Professional Documents
Culture Documents
Comprehensive Project
Comprehensive Project
COMPREHENSIVE PROBLEMS
PROBLEM 1
Title o the Project. Analysis of the Financial Position of Arvind Auto Agency.
Objectives of the Project:
1. To know the short-term solvency position of the business.
2. To judge the Operational efficiency of the business.
3. To judge the Overall profitability of the business.
Source Material: Statement of the Project.
tep 1.
JOURNAL OF MS ARVIND AUTO AGENCY FOR THE MONTH OF MARCH, 2008
Bank Ac Dr 75.00.000
15.00,000
To Capital Ac
60.00.00
To Loan Ac
Being started business with Capital
and Bank loan
Bank DT 47,70.000
47,70.000
To Sales Ac
Being Sale made
Purchase Ac Dr 37,20,000
37.20,000
To Bank Ac
Being purchases made in cash
Purchases Ac Dr 3,00.000
To Creditors Ac 3,00,000
Salaries Ac Dr 1.95,000
Water and Electricity A/c DT 39.000
Mobile and Courier Charges Ac Dr. 17.700
1,22,70,000 1,22,70,000
LEDGER ACCOUNT
15,00,0000 15,00,000
60,00,000
60,00,000
60,00,000
By Balance bd
PROJECT WwORK P.9
37,66,000 37,50,000
To Balance bd 36,75,000
36,000
To Bank Ac 3,60,000 By Dep.
By Baiance c/d 3,24,000
3,60,000 3,60,000
3,90,000 3,90,0000
47,70,000 47,70,000
P.10 ACCoUNTANCY-xI
Dr. PURCHASES ACCOUNT Cr.
Date Date Particulars J.F. Amount
Particulars J.F Amount
40,20,000 40,20,000
2,15,100 2,15,100
41,400 41,400
18.000 18,000
9.000 9.000
Dr.
PRINTING AND STATIONARY EXPENSES ACCOUNT CT
Date Particulars J.F. Amount Date Particulars J.F Amount
6,000
6,000
By Profit and
To Office
Loss A/c 1.50,000
Premises Alc 75,000
To Office
Equipment A/c 36,000
To Furniture and
Fittings Alc 39,000
1.50,000
1,50,000
P.12 ACCoUNTANCY-xI
MISCELLANEOUS EXPENSES ACCOUNT
Dr. Cr
Date Particulars J.F Amount Date Particulars J.F Amount
Step 3.
Adjustments:
1. Closing stock 8,70,000.
2. Unused Stationary 1,500.
Step 4.
TRADING AND PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED 31ST MARCH, 2008
5640,000 56,40,000
To Salaries 2,15,100
To Water and Electricity
Expenses 41,400 By Gross Profit 16,20,000
To Mobile and Courier Expenses 18,600
To Sales Promotion 18,000
To Trade Expenses 9,000
To Printing and Stationery
6,000
Less: Unused 1,500 4,500
To Miscellaneous Expenditure 52,500
To Depreciation Office
on Premises 75,000
To Depreciation on Office
Equipment 36,000
To Depreciation on Furniture 39,000
To Net Profit 11,10,900
16,20,000 16,20,000
Step 5.
BALANCE-SHEET OF ARVIND AUTO AGENCY AS AT 31ST MARCH, 2008
Particulars Amount Particulars Amount
Current Assets
Current Ratio
Current Liabilities
Current Assets
Stock
Bank Balance Stock of Stationery Closing
=73712 800 1500 8 70.000
745 84 300
Whereas Current Liabilit
= Creditors Outstanding Salaries Outstanding Water
andElectricity Outstanding Mobile Charges
= 7 300.000 20.100 2400 900 =7323 400
745 84 300 4
Current Ratio =
73.23 400
Quick Assets
Quick Ratio =
Current Liabilities
37.12800
Quick Assets =Bank Balance =
737.12.800
Quick Ratio 11 15
323 400
of this Auto
Comments. From the above ratios we can say short term solvency position
be suggested that some of the cash
Agency is very sound. But on the other hand it can also
c a n b e i n v e s t e d as ideal Current Ratio is 2 : 1 a n d liquid ratio is 1 : 1 b u t t h e liquidity r a t i o s o f
this auto agency is much higher so there may be some idle cash which can be utilized.
Now to judge the operational efficiency of this auto agency we will calculate Operating
Ratio
Operating expenses
Operating Ratio = Costor goods sold 100
Net Sales
sold Opening stock Net purchase Cost stock
Whereas cost of goods =
Comments. From the ratio we can say operating expenses are on higher side so AiVd
should try to reduce the operating expenses.
Now to judge the profitability we will have to calculate the Gross Profit and Net Protit
Ratio.
Gross Profit Ratio Gross Profit
=
100
Net Sales
16,20,000 x 100 33.96%
47,70,000
Net Profit
Net Profit Ratio = x 100
Net Sales
11,10,900
x 100 = 23.28%.
47,70,000
efficiency is 9ood but Net
Comment. From the above G.P. Ratio we can say production
Profit ratio can be increased by proper utilization of resources.