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Question
JW Ltd. was a company manufacturing geysers. As a part of its long-term goal for an expansion, the company decided to identify the opportunity in rural areas. The initial plan was rolled out for Bhiwani village in Haryana. Since the village did not have a regular supply of electricity, the company decided to manufacture solar geysers. The core team consisting of the Regional Manager, Accountant and the Marketing Manager was taken from the Head Office and the remaining employees were selected from the village and neighbourhood areas. At the time of preparation of financial statements, the accountant of the company fell sick and the company debuted a junior accountant temporarily from the village for two months. The Balance Sheet prepared by the junior accountant showed the following items against the Major Heads and Sub-heads mentioned which were not as per Schedule III of the Companies Act, 2013.
| Items | Major Head/Sub-Head |
| Loose Tools | Trade Receivables |
| Cheques in Hand | Current Investments |
| Term Loan from Bank | Other Long-term Liabilities |
| Computer Software | Tangible Fixed Assets |
Identify any two values that the company wants to communicate to the society. Also, present the above items under the correct major heads and sub-heads as per Schedule III of the Companies Act, 2013.
Solution
The values being communicated are:
1. Sustainable use of Energy & Environment Protection
2. Rural Development & Employment Generation
| Item | Major Heads | Sub Head |
| Loose tools | Current Assets | Inventories |
| Cheques in hand | Current Assets | Cash & Cash Equivalents |
| Term Loan from Bank | Non- Current Liabilities | Long-Term Borrowing |
| Computer Software | Non- Current Assets | Fixed Assets-Intangible Assets |
APPEARS IN
RELATED QUESTIONS
Capital balance is ascertained by preparing....................................
- Statement of affairs
- Cash account
- Drawing account
- Debtor’s account
State any one limitation of Analysis of Financial Statement.
State the significance of Analysis of Financial Statements to the ‘Lenders’.
State true or false with reason.
Gross Profit depends upon Net Sales.
State whether following statement is true or false :
Analysis of financial statement is a tool but not a remedy.
State whether following statement is true or false :
Government is not interested in analysis of financial statement.
Select the appropriate answer from the alternatives given below & rewrite the completed statement:
The methodical classification of financial statement is called _____________.
Select the appropriate answer from the alternatives given below & rewrite the completed statement
Bills payable is _____________.
Select the appropriate answer from the alternatives given below & rewrite the completed statement
From financial statement analysis, the creditors are interested to know _____________.
Answer the following in brief :
What do you mean by analysis of financial statements?
Answer the following in brief :
State any three limitations of Analysis of financial statement.
Explain the limitations of analysis of financial statements.
The Common Size Statement requires _________.
State true or false with reason.
Financial Statement includes only Balance Sheet.
Which of the following statements is not true?
The term fund’ refers to
Convert following Trading Account and Profit and Loss Account into Vertical Income Statement:
| Dr. | Trading, Profit and Loss Account for the year ended as on 31st March,2020 |
Cr. | |
| Particulars | Amount ₹ | Particulars | Amount ₹ |
| To Opening stock | 20,000 | By Sales | 1,20,000 |
| To Purchases | 90,000 | By Closing Stock | 30,000 |
| To Carriage inward | 500 | ||
| To Wages | 10,000 | ||
| To Gross Profit c/d | 29,500 | ||
| Total | 1,50,000 | Total | 1,50,000 |
| To Office expenses | 12,500 | By Gross Profit b/d | 29,500 |
| To Selling expenses | 10,000 | ||
| To Finance expenses | 3,000 | ||
| To Net Profit c/d | 4,000 | ||
| 29,500 | 29,500 | ||
Convert the following Trading and Profit and Loss Account into Vertical Income Statement:
| Dr. | Trading, Profit and Loss Account (for the year ended 31st March, 2020) |
Cr. | |
| Particulars | Amount (₹) |
Particulars | Amount (₹) |
| To Opening stock | 50,000 | By Sales | 6,00,000 |
| To Purchases | 4,50,000 | By Closing Stock | 1,50,000 |
| To Carriage | 20,000 | ||
| To Direct expenses | 30,000 | ||
| To Wages | 50,000 | ||
| To Gross Profit c/d | 1,50,000 | ||
| Total | 7,50,000 | 7,50,000 | |
| To Office expenses | 62,500 | By Gross Profit b/d | 1,50,000 |
| To Finance expenses | 15,000 | ||
| To Selling expenses | 50,000 | ||
| To Net Profit c/d | 22,500 | ||
| Total | 1,50,000 | 1,50,000 | |
