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This case is based on your Birth Day ( say , PQ ) and Birth Month ( say , RS ) . You are starting
This case is based on your Birth Day say PQ and Birth Month say RS You are starting a firm with
a capital equal to PQRS crore. Suppose, you are having a date of birth as per official records as
then in your case the capital of your firm would be plus crore crore as PQRS
would be Similarly, suppose your date of birth is then in your case the capital would
be crore being
Transactions:
i Day : You start a firm named Kanchan Polymers Limited with a capital of PQRS crores.
ii Day : You buy machinery worth PQRS crore from Raj Machineries Limited. Half of the amount
is paid on the same day. Rest half of the payment would be done by the end of the month.
iii You take an interest free loan from a friend of a size equal to twice the capital of the firm.
iv The firm makes credit sales of crore during the year. The end of the year trade receivables
balance is crores. It is expected that of the same would turn out to be bad debt.
v Marketing and distribution expenses for the year are crore. Salaries for the year stand at crore.
Electricity and other charges for the year are at crore. All these expenses are paid and no dues
remain at the end of the year.
vi The firm makes cash purchases of raw materials worth crore. The firm makes credit purchases
of crore. The yearend payables balance remained at crore.
vii End of the year survey reveals a raw material inventory of crore. No other inventory exists for
the firm.
viii The machinery is to be depreciated on a written down value basis @ per annum. Corporate
income tax rate is applicable at the rate of Fringe benefit tax is estimated to be crore.
Taxes are not yet paid by the firm and provision for the same has to be made.
You are required to prepare Kanchan Polymer balance sheet and income statement at the end of first year.
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