Assignment Solution FIN 611
Student ID: bc220205352
1) :Three benefits to the business of the donations paid for environmental
cause.
Solution:
Positive public image:
Supporting environmental causes through donations can enhance a company's reputation and
public image. This positive image can lead to increased customer loyalty and attract
environmentally conscious consumers.
Stakeholder Engagement:
Donations towards environmental causes can also improve relationships with various
stakeholders, including employees, investors, and local communities.
Regulatory Compliance and Risk Mitigation:
Many regions have regulations and policies related to environmental sustainability.
Additionally, addressing environmental issues proactively can help mitigate long-term risks
related to resource scarcity.
These benefits collectively contribute to a more sustainable and resilient business model,
aligning with evolving societal expectations and contributing to long-term success.
2) Profit & loss account for the year ended December 31st, 2023.
Solution:
Statement of profit and loss
Particular Rs. Particular Rs.
Purchases paid 840000 Sales 250000*9 2250000
Unpaid purchases 160000
overhead expenses 25000 closing stock 30000
carriage inward 16000
Gross profit 1239000
2280000 2280000
Salaries 420000 Gross profit 1239000
less installation 20000 400000
insurance premium
800000*12/15 64000
additional expense 100000
less overhead 25000 75000
Donation 12000
depreciation of lab equip
1720000/10 172000
interest expense
2000000*5% 100000
Net profit 416000
1239000 1239000
Cash Account
Received Rs. Paid Rs.
200000
initial capital 0 Salaries and wages 420000
200000
5% loan 0 raw material 840000
interest free 120000
loan 0 insurance premium 80000
216000
0 additional expenses 100000
Donation 12000
drawings 4000
lab equipment 2000000
repayment of loan 600000
carriage inward paid 16000
construction of new business 800000
closing cash 2488000
736000
0 7360000
3) : A balance sheet as on December 31st, 2023, using the conversion method.
Solution:
Balance Sheet
Assets Rs. Liabilities Rs.
Cash 2488000 interest free loan 600000
Receivables 10000*9 90000 5% loan 2000000
inventory 30000 interest payable 100000
prepaid insurance 16000 creditors 160000
plant and equipment initial capital 2000000
2020000-172000 1848000 net profit 416000
construction in progress 800000 less drawings 4000 412000
5272000 5272000
