(4)
7. A and B share profits in the ratio of 3:2. Their drawings for the
year ending 31st March, 2016 were as under:
Rs.
B
Rs.
1st May, 2015
6,000 | 1st April, 2015
5,000
30th November, 2015 8,000 31st August, 2015 6,000
31 January, 2016 7,000 31st October, 2015 4,000
1st February, 2016 2,000
315 March, 2016 3,000
Calculate interest on drawings @ 15% p.a. for the year ended
on 31st March, 2016 and pass the necessary journal entries for
the same.
Answers
Answer:
3. Enfield plc's financial projections show an expected cash deficit in two months' time of $8 million, which will last for approximately three months. It is now I November 2004. The treasurer is concerned that interest rates may rise before I January 2005 , Protection is required for two months.
The treasurer can lock into an interest rate today, for a future loan. The company takes out a loan as normal, i.e. the rate it pays is the going market rate at the date the loan is taken out. It will then receive or pay compensation under the separate FRA to return to the locked-in rate.
A 2-5 FRA at 5.00 —4.70 is agreed.
• The agreement starts in 2 months' time and ends in 5 months' time.
• The FRA is quoted as simple annual interest rates for borrowing and lending, e.g.
5.00 -4.70.
• The borrowing rate is always the highest.
Calculate the interest payable if in two months' time the market rate is: (a) 7% or (b) 4%,
Explanation:
3. Enfield plc's financial projections show an expected cash deficit in two months' time of $8 million, which will last for approximately three months. It is now I November 2004. The treasurer is concerned that interest rates may rise before I January 2005 , Protection is required for two months.
The treasurer can lock into an interest rate today, for a future loan. The company takes out a loan as normal, i.e. the rate it pays is the going market rate at the date the loan is taken out. It will then receive or pay compensation under the separate FRA to return to the locked-in rate.
A 2-5 FRA at 5.00 —4.70 is agreed.
• The agreement starts in 2 months' time and ends in 5 months' time.
• The FRA is quoted as simple annual interest rates for borrowing and lending, e.g.
5.00 -4.70.
• The borrowing rate is always the highest.
Calculate the interest payable if in two months' time the market rate is: (a) 7% or (b) 4%,