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THE INSTITUTE OF COST AND MANAGEMENT ACCOUNTANTS OF BANGLADESH CMA JUNE, 2016 EXAMINATION
BUSINESS LEVEL
SUBJECT : GE 01. FUNDAMENTALS OF FINANCIAL ACCOUNTING.
Model Solution
Solution to the Q. No. 01
Serial No. Date Description Dr Cr
1 05/01/2016 Merchandise Inventory 50,000
Accounts Payable/ West Wood Inc. 50,000 2 05/02/2016 Accounts Receivables/ Blue Ocean Inc. 12,000
Sales Revenue 12,000
3 Cost of Goods Sold (COGS) 7,000
Merchandise Inventory 7,000
3 05/03/2016 Supply Expenses 7,000
Supply Payable 7,000
4 05/04/2016 Gasoline Expenses 9,000
Cash/ Bank 9,000
5 05/08/2016 Cash/ Bank 5,000
Sales Revenue 5,000
6 Cost of Goods Sold (COGS) 3,000
Merchandise Inventory 3,000
7 05/08/2016 Cash/ Bank 11,760
Sales Discounts 240
Accounts Receivables/ Blue Ocean Inc. 12,000
8 05/09/2016 Accounts Payable/ West Wood Inc. 50,000
Purchase Discounts 1,000
Cash/ Bank 49,000
9 05/12/2016 Accounts Receivables/ Primark Inc. 4,000
Sales Revenue 4,000
10 Cost of Goods Sold (COGS) 2,700
Merchandise Inventory 2,700
11 05/15/2016 Sales Revenue 4,000
Accounts Receivables/ Primark Inc. 4,000
12 Merchandise Inventory 2,700
Cost of Goods Sold (COGS) 2,700
13 05/31/2016 Supply Payable 7,000
Cash/ Bank 7,000
14 05/31/2016 Rent Expenses 1,300
Rent Payable 1,300
Solution to the Q. No. 02 (A)Total Costs of Machinery
Machine Cost 20,000
Import Duty 3,000
Installation Cost 1,000
Total Costs of Machinery 24,000
Note: Annual Insurance for BDT 500 is an annual expense and cannot be capitalized Annual Depreciation Charge
Total Cost of the Asset 24000
Salvage Value 6000
Total Depreciable Value 18000
Depreciation Each Year 6000 [Tk.18000/3 years= Tk.6000/yearly]
Page 2 of 5 Depreciation Schedule
Year Opening Value Depreciation Closing
Value
Accumulated Depreciation
2011 24,000 6,000 18,000 6,000
2012 18,000 6,000 12,000 12,000
2013 12,000 6,000 6,000 18,000
Journal
Serial No. Date Description Dr Cr
1 01/01/2011 Machine A/c 24,000
Cash/Bank A/c 24,000
2 12/31/2011 Depreciation Expenses 6,000
Accumulated Depreciation- Machinery 6,000
3 12/31/2011 Insurance Expenses 500
Insurance Payable/Bank A/c 500
4 12/31/2012 Depreciation Expenses 6,000
Accumulated Depreciation- Machinery 6,000
5 12/31/2012 Insurance Expenses 500
Insurance Payable/Bank A/c 500
6 12/31/2013 Depreciation Expenses 6,000
Accumulated Depreciation- Machinery 6,000
7 12/31/2013 Insurance Expenses 500
Insurance Payable/Bank A/c 500
Japan Limited's Income Statement for the year ended on 31 Dec 2011
Expenses:
Depreciation Expenses 6,000
Insurance Expenses 500
Japan Limited's Balance Sheet31-Dec-11
Non-Current Assets:
Machinery 24,000
Less: Accumulated Depreciation 6,000 18,000
Japan Limited's Income Statement for the year ended on 31 Dec 2012 Expenses:
Depreciation Expenses 6,000
Insurance Expenses 500
Japan Limited's Balance Sheet31-Dec-12 Non-Current Assets:
Machinery 24,000
Less: Accumulated Depreciation 12,000 12,000
Japan Limited's Income Statement for the year ended on 31 Dec 2013 Expenses:
Depreciation Expenses 6,000
Insurance Expenses 500
Japan Limited's Balance Sheet31-Dec-13 Non-Current Assets:
Machinery 24,000
Less: Accumulated Depreciation 18,000
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6,000 (B) Total Costs of Machinery
Machine Cost 12,000
Import Duty 6,000
Installation Cost 2,000
Total Costs of Machinery 20,000
Note: Annual Insurance for BDT 1,000 is an annual expense and cannot be capitalized Depreciation Schedule
Year Opening
Value Depreciation Closing Value Accumulated Depreciation
2011 20,000 10,000 10,000 10,000
2012 10,000 5,000 5,000 15,000
2013 5,000 2,500 2,500 17,500
Journal
Serial No. Date Description Dr Cr
1 01/01/2011 Machine A/c 20,000
Cash/Bank A/c 20,000
2 12/31/2011 Depreciation Expenses 10,000
Accumulated Depreciation- Machinery 10,000
3 12/31/2011 Insurance Expenses 1,000
Insurance Payable/Bank A/c 1,000
4 12/31/2012 Depreciation Expenses 5,000
Accumulated Depreciation- Machinery 5,000
5 12/31/2012 Insurance Expenses 1,000
Insurance Payable/Bank A/c 1,000
6 12/31/2013 Depreciation Expenses 2,500
Accumulated Depreciation- Machinery 2,500
7 12/31/2013 Insurance Expenses 1,000
Insurance Payable/Bank A/c 1,000
7 12/31/2013 Cash/Bank A/c 900
Accumulated Depreciation- Machinery 17,500
Loss on sale of Machinery 1,600
Machine A/c 20,000
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Japan Limited's Income Statement for the year ended on 31 Dec 2011 Expenses:
Depreciation Expenses 10,000
Insurance Expenses 1,000
Japan Limited's Balance Sheet 31-Dec-11
Non-Current Assets:
Machinery 20,000
Less: Accumulated Depreciation 10,000
10,000 Japan Limited's Income Statement
for the year ended on 31 Dec 2012 Expenses:
Depreciation Expenses 5,000
Insurance Expenses 1,000
Japan Limited's Balance Sheet 31-Dec-12
Non-Current Assets:
Machinery 20,000
Less: Accumulated Depreciation 15,000
5,000 Japan Limited's Income Statement
for the year ended on 31 Dec 2013 Expenses:
Depreciation Expenses 2,500
Insurance Expenses 1,000
Other Income/ Losses:
Loss on sale of Assets 1,600
Japan Limited's Balance Sheet 31-Dec-13
No entry in Balance Sheet as asset already sold Solution to the Q. No. 03
Trial Balance Adjustments Adjusted Trial Balance
Income Statement Balance Sheet
Items Debit Credit Debit Credit Debit Credit Debit Credit Debit Credit
Freight Out 4,000 4,000 - 4,000
Advertising Expenss 8,700 8,700 - 8,700
Sales Return & Allowances
23,000
23,000 -
23,000
Accounts Payable
32,900 -
32,900
32,900
Utilities Expenses 3,400 3,400 - 3,400
Purchases Discounts 4,000 - 4,000 4,000
Store Salaries Expenses 7,000 7,000 - 7,000
Rent Expenses 4,500 900 5,400 - 5,400
10% Bank Loan, (1 Apr 2015)
60,000 -
60,000
60,000
Show Room Expenses 12,000
12,000 -
12,000
Freight In 1,500 1,500 - 1,500
Page 5 of 5 Purchases Returns and
Allowances 2,500 - 2,500 2,500
Sales Discount 1,400 1,400 - 1,400
Purchases 182,000 182,000 - 182,000
Sales Return and Allowances 25,700 25,700 - 25,700
Accumulated Depreciation 14,800 - 14,800 14,800
Store Equipment 43,000 43,000 - 43,000
Prepaid Insurance 12,000 9,000 12,000 9,000 3,000
Merchandise Inventory 7,000 500 6,500 6,500
Accounts Receivable 123,000 123,000 - 123,000
Bank 67,000 67,000 - 67,000
Sales 351,000 - 351,000 351,000
Capital 74,500 - 74,500 74,500
Drawings 14,500 14,500 - 14,500
Loss on inventory 500 500 - 500
Insurance Exp. 9,000 9,000 - 9,000
Rent Payable 900 - 900 900
Interest Exp. 4,500 4,500 4,500
Interest Payable 4,500 4,500 4,500
Totals
539,700
539,700
14,900
14,900
554,100
554,100
288,100
357,500
257,000
187,600
Net Income 69,400 69,400
Total 357,500 357,500 257,000 257,000
Solution of Q. No. 4.
Tusuka Incorporation Payroll register
For the month of October 2015 Sl
. Employee Designation
Gross earnings Deduction Net
Earnings Basic Overtime Bonus Holiday
All
Comm Total IT PF Total
Deduction
1 A Worker 20,000 1,000 800 400 22,200 7,000 1,200 8,200 14,000
2 B Foreman 5,000 400 200 100 5,700 1,300 400 1,700 4,000
3 C Office Clerk 4,000 - 100 4,100 800 300 1,100 3,000
4 D Salesman 8,000 600 200 100 8,900 2,200 600 2,800 6,100
Total 37,000 2,000 1,000 800 100 40,900 11,300 2,500 13,800 27,100
Sl. Particulars Tk. Tk.
i Payroll
-Accrued payroll
40,900
40,900 ii Accrued Payroll
- Voucher payable - Income tax payable - PF Payable
40,900
27,100 11,300 2,500 iii Voucher payable
- cash
27,100
27,100 iv Employee benefit expenses
-PF Payable
4,000
4,000 v Factory wages
Office Salaries Sales salaries - Payroll
27,900 4,100 8,900
40,900
= THE END =
