1) The following are the information of Wayne enterprises.
Prepare an income statement for 31 March 2025
Amount
Particulars
(₹) • Closing Inventory as on 31 March 2025 was valued at
Sales Revenue 12,00,000 ₹1,80,000.
Sales Returns 40,000 • Salaries outstanding amounted to ₹10,000.
Opening Inventory 1,50,000 • Rent prepaid amounted to ₹5,000.
• Create a provision for doubtful debts at 5% of debtors.
Purchases 6,20,000 Debtors amounted to ₹4,00,000.
Purchase Returns 20,000 • Advertising expenses include ₹15,000 relating to the next
Supervisor’s salary 90,000 financial year.
Salaries 1,20,000
• Depreciation is to be provided at: Machinery: 10% on cost ;
Rent and Rates 60,000 Office Equipment: 15% on cost
Carriage Inwards 30,000 • Interest on loan for the last 3 months is outstanding.
Advertising Expenses 45,000 • Goods costing ₹12,000 were withdrawn by the proprietor for
personal use.
Bad Debts 25,000
Provision for Doubtful Debts
18,000
(Opening)
Interest on Loan 20,000
Depreciation on Machinery 50,000
Office Equipment 3,00,000
Machinery 5,00,000
2) From the particulars prepare a Balance Sheet of Zootopia Ltd.
Particulars Amount (₹)
Equity Share Capital 10,00,000
General Reserve 2,00,000
Profit & Loss A/c (Opening) 1,20,000
12% Debentures 4,00,000
Creditors 3,50,000
Outstanding Expenses 30,000
Land and Building 8,00,000
Plant and Machinery 6,00,000
Furniture 1,50,000
Inventory 2,40,000
Trade Debtors 4,20,000
Provision for Doubtful Debts 20,000
Cash at Bank 1,10,000
Cash in Hand 30,000
• Depreciation to be provided at: Plant and Machinery: 10% ; Furniture: 15%
• Closing inventory was overvalued by ₹20,000.
• Provide interest on debentures for the last 3 months, unpaid.
• Create a provision for doubtful debts at 5% of trade debtors.
• Outstanding expenses include ₹10,000 relating to wages.
• Proposed dividend at 10% on equity share capital.
• Income tax provision of ₹50,000 to be made.
3) A company currently produces 10,000 units of a product per year.
The cost and selling price structure is as follows:
Selling price per unit: ₹400
Variable cost per unit: ₹240
Fixed costs: ₹9,60,000
Management is considering a cost control measure to reduce variable cost by 20%.
However, this measure will increase fixed cost by ₹80,000 per year.
You are required to:
a) Compute the current Break-Even Point (in units).
b) Compute the new Break-Even Point after cost-control implementation.
c) Advise whether the cost-control measure is beneficial if the company expects
to maintain sales of 20,000 units.
4) ABC Manufacturing Ltd. is preparing its cash budget for the months of January, February,
and March 2025. The following information is available:
1. Projected Sales (₹):
o November 2024: 6,00,000
o December 2024: 6,50,000
o January 2025: 7,00,000
o February 2025: 7,50,000
o March 2025: 8,00,000
o April 2025: 8,50,000
2. Sales are 20% cash sales, and 80% are credit sales collected the following way:
o 50% in the month after sale
o 40% in the second month
o 10% is uncollected (bad debts)
3. Purchases each month are 60% of next month’s credit sales.
o Payments for purchases are made one month after purchase.
4. Wages are ₹70,000 per month (paid in the same month).
5. Other operating expenses are ₹40,000 per month (paid one month later).
6. The company plans to purchase equipment worth ₹1,20,000 in February, payable
immediately.
7. The opening cash balance on 1 January 2025 is ₹5,50,000.