Fin621 Financial Statement Analysis Assignment No. 1 solution
Monday, November 14, 2011 Posted In Fin Edit ThisSEMESTER FALL 2011
Financial Statement Analysis (FIN621)
Assignment No. 1
Due Date: 15 November, 2011 Marks: 15
Question # 1:
"Hamza Environmental solutions" is a sole-proprietorship business that was started few years ago. Mr. Hamza and his son are currently running the business.
Account Balances on 31st December, 2010 are given below:
Particulars Rs.
Cash 85,500
Notes Receivable 25,480
Accounts Receivable 130,180
Supplies 10,600
Land 392,000
Building 252,000
Accumulated Depreciation: Building 67,200
Office equipment 67,200
Accumulated Depreciation: office equipment 26,880
Notes Payable 224,000
Accounts Payable 45,360
Capital: December 31st, 2009 460,600
Drawings 140,000
Consulting fee earned 974,400
Advertising Expense 63000
Insurance Expense 77,440
Utilities Expense 30,080
Salaries Expense 490,560
Supplies Expense 19,280
Depreciation: Building 8,400
Depreciation: Office Equipment 6,720
You are required to:
Q1. Prepare the Balance Sheet as on 31st December 2010 assuming that the net income earned during the year was Rs. 278,920. (10 Marks)
Q2. Calculate the estimated useful life of the building assuming straight line depreciation method with no salvage value. Also, determine the period for which the building has been used for business operations. (5 Marks)
SOLUTION:
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