Financial Statement Problems and Solutions
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Problem # 1:
Prepare Adjustment Entries, Adjusted Trial Balance and three Informal Financial Statements excluding cash flow statement.
Adjustments
- Inventory on 31st, December 2015 was valued at Rs. 68,000.
- Depreciation Machinery by 10 % and Amortization of Patents by 20 %.
- Unexpired Insurance at the end financial year was Rs. 2,000.
- Wages includes Rs. 7,000 paid as advance to employees (Prepaid Wages Debit).
Solution # 1 Adjustment Entries
Solution # 2 Adjusted Trial Balance
Solution # 3 Three Financial Statements (Informal)
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References
Ramchandran, N., & Kakani, R. K. (2007). Financial Accounting for Management. (2nd, Ed.) New Delhi: Tata McGraw Hill.
Sehgal, A., & Sehgal, D. (n.d.). Advanced Accountancy (Vol. I & II). New Delhi: Taxmann Publication Pvt. Ltd.
Shukla, M. C., Grewal, T. S., & Gupta, S. C. (2008). Advanced Accountancy (Vol. I & II). New Delhi: S Chand & Co.
Weygandt, J. J., Kimmel, P. D., & Kieso, D. E. (2012). Accounting Principles (10th ed.). Hoboken: John Wiley & Sons, Inc.
Williams, M., & Bettner, H. (1999). Accounting (The basic for business decisions). (11th, Ed.) USA: Irwin McGraw- Hill.
Thanks for finally writing about Financial Statement Problems and Solutions.
some time we see Acc.dep. marcahniry add in capital
and some time deprication machainery is less in Assets side??????????????????????????????????????????
acc. dep. is an expense. they mentioned 10 and 20% on current year. so expense will affect on income statement and value decrease in asset side.
here they doing indirectly, they never reducing from asset side and adding on liability side. thats effect same, but will make confuse us.
Is good
What’s up, after reading this awesome piece of writing i am
also delighted to share my experience here with
colleagues.
Aren’t COGS = Opening inventory + New Purchase – Closing inventory?
Why the opening inventory is not included in the income statement?
yes me also wonder abt that. may be they consider that way is classical.
here they donot add opening stock as well as closing stock. may be they want to show their boss big profit than actual.
but boss cheated by them. its vanishing on balance sheet..
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