guys please explain

Guys can u pls explain the following CPT problems to me, i m not able to understand them.. also mention the reasons how the answers have been concluded..

  • A proprietor Mr.A has reported a profit of Rs. 1,25,000 at the end of the financial year after taking into consideration the following amount:

1. the cost of an asset of Rs. 25,000 has been taken as an expense.

2. Mr.A is anticipating a profit of Rs. 10,000 on the future sale of a car shown as an asset in his books.

3. salary of Rs.7000 payable in the financial year has not been taken into account

4. Mr. A purchased an asset for Rs. 75,000 but its fair value on the date of purchase was 85,000. Mr. A recorded the valur of asset in his books by 85,000.

Ans- 1,33,000. HOW?

 

 

  • A purchased a car for Rs. 5,00,000 making a down payment of Rs. 1,00,000 and signing a Rs.4,00,000 bill payable due in 60 days. as a result of this transaction,

1. total assets increased by 5,00,000

2. total liabilities increased by 4,00,000

3. total assets increased by 4,00,000

4. total assets increased by 4,00,000 with corresponding increase in liabilities by 4,00,000

Replies (11)

sol. q.1-

profit-125000

+25000 as asset purchased is to be shown in B/S and here he shows in p&l hence profit got reduce by 25000 so add it

- 10000 any anticipating profit should not be shown until it is realised so deduct 10000 from profit.

- 7000 as salary is an expense,show it in P&L.

in 4th point no treatment in P&L as it is B/S item,so no effect in P&L .

correct profit =133000.

In q.2

Ans. is total assets increased by 400000 with liability 400000.

Because As in Asset side-

Car comes-500000

and cash decreases by 100000,so total 400000 increase in asset side.

similarly in liability side Bills payable comes 400000.

totly agres with nukul...

agree with nukul...

agree with nukul.

Originally posted by : poornakala

agree with nukul.

thank u alot nukul..

how to calculate written down value method by using the formula...thanks in advance..

Sol.q.1-125000+25000-7000-10000 (85000-75000)=133000

A mini test for you

https://www.biacademy.biz/Revision

hii will somone explain me why we add 25000 asset as expense in Profit.if profit got reduced by 25000 then why we add it in the profit, shouldn't it be subtracted from profit?

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