Assignment Questions – MAA – MGT402

Problem 1 (10 marks)

Record the following transactions in the Journal of Mr.Radhakrishnan and post them in the
ledger and prepare trial balance.
Jan 2018
1 Radhakrishnan commenced business with cash Rs.15,00,000.
3 Paid into Bank Rs.5,00,000
5 Bought goods for Rs.3,60,000
7 Paid travelling charges Rs.5,000
10 Sold goods for Rs.2,50,000
15 Sold goods to Balan Rs.2,40,000
20 Purchased goods from Narayanan Rs.2,10,000
25 Withdrew cash Rs.60,000

Problem 2 (10 marks)

Show the Accounting Equation on the basis of the following transactions and prepare a
Balance Sheet.
Rs.
1. Maharajan commenced business with cash 1,00,000
2. Purchased goods for cash 70,000
3. Purchased goods on credit 80,000
4. Purchased furniture for cash 3,000
5. Paid rent 2,000
6. Sold goods for cash (costing Rs.45,000) 60,000
7. Paid to creditors 20,000
8. Withdrew cash for private use 10,000
9. Paid salaries 5,000
10. Sold goods on credit (cost price Rs.60,000) 80,000

Problem 3 (10 marks)

Classify the following into capital and revenue
1. Rs.5,600 spent on replacement of a part of a plant.
2. Rs.1,500 spent on complete overhauling of a second hand machinery just bought.
3. Carriage expenses Rs.230.
 4. Profit on sale of asset Rs.700.
5. Rs.250 loss on sale of furniture.
6. Rs.12,000 spent on purchasing a patent right.
7. Freight charges paid on new plant amounts to Rs.700.
8. Repairs of Rs.575 for furniture.
9. Rs.5,000 spent towards expenses connected with rain water harvesting as per
Government orders.
10. Rs.7,500 spent towards initial advertising expenses.

Problem 4 (10 marks)

The following ratios of ABC Ltd. and their corresponding Industry Standards are given as
follows:-
Ratios ABC Ltd. Industry Standards

Current ratio 1.75 2.10

Liquid ratio 0.85 2.25

Stock to Working Capital 45% 20%

Inventory Turnover 6.5 8.2

Debt Collection Period 45 days 30 days

Return on Assets 9.2% 10.7%

Earnings per share Rs. 3.50 Rs. 2.75

You are required to comment on the financial position and performance of ABC Ltd.