Company: Conceptual and Theoretical Foundation BBS
Brief Answer
- What do you mean by subscribed capital?
- What do you mean by share capital?
- Write any two difference between Equity share and Preference share.
- Explain the advantages of public limited company.
Descriptive Answer Questions
- Clarify the meaning of preference share and mention any two difference between preference share and equity share.
- Differentiate between equity share and debenture.
- Write in brief about the equity share.
- Define preference share capital and write about the different types of preference share capital.
Analytical/ Long Answer Questions:
- Differentiate between public company and private company.
- Explain the meaning and types of public limited company.
- Explain the necessary documents which must be submitted by public company to have a company registration.
- Write briefly about preference share and differentiate it with common share.
Financial Statements of a Company
Theoretical Questions
Brief Answer Questions
- Write in brief the objectives of work sheet.
- Write in brief the objectives of financial statements.
- Differentiate between holding gain and operating gain.
- Write any two features of financial statements of a company.
- Differentiate between operating and non-operating expenses with example.
Numerical Problems
Descriptive Answer Questions
- The following are the income statement and the balance sheet at the end of the last year:
Income statement Rs. Rs. |
Sales: 400,000
Less: Cost of goods sold: Purchase 200,000 Closing stock (50,000) 150,000 Gross profit 250,000 Add: Discount secured 10,000 260,000 Less: Operating and other expenses: Salary 60,000 Rent 30,000 Prepaid rent (2,000) Discount allowed 5,000 Depreciation on furniture (10% of Rs. 120,000) 12,000 Interest on loan 6,000 Outstanding interest on loan 4,000 115,000 |
Net profit 145,000 |
Balance sheet
Liabilities Rs. Assets Rs. |
Share capital 500,000 Furniture 120,000
Net Profit 145,000 Less: Depreciation 12,000 10% Bank loan 100,000 108,000 Creditors 50,000 Debtors 85,000 Outstanding interest 4,000 Closing stock 50,000 Prepaid rent 2,000 Bank 354,000 Cash 200,000 |
7,99,000 7,99,000 |
Analytical/ Long Answer Questions
7. Trial balance of a company is given below:
Particulars Debit (Rs.) Credit (Rs.) |
Bank 70,000
Cash 25,000 Machinery 400,000 Furniture 187,000 Sales 650,000 Purchase 425,000 Share capital 500,000 8% debentures 150,000 Debtors 150,000 Creditors 110,000 Salaries 50,000 Wages 60,000 Discount 15,000 Interest 12,000 Electricity charges 16,000 |
14,10,000 14,10,000 |
Additional information:
a. Closing inventory is Rs.60,000
b. Depreciation is 10% on machinery and 15% on furniture.
c. Outstanding salary is Rs.12,000.
d. Prepaid wages is Rs.15,000.
Required: (1) Income Statement and Balance Sheet using worksheet (2) Cash flow statement
8. The ledger balances of newly established business co. are given below:
Capital Rs.400,000 Interest on loan Rs.5,000
10% loan 200,000 Discount allowed 3,000 Fixed assets 200,000 Salaries 72,000 Purchase 250,000 Office expenses 30,000 Sales 400,000 Rent 50,000 Debtors 20,000 Cash at bank 420,000 Creditors 50,000 |
Adjustments:
a. Closing stock Rs.50,000.
b. Prepaid rent Rs.2,000.
c. Interest on loan payable for half year.
d. Charge depreciation of fixed assets @ 10% p.a.
Required: (1) Income statement and Balance sheet using worksheet (2) Cash flow statement.
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