EUSTRATION
Equivalents:
Purchase of Inventory for cash.
Purchase of goods on credit.
iii) Sale of Goods costing 310,000 for 12,000 for cash.
iv) Sale of Goods on Credit.
Purchase of a fixed asset by issue of shares.
(vi) Sale of a fixed asset (book value *15,000) at a loss of 5,000.
(C.B.S.E.2016
(viii) Cash paid to Trade Payables.
(ix) Shares issued for Cash.
(x) Buy-back of Equity Shares.
(xi) Issue of fully paid bonus shares.
(xii) Writing off bad debts against the provision for Doubtful Debts.
(xiii) Declaration of final dividend.
(xiv) Declaration of interim dividend.
(xv) Cash deposited into Bank.
(xvi) Cash withdrawn from Bank.
xvii) Purchase of Marketable Securities for Cash.
viii) Sale of Current Investments for Cash at par.
(C.B.S.E.2010
State which of the following would result in inflowloutflow of Castro
(C.B.S.E. Sample Paper 2010
(vii) Cash received from Trade Receivables 9,000 and allowed discount
(C.B.S.E. Sample Paper 2010
Answers
Explanation:
3. Profit = sAle- cost
= 12000-10000
= 2000 profit
Journal entry
Ram ac dr 12000
Sale ac Cr 12000
(Goods sold to ram on credit).
4. When goods are purchased for cash the stock would increase and the cash balance would decrease and so there would be no effect on the current ratio.
When plant is acquired on account the fixed asset would increase and there would be increase in the creditors amount, hence the current ratio would decrease.
When goods are sold on credit the stock would decrease and the debtors would increase and hence there would be no effect on current ratio.
When debentures are converted into equity capital there would be no changes in current assets and current liabilities and so no change in current ratio.
5. Thumbnail explanation:
Dr. Loss (expense)
Dr. Cash
Dr. Accumulated Depreciation
Cr. Asset (original cost)
This assumes you took a loss on the asset (recognized an expense) and removed the asset from your books, and that you got cash for it. The debits of course must equal the credit.
6.A trade payable is an amount billed to a company by its suppliers for goods delivered to or services consumed by the company in the ordinary course of business. Any amounts owed to suppliers that are immediately paid in cash are not considered to be trade payables, since they are no longer a liability. .
7.When the company asks the total par value of at the time of application; it is called the issue of shares on a lump sum basis. E.g., if a share of Rs. 20 is issued at Rs. 20 and the whole amount is collected with the application, it is called the issue of share at par on a lump sum basis..
8.Stock buybacks refer to the repurchasing of shares of stock by the company that issued them. A buyback occurs when the issuing company pays shareholders the market value per share and re-absorbs that portion of its ownership that was previously distributed among public and private investors.
9.