Q. 1 Give
a short answer to the following question? (5x4=20)
i. What
is meant by non-profit making cancers?
Non-profit making cancers refer to those organizations that are not organized and operated
for the purpose of making a profit or generating income. These organizations are usually established to fulfill a public purpose, such as providing a service or advocating for a cause. Non-profit making organizations are typically funded by donations, grants, and other forms of philanthropic support. Examples of non-profit making organizations include charities, religious organizations, public libraries, and civic clubs.Dear Student,
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Non-profit making organizations are
exempt from some taxes and are allowed to issue tax-deductible receipts for
donations. Because they are not motivated by the need to make a profit, they
often have more freedom to advocate for causes or provide services that may not
be profitable or that may have a social benefit.
Non-profit making organizations often
face challenges in raising funds, as they are limited in the ways that they can
generate income. This can make it difficult for them to sustain long-term
operations and to cover operational costs. Additionally, because non-profit
making organizations are not motivated by the need to make a profit, they may
not be able to pay competitive salaries to their staff or attract top talent.
ii. What
is special subscription?
Special Subscriptions are subscriptions
to a specific product or service that offer additional benefits over a standard
subscription. These additional benefits can range from discounts, exclusive
access to content, or even free gifts. Special subscriptions are usually
offered by companies to reward their loyal customers or to draw in new ones.
They can be offered on a one-time or ongoing basis, depending on the company's
needs. Special subscriptions are designed to provide customers with additional
value for their money, and are often used by companies to increase customer
loyalty. For example, a company may offer a special subscription that gives
customers a discount on their next purchase, or they may give customers
exclusive access to a special product or event. Special subscriptions often
come with additional features or benefits, such as early access to new products
or services, or discounts on additional purchases. They can also be used to
drive customer loyalty, as customers may feel more inclined to return for
future purchases if they receive exclusive offers or discounts. Special
subscriptions can be a great way for companies to reward their customers,
increase customer loyalty, and attract new customers.
iii. What
do you mean by legacy?
A legacy is something that is passed down
from one generation to the next. It can be physical items, such as heirlooms,
or intangible items, such as values and beliefs. Legacies are often associated
with wealth, but they can also be created by passing on knowledge and
experiences. For example, a grandparent may tell stories to their grandchild,
passing on their life lessons and values. A legacy can also include the effects
of an individual’s life and work, such as a famous artist’s body of work or a
scientist’s discoveries. In some cases, legacies can have a positive impact and
help to shape the future, while in other cases, they can have a negative
impact. Either way, legacies are an important part of our history and culture.
They can remind us of what came before and help us to shape our own lives and
experiences.
iv. What
is statement of affairs?
Statement of affairs is a financial
statement of the company that provides a snapshot of the company’s financial
position at a given point of time. It is usually prepared by the auditors and
is presented to the shareholders and other stakeholders of the business. It is
an essential document for investors and creditors to assess the financial
health of the business.
A statement of affairs consists of
assets, liabilities, and capital of the company. Assets include items such as
cash, investments, tangible fixed assets, intangible assets, receivables,
inventories, etc. Liabilities include items such as loans, overdrafts,
payables, etc. Capital includes the equity capital, retained earnings, etc.
This statement also includes the details of the company’s reserves and
provisions.
The statement of affairs helps in
understanding the short-term and long-term liquidity of the company. It also
helps in assessing the solvency of the company. It is a useful tool for
investors and creditors to assess the health of the company and decide whether
to invest in or lend to the company.
The statement of affairs also provides
important information to the management of the company. This includes the
details of the assets and liabilities, which can help the management to
determine the best use of their resources and plan for the future of the
business.
v. What
is double entry system?
Double entry system is an accounting
system in which every transaction is recorded twice in different accounts. This
method of accounting helps to ensure that the accounts are accurate and
complete. It also helps to maintain the integrity of the financial data.
Double entry system is based on the
concept of debits and credits. Each transaction is entered in two accounts,
with the total amount recorded as a debit in one account and as a credit in the
other. This helps to ensure that the accounts are balanced and all transactions
are recorded accurately.
The double entry system is a key part of
the Generally Accepted Accounting Principles (GAAP). It is used by businesses
of all sizes and industries to ensure their financial records are accurate and
complete. The system also ensures that transactions are recorded in the correct
accounts and that all transactions are properly documented.
Double entry system also helps to prevent
fraud, as all transactions are recorded in two accounts. This helps to prevent
fraudulent activities such as misappropriation of funds and false reporting of
financial results.
The double entry system is a key part of
the accounting process, and it is important for businesses to understand how to
use this system correctly in order to ensure their financial records are
accurate and complete.
Q. 2 Mr.
Furqan started a sole proprietorship business.
The business is newly established and Mr. Furqan hired an Accountant for
keeping the journal updated. Suppose you
are the Accountant of Mr. Furqan business, prepare the journal book for the month
of June, 2019. (20)
You are also required to post journal
entries into the ledger and prepare the trial balance. Detail of the
transactions during June, 2019 are given as follows:
April 1. Mr.
Furqan commenced business with Cash of Rs.2,200,000/- Building
Rs.7, 500, 000/-
2.
Purchased goods with cash Rs.400, 000/-
5. Purchased
Furniture from Miss Hareem Rs. 220,000/-
8. Sold
goods to Mr. Majid Rs. 220,000/-
17. Goods
returned to Miss Hareem Rs. 10,000/-
18. Stationary
Purchased Rs.20, 000/-
22. Returned
goods to Mr. Majid Rs.12, 000/-
28. Utility
bills paid for the month Rs. 70,000/-
30.Salaries paid for the month Rs.
70,000/-
Solution:
JOURNAL ENTRIES
1. Cash 2,200,000
Building 7,500,000
Dr. Cash 2,200,000
Dr. Building 7,500,000
Cr. Capital 9,700,000
2. Cash 400,000
Dr. Cash 400,000
Cr. Purchases 400,000
5. Furniture 220,000
Dr. Furniture 220,000
Cr. Cash 220,000
8. Sales 220,000
Dr. Accounts Receivable 220,000
Cr. Sales 220,000
17. Cash 10,000
Dr. Cash 10,000
Cr. Purchases Return 10,000
18. Cash 20,000
Dr. Cash 20,000
Cr. Stationary 20,000
22. Accounts Receivable 12,000
Dr. Accounts Receivable 12,000
Cr. Cash 12,000
28. Cash 70,000
Dr. Cash 70,000
Cr. Utilities 70,000
30. Cash 70,000
Dr. Cash 70,000
Cr. Salaries 70,000
LEDGER ACCOUNTS
Cash
Dr.
April 1 - 2,200,000
April 2 - 400,000
April 5 - 220,000
April 17 - 10,000
April 18 - 20,000
April 22 - 12,000
April 28 - 70,000
April 30 - 70,000
Cr.
Building
Dr.
April 1 - 7,500,000
Cr.
Capital
Dr.
April 1 - 9,700,000
Cr.
Purchases
Dr.
Cr.
April 2 - 400,000
April 17 - 10,000
Furniture
Dr.
April 5 - 220,000
Cr.
Accounts Receivable
Dr.
April 8 - 220,000
Cr.
April 22 - 12,000
Sales
Dr.
Cr.
April 8 - 220,000
Stationary
Dr.
Cr.
April 18 - 20,000
Utilities
Dr.
Cr.
April 28 - 70,000
Salaries
Dr.
Cr.
April 30 - 70,000
TRIAL BALANCE
ASSETS
Cash 2,974,000
Building 7,500,000
LIABILITIES
Capital 9,700,000
EQUITY
REVENUE
Accounts Receivable 208,000
Sales 220,000
EXPENSES
Purchases 410,000
Furniture 220,000
Stationary 20,000
Utilities 70,000
Salaries 70,000
TOTAL 12,092,000
12,092,000
Q. 3 Define
journal and also explain in detail the objectives and importance of journal in
daily life of business. (20)
Journal is defined as a book or record of
financial transactions and accounts maintained on a daily basis in a business
or organization. It is a record of all the financial transactions that occur in
a business or organization on a day-to-day basis. It is the first step in the
recording process and is the foundation of the accounting system of a business.
A journal is used to record all the
transactions that take place in the business. It is important for keeping track
of the financial position of the business. This helps in making informed
decisions about the company’s operations. It also serves as an important tool
for preparing financial statements, such as an income statement, balance sheet,
and cash flow statement.
Objectives of Journal
The main objective of the journal is to
provide an accurate and systematic record of all the financial transactions of
a business in a chronological order. It is a fundamental tool for proper
bookkeeping and accounting. A journal also helps in understanding the financial
position of the business. It is also used to analyze the performance of the
business over a period of time.
The journal is also used to provide
information regarding the financial transactions of the business to the external
stakeholders such as investors, creditors, and lenders. This is important for
assessing the financial health of the business.
Importance of Journal
The journal is an important part of
bookkeeping and accounting. It helps in maintaining an accurate and systematic
record of all the financial transactions of the business. It is also used to
analyze the financial performance of the business over a period of time.
The journal is also important for
preparing the financial statements of the business. It is used to provide
information regarding the financial position of the business to the external
stakeholders. This is important for assessing the financial health of the
business.
The journal is also used to detect errors
and irregularities in the financial records of the business. This helps in
taking corrective measures to avoid any financial losses.
The journal is also used to track the
flow of funds in and out of the business. This helps in understanding the
financial position of the business and making informed decisions.
The journal is also used to provide
information regarding the financial transactions of the business to the
external stakeholders. This is important for assessing the financial health of
the business.
Journal is an important part of bookkeeping
and accounting. It is used to provide an accurate and systematic record of all
the financial transactions of a business in a chronological order. It is also
used to analyze the financial performance of the business over a period of time
and to provide information regarding the financial position of the business to
the external stakeholders. The journal is also used to detect errors and
irregularities in the financial records of the business and to track the flow
of funds in and out of the business.
Q. 4 On
1st July 2015, Zahid purchased Machinery for Rs. 600,000. Depreciation is to be
charged @ 10% on straight line method and reducing balance method each year. On
31st October, 2017 Machinery was sold for Rs. 140,000 as they became useless.
On the same date he purchased new machinery for Rs. 200,000. (20)
Required: Prepare
machinery accounts from 2015 to 2018. Accounts are closed on 31st December
every year.
Solution:
MACHINERY ACCOUNT
Particulars 2015 2016 2017
2018
Opening balance 600,000 500,000 400,000
400,000
Add: Purchase 200,000
Less: Depreciation (SLM) 60,000
60,000 60,000
Less: Depreciation (RBM) 100,000
40,000 16,000
Less: Loss on disposal
(140,000)
Closing balance 500,000 400,000 240,000
440,000
Q. 5 i. Define partnership and explain the
importance of this business in Pakistan.
Partnership is an essential business
structure in Pakistan. It is a type of business where two or more individuals
come together to form a single business entity, with each partner contributing
to the business in some way. The partners are jointly and severally liable for
the debts and obligations of the business.
Partnership is a popular form of business
in Pakistan because it offers a number of advantages over other business
structures. It is easy to set up and relatively inexpensive compared to
incorporating a business. Partners can enjoy the benefits of shared management,
as each partner can focus on their area of expertise, while relying on the
other partner to manage the other aspects of the business. This allows the
business to grow and succeed more quickly. In addition, partnerships can be
flexible, allowing partners to divide profits and losses, as well as make
decisions regarding the business.
The importance of partnership in Pakistan
is that it allows for a greater degree of control and flexibility. Partners can
decide how to divide up profits and losses and can make decisions about the
business without having to consult with everyone involved. Furthermore, it
allows for the pooling of resources and skills, which can help the business to
succeed and grow more quickly.
Partnership is also beneficial for taxation
purposes. Since each partner is taxed on their share of the profits, taxes can
be minimized if the profits are allocated to the partner with the lowest tax
rate. This is particularly beneficial for partners who are in different tax
brackets.
Partnership is also beneficial for
raising capital. Each partner can contribute money, property or services to the
business, which can be used to fund the business operations. This can be
especially beneficial for businesses that are just starting out, as it can provide
a source of funds to pay for expenses such as rent, inventory and equipment.
Overall, partnerships are a valuable
business structure in Pakistan. They offer a number of advantages, including
greater control and flexibility, the ability to pool resources and skills, and
the potential for tax savings. Furthermore, they can be used to raise capital
for businesses that are just starting out. For these reasons, partnerships are
an important business option for entrepreneurs in Pakistan.
ii. If the profit earned during
three last five years Rs. 90,000, Rs. 92,000, Rs. 81,000, Rs. 75,000 and Rs.
70,000. Calculate the value of good will, under the average profit method and
4-years purchased of the average profits of the value of the last five years? (20)
Average Profit Method
Average Profit = (90,000 + 92,000 +
81,000 + 75,000 + 70,000) / 5
= 408,000 / 5
= Rs. 81,600
Value of Goodwill = Average Profit x 4
= 81,600 x 4
= Rs. 326,400
Dear Student,
Ye sample assignment h. Ye bilkul
copy paste h jo dusre student k pass b available h. Agr ap ne university
assignment send krni h to UNIQUE assignment
hasil krne k lye ham c contact kren:
0313-6483019
0334-6483019
0343-6244948
University c related har news c
update rehne k lye hamra channel subscribe kren: