Professional Documents
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Suggested Answers
Foundation Examinations – Spring 2014
(b) Net realisable value is the estimated selling price in the ordinary course of business
less the estimated costs of completion and the estimated costs necessary to make the
sale. [IAS 2(6)]
Fair value is the price that would be received to sell an asset or paid to transfer a
liability in an ordinary transaction between market participants at the measurement
date. [IAS 2(6)]
Note:
No entries were required for following:
Entry in respect of casting error of Rs. 11,430.
Entry in respect of incorrect posting of cheque no. 765 in bank statement.
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INTRODUCTION TO FINANCIAL ACCOUNTING
Suggested Answers
Foundation Examinations – Spring 2014
Ans.3 (a) Trading account for the year ended 31 December 2013
Closing inventory (3.4+8.0) (W.1) 11.40
Inventory loss due to fire
(12+6+8) – 11.4 14.60
Profit and loss account for the year ended 31 December 2013
Inventory loss due to fire (14.60-0.9) 13.70
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INTRODUCTION TO FINANCIAL ACCOUNTING
Suggested Answers
Foundation Examinations – Spring 2014
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INTRODUCTION TO FINANCIAL ACCOUNTING
Suggested Answers
Foundation Examinations – Spring 2014
Debtors
Balance opening 170,000 Cash 300,000
Credit Sales (1,800,000–540,000) 1,260,000 Bank 1,000,000
Balance 130,000
1,430,000 1,430,000
Creditors
Payments 1,375,000 Balance opening 310,000
Balance 425,000 Purchases 1,490,000
1,800,000 1,800,000
Balance sheet
Capital / Liabilities Assets
Rs. Rs.
Capital 480,000 Building 285,000
Add: profit for the year 114,000 Furniture 57,000
Less: drawings (75,000) Car 72,000
519,000 Stock 250,000
Loan 152,500 Debtors 130,000
Creditors 425,000 Cash in hand 229,000
Accrued expenses 50,000 Cash at Bank 123,500
1,146,500 1,146,500
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INTRODUCTION TO FINANCIAL ACCOUNTING
Suggested Answers
Foundation Examinations – Spring 2014
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INTRODUCTION TO FINANCIAL ACCOUNTING
Suggested Answers
Foundation Examinations – Spring 2014
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INTRODUCTION TO FINANCIAL ACCOUNTING
Suggested Answers
Foundation Examinations – Spring 2014
28,800 28,800
(THE END)
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