how to create the trading a/c, profit & loss a/c & Balance
sheet & What do u mean by bank reconcilation
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Answer / neha jain
Trading a/c, P&L a/c & Balance Sheet is created on the basis
of the given particulars. Purchases & Sales are directly
related to trading a/c & all the expenses which is directly
related with sales & purchase is under trading a/c. It also
includes the expenses which is directly related to factory.
P&L a/c includes all the indirect expenses & the Bad debts
& depreciation is also under this a/c. Balance sheet is the
summation of the trading & p&l a/c. It states the financial
position of the company.
Bank Reconciliation means to recheck or verify the bank
statement with our book.
| Is This Answer Correct ? | 36 Yes | 2 No |
Answer / rajesh
trading a\c, profit & loss a\c & balance account is
prepared with the help of trail balance.
Bank reconciliation statement is statement to reconcile the
bank balance as per pass book and with bank balance as per
cash book.
| Is This Answer Correct ? | 17 Yes | 1 No |
Answer / chandni
Trading,P&L A/C are created from trial balance of the
business. Trading a/c involves purchases and sales,P/L a/c
includes expenses.
Bank reconciliation is statement to reconcile the
bank balance as per pass book and with bank balance as per
cash book.
| Is This Answer Correct ? | 10 Yes | 2 No |
Answer / vemula rakesh
Trading,profit&loss account and balance sheet is prepared
by seeing the trial balance of that particular company..
Bank reconciliation statement is the stmt which is used to
reconcile he difference between the cash book and pass book
| Is This Answer Correct ? | 14 Yes | 7 No |
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DHPL is a small sized firm manufacturing hand tools. It manufacturing plan is situated in Haryana. The company’s sales in the year ending on 31st March 2007 were Rs.1000 million (Rs.100 crore) on an asset base of Rs.650 million. The net profit of the company was Rs.76 million. The management of the company wants to improve profitability further. The required rate of return of the company is 14 percent. The company is currently considering an investment proposal. One is to expand its manufacturing capacity. The estimated cost of the new equipment is Rs.250 million. It is expected to have an economic life of 10 years. The accountant forecasts that net cash inflows would be Rs.45 million per annum for the first three years, Rs.68 million per annum from year four to year eight and for the remaining two years Rs.30million per annum. The plant can be sold for Rs.55 million at the end of its economic life. The company would need to raise debt to the extent of Rs.200 million. The company has the following options of borrowing Rs.200 million: a. The company can borrow funds from a nationalized bank at the interest rate of 14 percent for 10 years. It will be required to pay equal annual installment of interest and repayment of principal. b. A financial institution has offered to lend money to DHPL at 13.5 per annum but it needs to pay equated quarterly installment of interest and repayment of principal. Questions: 1. Should the company expand its capacity? Show the computation of NPV 2. What is the annual installment of bank loan? 3. Calculate the quarterly installments of the Financial Institution loan 4. Should the company borrow from the bank or from the financial institution?
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