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b3 b4 Accounts

The document outlines two accounting problems requiring adjustments to net profit and stock valuation for two companies, M/s Manas and Ram Setu Ltd. M/s Manas's net profit needs to be recalculated considering various discrepancies in purchases, sales, and stock, while Ram Setu Ltd. requires a stock valuation adjustment based on inventory discrepancies and sales invoices. Both problems are structured for a study camp with specific marks allocated for each task.

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9 views2 pages

b3 b4 Accounts

The document outlines two accounting problems requiring adjustments to net profit and stock valuation for two companies, M/s Manas and Ram Setu Ltd. M/s Manas's net profit needs to be recalculated considering various discrepancies in purchases, sales, and stock, while Ram Setu Ltd. requires a stock valuation adjustment based on inventory discrepancies and sales invoices. Both problems are structured for a study camp with specific marks allocated for each task.

Uploaded by

mjasin04
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd

INDIAN INSTITUTE OF COMMERCE LAKSHYA

CA FOUNDATION
STUDY CAMP
Marks:15 Time allowed:27Min
1

1. M/s Manas, Profit and loss account showed a net profit of ` 32,00,000, after
considering the closing stock of ` 30,00,000 on 31st March, 2024.
Subsequently the following information was obtained from scrutiny of the
books:
(i) Purchases for the year included ` 1,20,000 paid for new electric fittings
for the shop.
(ii) M/s Manas gave away goods valued at ` 3,20,000 as free samples for
which no entry was made in the books of accounts.
(iii) Invoices for goods amounting to ` 20,00,000 have been entered on
25th March, 2024, but the goods were not included in stock.
(iv) In March, 2024 goods of ` 16,00,000 sold and delivered were taken in
the sales for April, 2024.
(v) Goods costing ` 6,00,000 were sent on sale or return in March, 2024 at
a margin of profit of 33-1/3% on cost. Though approval was given in
April, 2024 these were taken as sales for March, 2024.

You are required to determine the adjusted net profit for the year ended
on 31.3.2024 and calculate the value of stock on 31st March, 2024.

(10 MARKS)
2. Ram Setu Ltd. keeps no stock records but a physical inventory of stock is
made at the end of each quarter and the valuation is taken at cost. The
company’s year ends on 31st March, 2024 and their accounts have been
prepared to that date. The stock valuation taken on 31st March, 2024 was
however, misleading and you have been advised to value the closing stocks
as on 31st March, 2024 with the stock figure as on 31st December, 2023 and
some other information is available to you:
(i) The cost of stock on 31st December, 2023 as shown by the inventory
sheet was ` 7,20,000.
(ii) On 31st December, stock sheet showed the following discrepancies:
a) A page total of ` 45,000 had been carried to summary sheet as `
54,000.
b) The total of a page had been undercast by `1,800.
(iii) Invoice of purchases entered in the Purchase Book during the quarter
from January to March, 2024 totalled ` 6,30,000. Out of this ` 27,000
related to goods received prior to 31st December, 2023. Invoices
entered in April, 2024 relating to goods received in March, 2024 totalled
` 36,000.
(iv) Sales invoiced to customers totalled ` 8,10,000 from January to March,
2024. Of this ` 45,000 related to goods dispatched before 31st
December, 2023. Goods dispatched to customers before 31st March,
2024 but invoiced in April, 2024 totalled ` 36,000.
(v) During the final quarter, credit notes at invoiced value of ` 9,000 had
been issued to customers in respect of goods returned during that
period. The gross margin earned by the company is 25% of cost.

You are required to prepare a statement showing the amount of stock


at cost as on 31st March, 2024.

(10 MARKS)

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