FM Query..plss help..its urgent

IPCC 635 views 3 replies

1. In fund flow statement, what is the treatment regarding bonus shares??

 

2. In fund flow statement, What will be the treatment of Reserves for Machinery, given in liabilities side?

3. If in fund flow question, in additional information, it is given that depreciation for the year or depreciation charged is RsXXX and in another point, it is given that machinery sold, cost of which was RsXX, WDV Rs XX, sold at Rs XX, then, depreciation regarding that machine will also be calculated and shown in adjusted p&l a/c or depreciation for the year will be shownin p&l a/c?????

 

4. In capital budgeting question, if market value of existing machine is given, then, will it be always treated or taken as the existing machine is sold???

Replies (3)
Originally posted by : Dimple


1. In fund flow statement, what is the treatment regarding bonus shares??

ans:--bonus issue will go to the p & l adj a/c
 

2. In fund flow statement, What will be the treatment of Reserves for Machinery, given in liabilities side?

 

ans:--reserve for machinery will go to the P & L  adjustment A/C

3. If in fund flow question, in additional information, it is given that depreciation for the year or depreciation charged is RsXXX and in another point, it is given that machinery sold, cost of which was RsXX, WDV Rs XX, sold at Rs XX, then, depreciation regarding that machine will also be calculated and shown in adjusted p&l a/c or depreciation for the year will be shownin p&l a/c?????

 

ans:--The current depriciation will be shown in the p & l adj a/c and the depriciation on the machinery sold will go to the accumulated depriciation a/c
 

4. In capital budgeting question, if market value of existing machine is given, then, will it be always treated or taken as the existing machine is sold???

 

ans:-- if the question is of Replacement then my ans will be yes because it is the indirect way of telling that the exsisting machinery if will be sold in the zero period then we realise that value.

  If you have further enquiry then u can ask me.......

find the attachment

 

  In reference to question asked by you, here is the solution for it.

 

  Dr.                                   Land & Building A/c                                                            Cr.

 

 

 

To Bal. B/d                                   600000

By P&L (dep)                          50000

To Bank(purchase) {b.f}               150000

By bal. C/d                           700000

    Total                                        750000

             Total                       750000

 

 

  Dr.                       Plant and machinery A/c                                                                Cr.

 

 

 

To bal.b/d                             900000

By P&L ( dep.)                           120000

To bank (purchase) { b.f}      360000

By bank ( sale)                            32000

 

By P&L( Loss on sale)                   8000

   { 40000 – 32000}

                                           

By bal. c/d                               1100000

           Total                         1260000

          Total                              1260000

 

 

Explanation---

1-      As per info transfer all the balances to respective accounts.

2-      Charge dep on building Rs 50000 by debiting Land & building A/c.

3-      Balance the land and building A/c , you will get purchase of land and building Rs 150000

4-      Similarly in Plant and machinery charge dep. Of 120000

5-      In plant and machinery, there is a sale of old machine whose WDV is 40000(this is after charging dep. on total plant and machinery A/c Rs 120000) and is sold for Rs 32000. So there is a loss of 8000 which will be credited to plant and machinery a/c along with sale value of Rs 32000.

6-      Balance the account and you will get purchase of plant and machinery as Rs 360000.

 

Posting to Fund Flow---

1-      Transfer both dep (120000 + 50000) to dr. of adjusted p&l a/c.

2-      Loss on sale of machine Rs 8000 to Dr. of Adjusted p&l a/c.

3-      Sale of machine Rs 32000 to sources in fund flow.

4-      Both purchases (150000 + 360000) to applications in fund flow.


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