
2,175,603
5. Premises and Fixed Assets :
Premises 260,000
Less : Depreciation 17,500
242,500
6. Other Assets :
Interest and Dividend Accrued 123,395
7. Non-Banking Assets : Nil
5,042,994
Liabilities & Capital:
1. Borrowings from other Banks : Nil
2. Deposit and Other Accounts :
Deposit Accounts 685,135
Current Accounts 2,581,343
3,266,478
3. Other Liabilities :
Rebate on Bill Discounted 42,000
Provision for Bad Debts 5,500
47,500
4. Shareholders Equity :
Paid up Capital 887,500
Reserve for final Dividend 56,005
Less : Reserve for final Dividend 56,005
0
Statutory Reserve 49,113
Reserve Fund 500,000
Retained Profit :
Last year Profit 128,139
Current year Profit 164,264
292,403
1,729,016
5,042,994

JAIBB
MATHEMATICS
RATIO CALCULATION

Formulas for Various types of Ratio Calculation
(i). Current Assets Cash + Accounts Receivables + Inventory
Current Ratio = =
Current Liabilities Accounts Payable
(ii). Current Assets - Inventories - Prepaid Expenses
Quick or Acid Test Ratio =
Current Liabilities
Cash + Marketable Securities + Receivables
Or, Quick or Acid Test Ratio =
Current Liabilities
(iii). Net Sales
Receivables Turnover =
Average Receivables
Average Receivables Average Receivables
or, Receivable Turnover = 
Average Daily Sales Net Sales  365
(iv). Net Cash Provided by Operating Activities
Cash Return on Sales =
Net Sales
(v). Net Cash Provided by Operating Activities
Cash Debt Average/Coverage =
Average Liabilities
(vi). Gross Profit Net Sales - Cost of Goods Sold

Gross Profit Ratio =  100 =  100
Net Sales Net Sales
(vii). Net Income
Net Profit Ratio / Profit Margin =  100
Net Sales
(viii). Cost of Goods Sold
Inventory Turnover =
Average Inventory
(ix). Net Sales

Asset Turnover =  100
Average Assets
(x). Net Income
Return on Assets =
Average Assets
(xi). Net Income (Assumed after Tax)
Return on Common Stockholders Equity =  100
Average Common Stock
(xii). Total Debt
Debt to Total Assets Ratio =  100
Total Assets
(xiii). Net Cash Provided by Operating Activities
Current Cash Debt Coverage =
Average Current Liabilities
(xiv). Absolute Liquid Assets Cash (Assets)
Absolute Liquid Ratio = 
Absolute Liquid Liabilities Cash (Liabilities)

 Padma Company has the following comparative Balance Sheet Data :—
Padma Company
Balance Sheet
December 31
2009 2008
(Taka) (Taka)
Cash 15,000 30,000
Receivables (net) 65,000 60,000
Inventories 60,000 50,000
Plant Assets (net) 2,05,000 1,80,000
3,45,000 3,20,000
Accounts Payable 50,000 60,000
Mortgage Payable (15%) 1,00,000 1,00,000
Common Stock (10 per) 1,40,000 1,20,000
Retained Earnings 55,000 40,000
3,45,000 3,20,000
Additional Information for 2009 :
(i). Net Income was Tk. 25,000;
(ii). Sales on accounts were Tk. 4,20,000, Sales Returns and Allowances amounted to
Tk. 20,000;
(iii). Cost of goods sold was Tk. 1,98,000;
(iv). Net cash provided by operating activities was Tk. 33,000;
Requirements :
Compute the following ratios at December 31, 2009 and make comments on these :
(i). Caurrent Ratio; (ii). Acid Test Ratio;
(iii). Receivables Turnover; (iv). Cash Return on Sales;
(v). Cash Debt Average; (vi). Gross Profit Ratio;
(vii). Net Profit Ratio;
Answer (1) :
(i). Current Ratio (PjwZ AbycvZ) t [‡Kv‡bv cÖwZôv‡bi †gvU PjwZ m¤úwË‡K †gvU PjwZ `vq w`‡q fvM
Ki‡j †h AbycvZ cvIqv hvq, Zv‡K PjwZ AbycvZ e‡j|]
Current Assets
 Current Ratio =
Current Liabilities
Here, for December 31, 2009,
Current Assets = Cash + Receivables (net) + Inventories
 Current Assets = 15,000 + 65,000 + 60,000 = 1,40,000
and Current Liabilities = Accounts Payable = 50,000
1,40,000
 Current Ratio =  2.8  1
50,000
Comments : The Standard value for Current Ratio is 2:1. Here the calculated ratio is
2.8:1, which exceeds the standard. So the financial position of Padma
Company is sound and it has ability to pay the current liabilities.

(ii). Quick or Acid Test Ratio (`ª“Z ev Z¡wor AbycvZ)
[†h mKj PjwZ m¤úwË‡K Zr¶bvr bM` UvKvq iƒcvš—i Kiv hvq ev bM‡`i mgZzj¨ †m mKj PjwZ m¤úwË‡K
Quick Current Assets e‡j| Gi g‡a¨ Inventories Ges Prepaid Expenses Aš—f©y³ Kiv nq bv,
†Kbbv GUv AwZ `ª“Z bM‡` iƒcvš—i Kiv m¤¢e nq bv|]
Current Assets - Inventories - Prepaid Expenses
 Quick or Acid Test Ratio =
Current Liabilities
Cash + Marketable Securities + Receivable
Or, Quick or Acid Test Ratio =
Current Liabilities
Here, for December 31, 2009 : Qucik Assets = Cash + Receivables (net)
 Quick Assets = 15,000 + 65,000 = 80,000
Current Liabilities = Accounts Payable = 50,000
80,000
 Acid Test Ratio =  1.6 : 1
50,000
Comments : The Standard value for Acid test Ratio is 1:1. Here the calculated ratio is
1.6:1, which exceeds the standard. So the financial position of Padma
(iii). Receivables Turnover (‡`bv`vi AveZ©b AbycvZ)
Net Sales
Receivables Turnover =
Average Receivables
Here, Net Sales = Sales on Accounts - Sales Returns = 4,20,000 - 20,000
 Net Sales = 4,00,000
Average Receivables = (Receivables in 2009 + Receivables in 2008)  2
= (65,000+60,000)  2 = 62,500
4,00,000
 Receivables Turnover = = 6.4 times, i.e. 365  6.4 = 57 days
62,500
Comments : Normally credit is allowed for 60 to 90 days. This ratio shows 57 days. So
the cash collection from Receivable is satisfactory.
(iv). Cash Return on Sales
Net Cash Provided by Operating Activities
Cash Return on Sales =
Net Sales
Here, Net Cash Provided by Operating Activities = 33,000
Net Sales = 4,00,000
33,000
 Cash Return on Sales =  0.0825  8.25%
4,00,000

(v). Cash Debt Average
Cash Debt Average =
Average Liabilities
Average Liabilities = [(Accounts Payable + Mortgage Payable) in 2009
+ (Accounts Payable + Mortgage Payable) in 2008]  2
= [(50,000+1,00,000) + (60,000 + 1,00,000)]  2 = 1,55,000
33,000
 Cash Debt Average =  0.2129 times
1,55,000
(vi). Gross Profit Ratio
Gross Profit
Gross Profit Ratio =  100
Net Sales
Here, Net Sales = 4,00,000
Gross Profit = Net Sales - Cost of Goods Sold = 4,00,000 - 1,98,000
 Gross Profit = 2,02,000
2,02,000
 Gross Profit Ratio =  100  0.505  100  50.5%
4,00,000
Comments : Standard Ratio in this case is 20% to 30% and the calculated ratio is 50.5%.
So it is exceptionally satisfactory.
(vii). Net Profit Ratio
Net Income
Net Profit Ratio =  100
Net Sales
Here, Net Sales = 4,00,000 and Net Income = 25,000
25,000
 Net Profit Ratio = 100  0.0625 100  6.25%
4,00,000
Comments : Standard Ratio in this case is 5% to 10% and the calculated ratio is 6.25%,
which exceeds the lower limit of standard. This ratio is not highly
satisfatory.


 Scully Corporation’s comparative Balance Sheets are presented below :—
Scully Corporation
Balance Sheet
December, 31
2010 (Taka) 2009 (Taka)
Cash 4,300 3,700
Accounts Receivable 21,200 23,400
Inventory 10,000 7,000
Land 20,000 26,000
Building 70,000 70,000
Accumulated Depreciation (15,000) (10,000)
1,10,500 1,20,100
Common Stock 75,000 69,000
1,10,500 1,20,100
Scully’s 2010 income statement included Net Sales of Tk. 1,00,000, Cost of Goods Sold of
Tk. 60,000 and Net Income of Tk. 15,000.
Requirements : Compute the following ratios for 2010 :
(iii). Receivables Turnover; (iv). Inventory Turnover;
(v). Profit Margin; (vi). Asset Turnover;
(vii). Return on Assets; (viii). Return on Common Stockholders Equity;
(ix). Debt to Total Assets Ratio;
Answer (2) :
(i). Current Ratio
For 2010, Current Assets = Cash + Accounts Receivables + Inventory
Current Assets = 4,300 + 21,200 + 10,000 = 35,500
Current Liabilities = Accounts Payable=12,370
Current Assets 35,500
 Current Ratio = =  2.87 1
Current Liabilities 12,370
(ii). Quick or Acid Test Ratio
For 2010, Quick Assets = Cash + Accounts Receivable
 Quick Assets = 4,300 + 21,200 = 25,500
Quick Assets 25,500
 Acid Test Ratio = =  2.06 : 1

(iii). Receivables Turnover
= (21,200+23,400)  2 = 22,300
Net Sales 1,00,000
 Receivable Turnover = = = 4.48 times,
Average Receivables 22,300
i.e. 365  4.48 = 81.47 days
(iv). Inventory Turnover
Here, Cost of Goods Sold = 60,000
Average Inventory = (Inventory in 2010 + Inventory in 2009)  2
= (10,000+7,000)  2 = 8,500
Cost of Goods Sold 60,000
 Inventory Turnover = =  7.06 times
Average Inventory 8,500
(v). Profit Margin on sales / Net Profit ratio
Here, Net Income = 15,000 and Net Sales = 1,00,000
Net Income
 Profit Margin on Sales/Net Profit Ratio =  100
Net Sales
15,000
=  100  15%
1,00,000
(vi). Asset Turnover
Average Assets = (Assets in 2010 + Assets in 2009)  2
= (1,10,500+1,20,100)  2 = 1,15,300
Net Sales
 Asset Turnover =  100
Average Assets
1,00,000
=  100  0.8673  100  86.73%
1,15,300
(vii). Return on Assets
Here, Net Income = 15,000
Average Assets = (Assets in 2010 + Assets in 2009)  2
= (1,10,500+1,20,100)  2 = 1,15,300
Net Income 15,000
 Return on Assets = =  0.13 :1
Average Assets 1,15,300

(viii). Return on Common Stockholders Equity
Here, Net Income = 15,000

=  Common Stock in 2010+Common Stock in 2009   2
= (75,000+69,000)  2 = 72,000
 Return on Common Stockholders Equity
Net Income (Assumed after Tax)
=  100
15,000
=  100  20.53%
72,000
(ix). Debt to Total Assets Ratio
Here, Total Debt = Current Liabilities = 12,370
Total Assets = 1,10,500
Total Debt 12,370
 Debt to Total Assets Ratio =  100 =  100  11.19%

 Jamuna Company Ltd. has the following comparative Balance Sheet :—
Jamuna Company Ltd.
Balance Sheet
December, 31
2011 2010
Taka Taka
Cash 30,000 45,000
Accounts Receivables 95,000 90,000
Plant Assets 2,00,000 1,90,000
3,95,000 3,85,000
2011 2010
Taka Taka
Common Stock 1,50,000 1,30,000
3,95,000 3,85,000
(ii). Sales on account were Tk. 4,20,000; Sales Returns and Allowances were Tk.
20,000;
Requirements : Compute the following ratios at December 31, 2011 and make comments
on those :
(iii). Receivables Turnover; (iv). Cash Return on Sales;
(v). Cash Debt Coverage; (vi). Gross Profit Ratio;
(vii). Net Profit Ratio;
Answer (3) :
(i). Current Ratio
For December 31, 2011,
Current Assets = Cash + Accounts Receivables + Inventories
Current Assets = 30,000 + 95,000 + 70,000 = 1,95,000
Current Assets 1,95,000
Current Ratio = =  3 1
Comments : The Standard value for Current Ratio is 2:1. Here the calculated ratio is
3:1, which exceeds the standard. So the financial position of Jamuna
Qucik Assets = Cash + Accounts Receivables
 Quick Assets = 30,000 + 95,000 = 1,25,000
Quick Assets 1, 25, 000
 Quick or Acid Test Ratio = =  1.92 : 1
Current Liabilities 65, 000
Comments : The Standard value for Acid test Ratio is 1:1. Here the calculated ratio is
1.92:1, which exceeds the standard. So the financial position of Jamuna

Average Receivables Average Receivables
Receivable Turnover = 
Average Daily Sales Net Sales  365
Here, Net Sales = Sales on Accounts - Sales Returns = 4,20,000 - 20,000 = 4,00,000
 Average Daily Sales = 4,00,000  365 = 1,095.89
= (95,000+90,000)  2 = 92,500

92,500
 Receivable Turnover = = 84.40  84 days
1,095.89
Alternative Method
= (95,000+90,000)  2 = 92,500
Net Sales 4,00,000
i.e. 365  4.32  84 days
Comments : Normally credit is allowed for 60 to 90 days. This ratio shows 84 days.
So the cash collection from Receivable is satisfactory.
(iv). Cash Return on Sales
 Cash Return on Sales =
Net Sales
33,000
=  0.0825  8.25%
4,00,000
(v). Cash Debt Average
Average Liabilities = [(Accounts Payable + Mortgage Payable) in 2011
= [(65,000+1,30,000) + (75,000 + 1,30,000)]  2 = 2,00,000
 Cash Debt Average =
Average Liabilities
33,000
=  0.165 times
2,00,000
(vi). Gross Profit Ratio
Gross Profit = Net Sales - Cost of Goods Sold = 4,00,000 - 1,98,000 = 2,02,000
Gross Profit 2,02,000
 Gross Profit Ratio =  100 = 100  0.505 100  50.5%
Net Sales 4,00,000
Comments : Standard Ratio in this case is 20% to 30% and the calculated ratio is
50.5%. So it is exceptionally satisfactory.

(vii). Net Profit Ratio
Net Income = 25,000
Net Income 25,000
 Net Profit Ratio =  100 = 100  0.0625100  6.25%
Net Sales 4,00,000
Comments : Standard Ratio in this case is 5% to 10% and the calculated ratio is
6.25%, which exceeds the lower limit of standard. This ratio is not highly
satisfatory.

 Goerge Company has the following comparative balance sheet data :—
Goerge Company
Balance Sheet
December 31
2010 2011
(Taka) (Taka)
Cash 20,000 30,000
Receivables (net) 65,000 60,000
Plant Assets (net) 2,00,000 1,80,000
3,45,000 3,20,000
Common Stock (10 per) 1,40,000 1,20,000
3,45,000 3,20,000
(ii). Sales on accounts were Tk. 4,20,000, Sales Returns and Allowances amounted to
Tk. 20,000;
Requirements :
Compute the following ratios at December 31, 2011 :
(i). Caurrent Ratio; (ii). Acid Test Ratio; (iii). Receivables Turnover;
(iv). Inventory Turnover; (v). Cash Return on Sales; (vi). Cash Debt. Coverage;
(vii). Current Cash Debt Coverage;
Answer (4) :
(i). Current Ratio
For December 31, 2011, Current Assets = Cash + Receivables (net) + Inventories
Current Assets = 30,000 + 60,000 + 50,000 = 1,40,000
 Current Ratio = =  2.33  1
Qucik Assets = Cash + Receivables (net)
 Quick Assets = 30,000 + 60,000 = 90,000
Quick Assets 90,000
 Acid Test Ratio = =  1.50 : 1
= (60,000+65,000)  2 = 62,500
Net Sales 4,00,000
i.e. 365  6.4 = 57 days
(iv). Inventory Turnover
Here, Cost of Goods Sold = 1,98,000
Average Inventory = (Inventory in 2011 + Inventory in 2010)  2
= (50,000+60,000)  2 = 55,000
Cost of Goods Sold 1,98,000
 Inventory Turnover = =  3.60 times
Average Inventory 55,000
(v). Cash Return on Sales
 Cash Return on Sales =
Net Sales
44,000
=  0.11  1.10%
4,00,000
(vi). Cash Debt Coverage/Cash Debt Average
Average Total Liabilities = [(Accounts Payable + Mortgage Payable) in 2010
= [(50,000+1,00,000) + (60,000 + 1,00,000)]  2 = 1,55,000

 Cash Debt Coverage =
Average Total Liabilities
44,000
=  0.2838 times  0.3 times
1,55,000
Alternative Method
Cash
Cash Debt Coverage =
Debt (M ortgage Payable)
Here, Cash = 30,000, M ortgage Payable = 1,00,000
30,000
 Cash Debt Coverage =  0.30 times
1,00,000
(vii). Current Cash Debt Coverage
Average Current Liabilities = [(Accounts Payable in 2010)
+ (Accounts Payable in 2011]  2
= [50,000 + 60,000]  2 = 55,000
 Cash Debt Coverage =
Average Current Liabilities
44,000
=  0.80 times
55,000

 Selected comparative statement data for Willingham Products Company are presented
below. All balance sheet data are of December 31 :—
2011 2010
(Taka) (Taka)
Net Sales 76,000 72,000
Cost of goods sold 48,000 44,000
Operating Expenses 12,000 4,500
Interest Expense 700 500
Inventory 8,500 7,500
Total Assets 58,000 50,000
Total Stockholder’s equity 43,000 32,500
Current Liabilities 14,000 8,000
Requirements : Compute the following ratios :
(i). Gross Margin; (ii). Net Margin;
(iii). Asset Turnover; (iv). Return on Equity;
(v). Current Ratio; (vi). Interest Coverage;
Answer (5):
(i). Gross Margin
Gross Margin = Net Sales - Cost of Goods Sold
2011(Tk.) 2010 (Tk.)
A. Net Sales 76,000 72,000
B. Cost of Goods Sold 46,000 44,000
Gross Margin = (A-B) 30,000 28,000
(ii). Net Margin
Net Margin = (Gross Margin - Indirect Expenses)
= {Gross Margin - (Operating Expenses + Interest Expenses)}
2011(Tk.) 2010 (Tk.)
A. Gross Margin 30,000 28,000
B. Operating Expenses 12,000 4,500
C. Interest Expenses 700 500
Net Margin = {A-(B+C)} 17,300 23,000
(iii). Asset Turnover
Net Margin
Asset Turnover =
Total Assets
2011(Tk.) 2010 (Tk.)
A. Net Margin 17,300 23,000
B. Total Assets 58,000 50,000
A 0.30 : 1 0.46 : 1
Asset Turnover =  
B
(iv). Return on Equity
Net Margin
Return on Equity = 100
Total Equity
2011(Tk.) 2010 (Tk.)
A. Net Margin 17,300 23,000
B. Total Stockholder’s Equity 43,000 32,500
A  40% 71%
Return on Equity =   100 
B 
(v). Current Ratio
Current Assets
Current Ratio =
Current Liabilities
Accounts receivable + Inventory
=
Current Liabilities

2011(Tk.) 2010 (Tk.)
A. Accounts Receivable 12,000 10,000
B. Inventory 8,500 7,500
C. Cureent Liabilities 14,000 8,000
A + B 1.46 : 1 2.19 : 1
Current Ratio =  
 C 
(vi). Interest Coverage Ratio
Net Margin or Net Income
Interest Coverage Ratio =
Interest Expense
2011(Tk.) 2010 (Tk.)
A. Net Margin 17,300 23,000
B. Interest Expense 700 500
A 24.71 46
Interest Coverage Ratio =  
B

Question # 6
 The following Balance Sheet for XYZ Co. Ltd :—
XYZ CO. LTD.
Balance Sheet
Liabilities and Equity Tk. Assets Tk.
Equity Share Capital 2,00,000 Plant & Machinery 2,00,000
10% Preference Share 1,00,000 Land & Buildings 2,00,000
20% Debenture 1,00,000 Stock 1,50,000
Reserve & Surplus 1,00,000 Debtors 50,000
Long Term Loan 50,000 Cash 1,00,000
Creditors 1,00,000
Bank Overdraft 50,000
7,00,000 7,00,000
Requirements :
(i). Current Ratio (ii). Liquid Ratio
(iii). Absolute Liquid Ratio (iv). Proprietory Ratio
(v). Assets-proprietorship Ratio (vi). Debt-Equity Ratio
(a). Fixed assets to proprietor’s equity (vii). Stock to Current Assets Ratio
(b). Current assets to proprietor’s equity (viii). Stock to Working Capital Ratio
(ix). Current Assets to Working Capital Ratio (x). Current Assets to Liquid Assets
Ratio
(xi). All Long-Term funds to Working (xii). Tangible Assets to Working
Capital Ratio Capital Ratio
(xiii). Capital Gearing Ratio
Answer (6):
(i). Current Ratio
Here, Current Assets = Stock + Debtors + Cash
= 1,50,000 + 50,000 + 1,00,000 = 3,00,000
and, Current Liabilities = Creditors + Bank Overdraft
= 1,00,000 + 50,000 = 1,50,000
 Current Ratio = =  2 1
Current Liabilities 1,50,000
(ii). Liquid Ratio
Here, Liquid Assets = Debtors + Cash = 50,000 + 1,00,000 = 1,50,000
and, Liquid Liabilities = Creditors = 1,00,000
Liquid Assets 1,50,000
 Liquid Ratio = =  1.5  1
Liquid Liabilities 1,00,000
(iii). Absolute Liquid Ratio
Absolute Liquid Assets Cash (Assets)
Absolute Liquid Ratio = 
Absolute Liquid Liabilities Cash (Liabilities)
1,00,000
 Absolute Liquid Ratio =  1:1
1,00,000
(iv). Proprietory Ratio
Here, Proprietor's Equity = Equity Share Capital + 10% Preference Share
+ Reserve & Surplus
= 2,00,000  1,00,000  1,00,000  4,00,000
and, Total Assets = 7,00,000
Proprietor's Equity 4,00,000
 Proprietory Ratio = = = 0.57 : 1
(v). Assets-Proprietorship Ratio
Fixed Assets
(a). Fixed Assets to Proprietor’s Equity =
Proprietor's Equity
Fixed Assets = Plant & Machinery + Land & Buildings
 Fixed Assets = 2,00,000 + 2,00,000 = 4,00,000
Proprietor's Equity = 4,00,000
4,00,000
 Fixed Assets to Proprietor’s Equity =  1:1
4,00,000

Current Assets
(b). Current Assets to Proprietor’s Equity =
Proprietor's Equity
3,00,000
 Current Assets to Proprietor’s Equity =  0.75 :1
4,00,000
(vi). Debt Equity Ratio

Total Debts
Debt-Equity Ratio =
Proprietor's Equity
Here, Total Debts = 20% Debenture + Long term Loan + Current Liabilities
 Total Debts = 1,00,000 + 50,000 + 1,50,000 = 3,00,000
3,00,000
 Debt-Equity Ratio =  0.75 :1
4,00,000
(vii). Stock to Current Assets Ratio
Stock 1,50,000
Stock to Current Assets Ratio =   0.5 :1
(viii). Stock to Working Capital Ratio
Stock 1,50,000
Stock to Working Capital Ratio =   1:1
Working Capital 1,50,000
(ix). Current Assets to Working Capital Ratio
Here, Working Capital  Current Assets - Current Liabilities
= 3,00,000 - 1,50,000 = 1,50,000
 Current Assets to Working Capital Ratio =   2 :1
(x). Current Assets to Liquid Asset Ratio
Current Assets to Liquid Asset Ratio =   2 :1
Liquid Asset 1,50,000
(xi). All Long-term Funds to Working Capital Ratio
Here, All Long-term Funds  10% Preference share capital + 20% Debenture
+ Long Term Loan
= 1,00,000 + 1,00,0001 + 50,000 = 2,50,000
All Long-term Funds
 All Long-term Funds to Working Capital Ratio =
Working Capital
2,50,000
  1.67 :1
1,50,000

(xii). Tangible Assets to Working Capital Ratio
Here, Tangible Assets = Fixed Assets = 4,00,000
Tangible Assets 4,00,000
Tangible Assets to Working Capital Ratio =   2.67:1
(xiii). Capital Gearing Ratio
Preferred Shares + Debenture
Capital Gearing Ratio =
Equity Share Capital
1,00,000 + 1,00,000 2,00,000
   1:1
2,00,000 2,00,000

Question # 7
 Calculate the important ratios which you think significant in analyzing the financial trend
of the business :—
2003 2004
(Taka) (Taka)
Cash 15,380 29,020
Fixed Assets 2,17,200 2,19,810
3,00,000 3,00,000
Notes Payable 12,750 7,500
Debentures 1,00,000 1,00,000
Capital Stock 1,00,000 1,00,000
3,00,000 3,00,000
Sales 1,80,000 2,00,000
Answer (7):
(i). Current Ratio
Current Assets Cash + Accounts Receivables + Inventories

Current Ratio = =
Current Liabilities Accounts Payable + Notes Payable
For 2003 For 2004
Current =
15,380 + 11,260 + 56,160
=
29,020 + 11,710 + 49,460
Ratio 20,000 + 12,750 18,000 + 7,500
82,800 90,190
=  2.53 : 1   3.54 : 1
32,750 25,500

(ii). Liquid Ratio
Liquid Assets Cash + Accounts Receivables
Liquid Ratio = =
Current Liabilities Accounts Payable + Notes Payable
For 2003 For 2004
Liquid =
15,380 + 11,260
=
29,020 + 11,710
Ratio 20,000 + 12,750 18,000 + 7,500
26,640 40,730
=  0.81 : 1   1.60 : 1
32,750 25,500
(iii). Debt. Equity Ratio

Total Liabilities Accounts Payable + Notes Payable + Debentures
Debt. Equity Ratio = =
Equity Funds Retained Earnings + Capital Stock
For 2003 For 2004
Debt. =
20,000 + 12,750 + 1,00,000
=
18,000 + 7,500 + 1,00,000
Equity 67,250 + 1,00,000 84,500 + 1,00,000
Ratio 1,32,750 1,25,500
=  0.79 : 1 =  0.68 : 1
1,67,250 1,84,500
(iv). Debtors Turnover Ratio

Sales Sales
Debtors Turnover Ratio = =
Debtors Accounts Receivable
For 2003 For 2004
Debtors =
1,80,000
=
2,00,000
Turnover 11,260 11,710
Ratio  16 times (appx.)  17.08 times (appx.)
Comments :
On the basis of the above ratios, the financial trend of the business is increasing
gradually.


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ACCOUNTING FOR FINANCIAL SERVICES (AFS)

JOURNAL, LEDGER, TRIAL BALANCE

Md. Anisur Rahman (Parvej), SO (IT), ICTD, BDBL

Answer : 1 (ii). Ledger Entries

Cash Account Account No. - 01

M. Khan Capital Account Account No. - 02

Rent Expenses Account Account No. - 03

Laundry Equipments Account Account No. - 04

Note Payable Account Account No. - 05

Md. Anisur Rahman (Parvej), SO (IT), ICTD, BDBL 3

Advertisement Expenses Account Account No. - 07

Accounts Payable Account Account No. - 08

M. Khan’s Drawings Account Account No. - 09

Service Revenue Account Account No. - 10

Md. Anisur Rahman (Parvej), SO (IT), ICTD, BDBL 4

Answer : 2 (ii). Ledger Entries

Md. Anisur Rahman (Parvej), SO (IT), ICTD, BDBL 6

Advertisement Expenses Account Account No. - 04

Accounts Payable Account Account No. - 05

Salaries Expenses Account Account No. - 06

Prepaid Insurance Account Account No. - 07

Al Rossy’s Drawings Account Account No. - 08

Admission Revenue Account Account No. - 09

Insurance Expenses Account Account No. - 11

Md. Anisur Rahman (Parvej), SO (IT), ICTD, BDBL 7

Account No. Account Titles Ref.Debit (Tk.) Credit (Tk.)

Md. Anisur Rahman (Parvej), SO (IT), ICTD, BDBL 8

Md. Anisur Rahman (Parvej), SO (IT), ICTD, BDBL 9

Md. Anisur Rahman (Parvej), SO (IT), ICTD, BDBL 10

Md. Anisur Rahman (Parvej), SO (IT), ICTD, BDBL 13

Answer : 4 (iii). Trial Balance

Account No. Account Titles Ref.Debit (Tk.) Credit (Tk.)

 The following selected events and transactions occured during January-2014 :—

Answer : 5 (i). Mr. Ruhul

Prepaid Insurance 833

Answer : 6 (i). In the books of Mr. Prime

April-1 Cash 2,00,000

Ans : 6 (ii). In the books of Mr. Prime

Md. Anisur Rahman (Parvej), SO (IT), ICTD, BDBL 18

Md. Anisur Rahman (Parvej), SO (IT), ICTD, BDBL 19

Md. Anisur Rahman (Parvej), SO (IT), ICTD, BDBL 20

(iii). Purchase 50,000

(iv). Cash 70,000

Md. Anisur Rahman (Parvej), SO (IT), ICTD, BDBL 21

Mr. Rahman Drawings

10% Bank Loan

Md. Anisur Rahman (Parvej), SO (IT), ICTD, BDBL 23

ACCOUNTING FOR FINANCIAL SERVICES (AFS)

INVENTORY, LIFO, FIFO, DEPRECIATION , BEP

Md. Anisur Rahman (Parvej), SO (IT), ICTD, BDBL

Item Brand Units Unit Cost (Taka) Market Price (Taka)

(i). Amount of ending inventory for Individual Items :

(ii). Amount of ending inventory for Inventory Categories :

Light metres 1,320 + 1,265 = Tk. 2,585

(iii). Total Inventory : Tk. 1,700 + Tk. 2,585 = Tk. 4,285

Md. Anisur Rahman (Parvej), SO (IT), ICTD, BDBL 2

June-4 135 44 5,940  40 40 1,600 

Md. Anisur Rahman (Parvej), SO (IT), ICTD, BDBL 3

June-11 15 44 660 65 44 2,860 

AVERAGE COST (WEIGHTED) METHOD

Md. Anisur Rahman (Parvej), SO (IT), ICTD, BDBL 4

(i). Ending Inventory