8. (a) Briefly discuss the importance of ratio analysis. (b) From the following information relating to Ehsan Ltd., prepare a Balance Sheet of the company: Current ratio Acid test ratio 2-5:1 1-5:1 Net working capital Tk. 3,00,000 Inventory turnover 6 times Gross profit ratio 20% Ratio of cost of goods sold to fixed assets Average collection period 2:1 2 months Fixed assets to net worth 0-80:1 Reserve and surplus to share capital 0-50:1 nor of XYZ Bank Ltd. at 31 December, 2020 : Marks 4 14 Debit 14 Credit (Teka) Debit 4. (a) Explain the accrual basis of accounting and the reasons for adjusting entries. (b) Kanta Industries collected Tk. 10,00,000 from customers in 2016. Of the amount collected, Tk. 2,50,000 was for services performed in 2015. In addition, Kanta performed services worth Tk. 3,60,000 in 2016, which will not be collected until 2017. Kanta Industries also paid Tk. 7,20,000 for expenses in 2016. Of the amount paid, Tk. 3,00,000 was for expenses incurred on amount in 2015. In addition, Kanta incurred Tk. 4,20,000 of expenses in 2016, which will not be paid until 2017. Required: (i) Compute 2016 cash-basis net income. (ii) Compute 2016 accrual-basis net income. 4 10 9. The following are the balances of XYZ Bank Ltd. at 31 December, 2020: Particulars Share capital (88,750 shares of Tk. 10 each) Reserve Current accounts 14+14-28 Debit (Taka) Credit (Taka) 8,87,500 5,00,000 25,81,343 Deposit accounts Acceptance and endorsement for customers Reserve for final dividend Profits & loss A/c (01-01-2019) Interest received Discount charges Commission charges Dividend received less tax Cash in hand Cash with Bangladesh Bank 6,35,135 3,40,216 56,005 1,28,139 1,41,010 38,461 1,54,359 86,251 3,41,644 6,21,858 Money at call and short notice 2,79,416 Bills discounted 8,33,483 Advances to customers 13,42,120 Liability of customers for acceptance and endorsement 3,40,216 Bank premises 2,60,000 Investment in shares of Joint Stock Companies (at cost) 2,48,000 Investment in national defense bond (at cost) 1,68,000 Balances with other banks 2,24,220 Government securities (at cost) Interest paid General expenses Salaries & allowances Interim dividend Final dividend You are required to prepare a profit and loss account for the year ended 31 December, 2020 and the Balance Sheet as at that date after taking into account the following adjustments: (f) Unexpired discount amounted to Tk. 4,200; while interest and dividends accrued and outstanding were Tk. 40,000 and 35,000 respectively. (ii) Salaries paid Tk. 10,000 included in general expenses. (iii) Provide Tk. 17,500 for depreciation on bank premises. (iv) The market value of investment in shares of joint stock companies was Tk. 2,55,000. (v) Provide bad debts to the extent of Tk. 5,500. 6,18,358 42,048 91,363 1,00,000 32,188 56,005 Total 55,98,919 55,98,919 een current account and capital account of a partnership firm. 3. (a) Expenses, losses and distributions to owners are all decreases in net assets. What are the distinctions among them? (b) The bookkeeper for Karim equipment repair made a number of errors in journalizing and posting, as described below: (1) A credit posting of Tk. 525 to accounts receivable was omitted. (2) A debit posting of Tk. 750 for prepaid insurance was debited to insurance expense. (3) A collection from a customer of Tk. 100 in payment of its account owed was journalized and posted as a debit to cash Tk. 100 and a credit to service revenue Tk. 100. (4) A credit posting of Tk. 415 to property taxes payable was made twice. (5) A cash purchase of supplies for Tk. 250 was journalized and posted as a debit to supplies Tk. 25 and a credit to cash Tk. 25. (6) A debit of Tk. 625 to advertising expense was posted as Tk. 652. Required: (i) Indicate whether the trial balance will balance. (ii) If the trial balance will not balance, indicate the amount of the difference. (iii) Indicate the trial balance column that will have the larger total. 434 following form in which error (1) is given an 6 12 6. (a) Are the financial statements of a partnership similar to those of a proprietorship? Discuss. (b) How does the liquidation of a partnership differ from the dissolution of a partnership? (c) At the end of its first year of operations on December 31, 2020, the KMC Company's accounts show the following: Partner Kajal Mitali China Drawings (Taka) 12,000 9,000 6,000 Capital (Taka) 33,000 20,000 10,000 The capital balance represents each partners initial capital investment. Therefore, net income or net loss for 2020 has not been closed to the partners capital accounts. Required: (i) Journalized the entry to record the division of net income for 2020 under each of the following independent assumptions: (a) Net income is Tk. 32,600. Income is shared 5:3:2. (b) Net income is Tk. 30,000. Kajal and Mitali are given salary allowances of Tk. 13,000 and Tk. 8,000 respectively. The remainder is shared equally. (c) Net income is Tk. 25,200. Each partner is allowed interest of 10% on beginning capital balances. Kajal is given a Tk. 15,000 salary allowance. The remainder is shared equally. (ii) Prepare a schedule showing the division of net income under assumption (c) above. (iii) Prepare a partners capital statement for the year under assumption (c) above. als used in different businesses not be identical in format? Can you iournal but not include a column for 3 3 12