SEMESTER FALL 2013
BUSINESS FINANCE (ACC501)
ASSIGNMENT NO. 01
(NON-GRADED)
DUE DATE: 26TH NOVEMBER, 2013
MARKS: 20
LEARNING OBJECTIVES:
After attempting this assignment whole-heartedly, the students will be able to:
- Prepare cash flow statement and Common size statements.
QUESTION:
ABC Company is engaged in manufacturing of electronic appliances. Following are the income statement and comparative balance sheet of ABC Company for the years 2010 and 2011. You are required to prepare Cash Flow Statement for ABC Company for the year ended 31st December, 2011 and Common Size Income Statement.
Cash Flow Statement Marks:15
Common Size Income Statement Marks:05
ABC Company Limited
Income Statement
For the year ended on 31st December, 2011
| Amount (Rs.) | Amount (Rs.) | |
| Sales Revenue |
1,000,000 |
|
| Less: Cost of goods sold |
670,000 |
|
| Gross Profits |
330,000 |
|
| Less: Operating Expenses | ||
| General and administrative Expenses |
32,000 |
|
| Depreciation Expenses |
72,000 |
104,000 |
| Earnings before interest and taxes (EBIT) |
226,000 |
|
| Less: Interest Expenses |
22,000 |
|
| Net Profits before taxes |
204,000 |
|
| Less: Taxes @ 35% |
71,400 |
|
| Net Income |
132,600 |
|
| Earnings per share (EPS) |
3.79 |
|
| Dividend per Share |
2.36 |
|
ABC Company Limited
Comparative Balance Sheet
As on 31st December 2010 and 2011
|
2010 |
2011 |
2010 |
2011 |
|||
| Assets | Liabilities & Equities | |||||
|
Rs. |
Rs. | Rs. | Rs. | |||
| Cash |
10,000 |
15,000 |
Accounts Payable |
50,000 |
40,000 |
|
| Marketable |
20,000 |
25,000 |
Notes Payable |
40,000 |
35,000 |
|
| Securities | ||||||
| Accounts Receivable |
65,000 |
60,000 |
Accruals |
45,000 |
30,000 |
|
| Inventories |
45,000 |
58,000 |
| Total Current |
140,000 |
158,000 |
Total Current |
135,000 |
105,000 |
|
| Assets | Liabilities | |||||
| Land and Buildings |
300,000 |
450,000 |
Long-term Debt |
94,000 |
220,000 |
|
| Machinery and |
230,000 |
280,000 |
Stockholders’ Equity | |||
| Equipment | ||||||
| Furniture and |
120,000 |
120,000 |
Common stock Equity |
350,000 |
350,000 |
|
| Fixtures | ||||||
| Others |
50,000 |
50,000 |
Retained Earnings |
100,000 |
150,000 |
|
| Total Gross Fixed |
700,000 |
900,000 |
Paid-in-capital in |
105,000 |
105,000 |
|
| Assets | excess of par | |||||
| Less: | ||||||
|
56,000 |
128,000 |
Total Common |
555,000 |
605,000 |
||
| Accumulated | stockholder’s Equity | |||||
| Depreciation | ||||||
| Net Fixed Assets |
644,000 |
772,000 |
||||
| Total Assets |
784,000 |
930,000 |
Total Liabilities and |
784,000 |
930,000 |
|
| stockholders’ Equity | ||||||
Notes:
- Sales of old Machinery for Rs. 100,000 and purchased new for Rs. 150,000.
- Purchased new land and building costing Rs. 150,000 for storing inventories.
- Issued long-term 10% interest bearing bond of Rs. 126,000 and previously issued bonds also have the interest rate of 10%.
IMPORTANT:
24 hours extra / grace period after the due date is usually available to overcome uploading difficulties. This extra time should only be used to meet the emergencies and above mentioned due dates should always be treated as final to avoid any inconvenience.
IMPORTANT INSTRUCTIONS:
- Complete calculations are required for every part of the problem. Incomplete calculations will result in loss of marks.
- This assignment will be a non-graded assignment, which means that the marks of this assignment will not be included in your final marks.
OTHER IMPORTANT INSTRUCTIONS:
DEADLINE:
- Make sure to upload the solution file before the due date on VULMS.
- Any submission made via email after the due date will not be accepted.
FORMATTING GUIDELINES:
- Use the font style “Times New Roman” or “Arial” and font size “12”.
- It is advised to compose your document in MS-Word format.
- You may also compose your assignment in Open Office format.
- Use black and blue font colors only.
RULES FOR MARKING
Please note that your assignment will not be graded or graded as Zero (0), if:
- It is submitted after the due date.
- The file you uploaded does not open or is corrupt.
- It is in any format other than MS-Word or Open Office; e.g. Excel, PowerPoint, PDF etc.
- It is cheated or copied from other students, internet, books, journals etc.
Note related to load shedding: Please be proactive
Dear students!
As you know that Pre Mid-Term semester activities have started and load shedding problem is also prevailing in our country. Keeping in view the fact, you all are advised to post your activities as early as possible without waiting for the due date. For your convenience; activity schedule has already been uploaded on VULMS for the current semester, therefore no excuse will be entertained after due date of assignments, quizzes or GDBs.