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EQUATION

Kaji faiaz stared a computer programming service on January 1 2007.the event and transaction occurred during the month of January:

Jan, 01. Sold a personal investment in ific stock for tk 250000 and deposited tk 200000 of the proceeds in a bank account in the name of his business 
03. Purchased computer equipment for tk 50000 in cash.
05. Purchase computer papers and others supplies from Acme co. tk 5000
06. incurred advertisement in the daily news on account for tk 2000
15. Borrowed tk 20000 cash from prime bank ltd. On a notes payable
18. Cash tk 20000 received from customers and billed them for tk 25000 for service render
20. Paid office expenses tk 5000 and salary to staff tk 10000
22. Paid cash to the daily news for incurred advertisement on January 6
24. kaji faiaj paid hid residential rent for tk 10000
From business bank account
25. Paid cash 8000 to prime bank ltd.
27. Cash collection from customers tk 10000 for services provided on Jan 18
29. Purchase a new computer equipment costing tk 65000. The supplier agreed to received tk 25000 and the old computer equipment in payment of purchase consideration
30. Received utilities bill for telephone, gas, electricity etc tk 2500
Requirement: 
Prepare a tabular summary of transactions showing the effect on accounting equation and prove the accounting equation

TEST EXAM JOURNAL

1. (a) Describe the objects and advantages of double entry system.
(b) Mr. Habib operates a shop at Khulna under the name of Habib auto repairs and painting shop. On June 31, 2008 the balance of account showed cash tk 80000, account receivable tk 20000, equipment tk 35000, supplies tk 6000, accounts payable tk 10000 and owner’s equity?
During the month of June the following transactions occurred:
June, 1 accounts payable paid in cash
2, cash collected from account receivable tk 15000
4, equipment purchase tk 4500 from progoti motors at Chittagong on account
6, received from a customers tk 20000 for future service
10, service charges received in cash tk 12000
12, rental contract singed for 36 months and cash paid tk 7200 
15, paid utilities expense tk 15000
20, paid rent expenses expense for the month tk 1000
25, paid salaries tk 3000
28, electric bill tk 500
30, acquired additional equipment costing tk 4000 by issuing a Notes payable in the amount of tk 2400 and paying cash for the difference.
Required:
1. Prepare general journal entries for these transactions.
2. Prepare necessary ledger account
3. Prepare an unadjusted trial balance

test exam for journal

Kaji faiaz stared a computer programming service on January 1 2007.the event and transaction occurred during the month of January:
Jan, 01. sold a personal investment in ific stock for tk 250000 and deposited tk 200000 of the proceeds in a bank account in the name of his business 
03. Purchased computer equipment for tk 50000 in cash.
05. Purchase computer papers and others supplies from Acme co. tk 5000
06. incurred advertisement in the daily news on account for tk 2000
15. Borrowed tk 20000 cash from prime bank ltd. On a notes payable
18. cash tk 20000 received from customers and billed them for tk 25000 for service render
20. paid office expenses tk 5000 and salary to staff tk 10000
22. paid cash to the daily news for incurred advertisement on January 6
24. kaji faiaj paid hid residential rent for tk 10000
From business bank account
25. paid cash 8000 to prime bank ltd.
27. cash collection from customers tk 10000 for services provided on jan 18
29. purchase a new computer equipment costing tk 65000. The supplier agreed to received tk 25000 and the old computer equipment in payment of purchase consideration
30. received utilities bill for telephone, gas, electricity etc tk 2500

Exam : leverage

1. What is leverage? Write difference between operating and financial leverage?

2. Bd food ltd. sells food to university cafeterias’ for tk 25 a box. The fixed costs of this operating are tk 100 000. While the variable cost per box is tk 20.
(a) What is the break even point in boxes?
(b) Show BEP chart
(c) Calculate the profit or loss on 200 000 boxes and on 40000 boxes.
(d) What is the degree of operating leverage at 30000 boxes and 40000 boxes? Why the degree of operating leverage change as the quantity sold increases?
(e) If the firm has an annual interest expenses of tk 15000. Calculate the degree of financial leverage at both 30000 and 40000 boxes.
(f) What is the degree of combined leverage at both sales levels?

CAPITAL STRUCTURE (2)

(Selected problems)

Problem-1: At present a company has 50,000 ordinary shares of Tk 100 each. The Company requires an additional capital of Tk 12, 50,000. In order to acquired the additional capital the company has been considering the following three alternative: 
 (I) Issue 12,500 ordinary shares.
 (ii) Borrow Tk. 12, 50,000 at 10% interest.
 (iii) Issue 12,500 10% preference shares of Tk 100 each.
If the earnings before interest and tax of the company are Tk 7, 50,000 show the effect of these there alternatives on earning per share. Assume tax rate is 40%. 
Problem-2: Currently a company has a total capital of Tk 20 lakh. Consisting of 40 percent debt capital 10 percent interest and 60% shares capital of Tk 100 per share. Now the company is planning to expand capital by 50 percent. The company has four alternative plans.
 (I) 50 percent by 12% debt capital and 50 percent by common stock share capital.
 (ii) Fully by 11% preferred stock capital.
 (iii) Fully by common stock capital.
 (iv) Fully by 12% debt capital.
If the expected rate of return (EBIT) on total asset is 20% and tax rate is 25% find out the EPS under each alternative method of financing. Comment on. 
Problem-3: Following is the capital structure of company.
12% Debt capital Tk. 30 Lakh
Common Stock Capital (80,000 Shares) Tk. 128 Lakh
Total Capital Tk. 158 Lakh
To finance an expansion program, the company needs additional capital of Tk. 40 Lakh. There are three alternative methods of financing.
(i) Through 14% debt financing.
(ii) Through 12% preferred stock financing.
(iii) Selling common stock shares of Tk. 160 per share.
Assuming 40% corporate tax and expected EBIT of Tk. 15 Lakh.
Find out: 
(A) Earning per share under each alternative methods of financing.
(B) Indifference point of EBIT under method (I) and (iii).
  You are also required to show the in indifference point in graph.
Problem-4: The Meghna cement com. has the following capital structure:
Common Stock Capital (TK. 100 per share of 40,000 share) 40, 00,000
12% Debt Capital 10, 00,000
  50, 00,000
The Com. Is planning to increase the capacity that will require an additional capital of Tk. 20, 00,000 next year the expected EBIT is Tk. 6, 00,000. Corporate tax rate is 40%. To finance the additional capital there are the following alternatives.
(I) fully by common stock
(II) fully by 14% debentures
(III) fully by 10% preferred stock
(IV) 50% by 14% debenture and 50% of common stock
(a) Calculate EPS and comment which alternative should be preferable.
(b) Calculate indifference EBIT and EPS between alternative (I) and (II)
(c) Calculate indifference EBIT and EPS between alternative (III) and (IV)
 
Problem-5 : ABC Ltd has the following capital structure.
Equity (Tk. 100 per share) Tk. 10,00,000
12% Debt Tk. 5,00,000
Total Tk 15,00,000
The company wishes to raise Tk. 5,00,000 for expansion program. The following alternatives are available :
i. 100% equity.
ii. 50% equity and 50% debt @ 12%
iii. 100% debt @ 12%
The expected EBIT is Tk. 20,00,000 the tax rate is 40%. Calculation the EPS and which one would you perfer. Calculate the indifference point between (i) and (ii).
Problem-6 : MRS co. Ltd. Has present capital structure as follows.
Equity share capital (10,000 shares) Tk. 10,00,000
10% Debt capital Tk. 5,00,000
Total Tk. 15,00,000
The firm is thinking to raise additional capital at Tk. 5,00,000 for its expansion. It has two alternative financial methods.
(i) Issue of 12% debenture.
(ii) Issue of 13% preference share capital of Tk. 2,00,000 and equity capital of Tk. 3,00,000.
Determine the indifference point of EBIT and EPS between these two financing methods. Tax rate is 30%.
Problem-7 : Modern Ltd has 20,000 common stock of tk. 100 each aggregating Tk. 20,00,000. It requires additional capital of Tk. 5,00,000. In order to raise such capital it has three following Alternatives.
a. Issuing 5,000 common stock 100 each
b. 10% debt of Tk. 5,00,000
c. 10% preferred stock @ 100 Tk. 5,00,000
Assume corporate tax rate is 50%.

Adain’s Tutorial 

A Special Commerce Coaching

212/5-GA West Rampura, Ulon Road.

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[Answers any 5 Question]
1. a. Define Accounting? 
  b. What is information system. Discuses the steps of information system. 
  c. Three C of Accounting. 
2. a. What is GAAP? What are the sources of GAAP.
  b. Financial statement information about four different companies is as follows. 10

January 1, 2003 Bablu Company Lablu
Company Dablu
Company Hablu Company
Assets Tk. 84000 Tk. 110000 (g) Tk. 1700000
Liabilities 50000 (d) 75000 (j)
Owner’s equity (a) 60000 50000 90000
December 31, 2003  
Assets (b) 147000 200000 (k)
Liabilities 55000 65000 (h) 80000
Owner’s equity 58000 (e) 130000 180000
Owner’s equity changes in year  
Additional investment (c) 15000 10000 15000
Drawings 250000 (f) 14000 20000
Total revenues 350000 420000 (i) 520000
Total expenses 320000 385000 342000 (I)
Instructions 
a. Determine the missing amounts.
b. Prepare the owner’s equity statement for Lablu Company. 

3. a. What is Accounting Equation? 4
  b. Mr. Mamun, CPA, Competed these transactions during October of the current year. 16
Oct. 1 Began a public accounting practice by investing Tk. 35,000 in cash and office equipment having a Tk. 40,000 fair Value.
1 Paid two months rent in advance on suitable office space, Tk. 15,000
2 Purchased on credit office equipment, Tk. 3,500 and office supplies, Tk. 650. 
5 Completed accounting work for a client and immediately received Tk. 1,500 cash there for.
9 Completed accounting work on credit for Basic Bank, Tk. 6,000
11 Paid for the items purchased on credit on October 2.
12 Paid the Tk. 6,250 premium on an insurance policy.
19 Received payment in full from Basic Bank for the work completed on October 9.
25 Completed accounting work on credit for-Eastern Realty, Tk. 4000
29 Mamun withdrew Tk. 2,500 cash from the practice to pay personal expenses.
30 Purchased additional office supplies on credit Tk. 400.
31 Paid the October utility bills, Tk. 1,350.
Required : 1. Prepare a tabular analysis of the transactions.

  2. Prepare an income statement, owner’s equity, Balance sheet. 

4. a. Define Adjusting Entries? Write Types of adjusting Entries. 3+5
  b. The trial balance of Olympic Ltd. Shows, among other items, the following balances on  
  December 31, 2003, the end of a fiscal year : 12

Accounts Receivable 225000 
9% Century City Bonds 150000 
Land 275000 
Buildings 300000 
Accumulated Depreciation-Buildings 173250
8% First-Mortgage Bonds Payable 3000000
Rent Revenue 71500
Office Expense 7500 

The following fact on this date upon inspection of the company’s records. 
a. It is estimated that approximately 2% of accounts receivable may prove uncollectable.
b. Interest is receivable semiannually on the Century City bonds on March 1 and September 1.
c. Buildings are depreciated at 5% a year, however, there were building additions of Tk. 50,000 during the year, The company computes depreciation on asset acquisitions during the year at one half the annual rate.
d. Interest on the first-mortgage bonds is payable semiannually on February 1 and August 1.
e. Rent revenue includes Tk. 3,750 that was received on November 1, representing rent on part of the buildings for the period November 1, 2003, to October 31, 2004.
f. Office supplies of Tk. 2,000 are on hand on December 31, Purchases of office supplies were debited to the office expense account.
Instructions :
1. Prepare the journal entries to adjust the books on December 31, 2003.
2. Give the reversing entries that may appropriately be made at the beginning of 2004. 

5. a. Differentiate between perpetual inventory system and periodic inventory system. 6
  b. Dazzle Book Warehouse distributes hardback books to retail stores and extends credit terms of 2/10, n/30 to all of its customers. At the end of may. Dazzle’s inventory consisted of 240 books purchased at Tk. 1200. During the month of June the following merchandising transactions occurred. 14
June. 1 Purchased 130 books on account for Tk. 5 each from Reader’s World Publishers. FOB destination, terms 1/10, n/30. The appropriate party also made a cash payment of Tk. 50 for the freight on this date.
3. Sold 140 books on account to the Book Nook for Tk. 10 each.
6. Received Tk. 50 credit for 10 books returned to Reader’s World Publishers.
9. Paid Reader’s World Publishers in full. Less discount. 
15. Received Payment in full from the Book Nook. 
17. Sold 120 books on account to Read A-Lot Bookstore for Tk. 10 each.
20. Purchased 120 books on account for Tk. 5 each from Read More Publishers. FOB destination, terms 2/15. n/30. The appropriate party also made a cash payment of Tk. 50 for the freight on this date.
24. Received payment in full from Read-A-Lot Bookstore.

26. Paid Read More Publishers in Full, less discount.
28. Sold 110 Books on account to Readers Bookstore for Tk. 10 each.
30. Granted Readers Bookstore Tk. 150 credit for 15 books returned costing Tk. 75.
Instruction :
Journalize the transactions for the month of June for Dazzle’s Book Warehouse using a perpetual inventory system. 

6. The followings are the ledger balances of Square Ltd. As on 30th June 2003 20

Accounts Title Tk. Accounts Title Tk.
Accounts Payable 275000 Land 550000
Accounts Receivable 560000 Long term Investments 105000
Advertising Expense 40000 Mortgages Payable 400000
Accumulated Dep. On Buildings 165000 Notes Payable 125000
Allowance for Doubtful Accounts 11500 Office Expenses 134000
Buildings 600000 Purchase 1154000
Capital Stock 1500000 Purchase Discounts 9500
Cash 200000 Retained earning on 30th, June 2003 112000
Freight In 150000 Sales 2050000
Insurance Expense 12000 Sales Returns 28000
Interest Expense 22000 Sales Discounts 45000
Interest Income 5500 Selling Expenses 412000
Inventory 30th June, 2003 540000 Taxes, Payroll etc. 66500
  Supplies Expense 35000

Adjustments on 30th June 2003 are required as follows : 
a. The Inventory on hand Tk. 728500
b. The Allowance for Doubtful Accounts in to be increased to a balance of Tk. 25000
c. Buildings are depreciated @ 3%
d. Accrued Selling expenses are Tk. 22000.
e. There are Supplies of Tk. 6500 on hand
f. Unexpired Insurance for the next two year total Tk. 3500
g. Accrued interest on Long-term Investment is Tk. 2000
h. Accrued payroll taxes are Tk. 7500
i. Accrued interest on mortgage is Tk. 4000
j. Income taxes are estimated at 30% of the net income before taxes.
Required : (1) An eight column work sheet (2) Adjusting entries. 

7. a. What are the Differences between General Journal and Special Journal? What are the 
  Benefits of Special Journal. 3+3
  b. On February 1, 2005, the accounts payable ledger and accounts receivable ledger of 
  Ramos Co. are shown below : 14


Accounts payable ledger : R. Huff & Co. 3,500, G. Paul Tk. 2,000 and Waldo Bros. Tk. 3000.
Accounts receivable ledger. Quinn Corp. Tk. 6000, Mason Co. Tk. 4500 and Virginia Co. Tk. 500.
The February transactions are as follows :
Feb-1 The owner K. Ramos invested additional cash in the business Tk. 15,000.
3 Purchased merchandise, cheque no 11 Tk. 12,000.
5 Received cheque in full from Quinn Corp, Mason Co. and Virginia Co. less 5% discount.
7 cash sales of merchandise total Tk. 15,500, the cost of the merchandise sold was Tk. 8,000.
10 Paid half of the balance due to R. Huff & Co. & Paul and Waldo bros. less 3% discount.
15 Received cash refund from a supplier for damaged merchandise Tk. 250.
22 Paid premium due on one year insurance policy, cheque no. 20, Tk. 2500.
Instructions :
a. Prepare cash receipts and cash payment Journal.
b. Perpare control accounts and subsidiary accounts. 
c. Prove the agreement of the control accounts and the subsidiary account balance. 

8. Short Note (4X5) 20
(a) Accounting Concepts (b) Public and Privet Accounting (c) Manual Accounting System (d) FOB (e) Gross and net price.

SHORT TERM FINANCE 02

1. Rashana Company needs working capital OF TK 5 core. There are three alternative:-

(A) To forgo cash discount granted on the basis of 3/15, net 30
(B) To borrow from bank at 14% interest rate p.a. the bank requires 20% compensating balance on loan amount.
(C) To issue commercial paper at 12%. The cost of issuing the commercial paper would tk 50000 in each six month period.
  Required: Which method should the company choose?

2. Beta shoe company ltd is considering the following methods of financing short term capital requirement;
(I) Purchase raw materials on credit term 3/20, net 75
(II) Borrow tk 25 lac @ 12% interest maintaining 10% compensating balance on discount basis.
(III) Assigning account receivable and taking loan from mercantile bank at 12% interest. Annual credit sale of the company is tk 48 lac with average collection period of 60 days. The bank will sanction loan up to 80% of the face value of A/R. processing cost loan is 1% of the face value of A/R
(IV) Issuing commercial paper tk 30 lac the face value sold tk 28 lac for a period of 6 month. Floatation cost of the commercial paper is 2% of face value.
Required: which method is most suitable for the company?

3. Rexona ltd. has got 80 00 000 revolving credit agreement with IFIC bank. Bank at 12% interest rate p.a. and 2% commitment fee on the unused part of the loan. If the bank 80% of the total commitment You are calculating:
(I) What is the expected annual cost of credit?
(II) What is the EIR?
(III) What is the EIR if utilized 60% loan?
(IV) What is the EIR if utilized only tk 32 00 000 of the loan?

4. Assume that the annual credit sale of Confidence cement ltd. Is tk 10 lakh. With an average A/R balance of tk 2 lakh, and average collection period of 72 days. The company is considering rising of short term fund to meet its working capital requirement by selling its A/R at 16 % annual interest on face value of A/R with 20 % reserve against the A/R. what will be the cost of factoring A/R? Assume that factoring commission is 2% and past experience show that bad debt loss is 2.5%.

5. A company annual credit sale is tk 8 Core and average collection period is 90 days. Past experiences indicate that the bad debt loss was 2 % and collection and administration cost is tk 8 lacks. The factor charge 3 % commission and advance up to 90 % at 15% interest. How much the company will get as advance and what is the effective interest rate of factoring the EIR?
6. Issuing commercial paper at face value of tk 1.08 cores for six months. Cost of issue is tk 50000 per issue.

7. A company total credit sales for a year worth tk 12 lakh with an average collection period of 90 days. The company is planning to take loan from bank average the A/R at 13 % interest rate p.a. maintaining 10% reserve. Find the amount of loan utilization and EIR?

8. Beximco ltd. has got tk 6 lakh revolving credit agreement with IFIC bank at 12% interest rate per annum and 2% commitment fee on the unused part of the loan. (I) if the company utilized on an average 70% of the total commitment. Find out the amount of the utilization and effective interest rate. (II) What will happen if the average utilized of the loan 50%?
9. A commercial paper with a face value of tk 1000 each sold for tk 955 for 12 days. The floatation cost tk 5. Calculate the EIR?
10. X company sells goods for tk 40 00 000 on credit. It credit terms is 3/10, net 30 and if 30% of the customer accepts cash discount how much of the profit will be business have to avoid before tax?
11. A company has deducts to make a60dys loan of tk 100 000. Which is repayment on maturity at tk 1 10 000. Calculate EIR?

12. Mr. Joy borrowed tk 70 000 from IFIC bank at 14% interest. The bank deducts interest in advance. Compute the EIR IF:
(A) Principal amount of the loan and interest are repaid at maturity
(B) Interest is paid after every 60 days.
12. Range ltd needs to borrow tk 1 50 000 @10% interest p.a. with monthly installments for a one year period. Compute EIR?

SHORT TERM FINANCE

1. A company annual credit sale is tk 8 Core and average collection period is 90 days. Past experiences indicate that the bad debt loss was 2 % and collection and administration cost is tk 8 lacks. The factor charge 3 % commission and advance up to 90 % at 15% interest. How much the company will get as advance and what is the effective interest rate of factoring the EIR?

2. Assume that the annual credit sale of Confidence cement ltd. Is tk 10 lakh. With an average A/R balance of tk 2 lakh, and average collection period of 72 days. The company is considering raising of short term fund to meet its working capital requirement by selling its A/R at 16 % annual interest on face value of A/R with 20 % reserve against the A/R. what will be the cost of factoring A/R? Assume that factoring commission is 2% and past experience show that bad debt loss is 2.5%.
3. Rashana Company needs working capital OF TK 5 core. There are three alternative:-
(A) To forgo cash discount granted on the basis of 3/15, net 30
(B) To borrow from bank at 14% interest rate p.a. the bank requires 20% compensating balance on loan amount.
(C) To issue commercial paper at 12%. The cost of issuing the commercial paper would br tk 50000 in each six month period.
Required: Which method should the company choose?
4. Beta shoe company ltd is considering the following methods of financing short term capital requirement;
(I) Purchase raw materials on credit term 3/20, net 75
(II) Borrow tk 25 lac @ 12% interest maintaining 10% compensating balance on discount basis.
(III) Assigning account receivable and taking loan from mercantile bank at 12% interest. Annual credit sale of the company is tk 48 lac with average collection period of 60 days. The bank will sanction loan up to 80% of the face value of A/R. processing cost loan is 1% of the face value of A/R
(IV) Issuing commercial paper tk 30 lac the face value sold tk 28 lac for a period of 6 month. Floatation cost of the commercial paper is 2% of face value.
Required: which method is most suitable for the company?
5. Issuing commercial paper at face value of tk 1.08 core for six months. Cost of issue is tk 50000 per issue.
6. A company total credit sales for a year worth tk 12 lakh with an average collection period of 90 days. The company is planning to take loan from bank average the A/R at 13 % interest rate p.a. maintaining 10% reserve. Find the amount of loan utilization and EIR?
7. Beximco ltd. has got tk 6 lakh revolving credit agreement with IFIC bank at 12% interest rate per annum and 2% commitment fee on the unused part of the loan. (I) if the company utilized on an average 70% of the total commitment. Find out the amount of the utilization and effective interest rate.(II) what will happen if the average utilized of the loan 50%?
8. A commercial paper with a face value of tk 1000 each sold for tk 955 for 12 days. The floatation cost tk 5. Calculate the EIR?
9. X company sells goods for tk 40 00 000 on credit. It credit terms is 3/10, net 30 and if 30% of the customer accepts cash discount how much of the profit will be business have to avoid before tax?
10. A company has dec ded to make a60dys loan of tk 100 000. Which os repayment on maturity at tk 1 10 000. Calculate EIR?
11. Mr. joy borrowed tk 70 000 from IFIC bank at 14% interest. The bank deducts interest in advance. Compute the EIR IF:
(A) Principal amount of the loan and interest are repaid at maturity
(B) Interest is paid after every 60 days.
12. Range ltd needs to borrow tk 1 50 000 @10% interest p.a with monthly installments for a one year period> compute EIR?
13. Rexona ltd. has got 80 00 000 revolving credit agreement with IFIC bank. Bank at 12% interest rate p.a. and 2% commitment fee on the unused part of the loan. If the bank 80% of the total commitment. you are calculate :
(I) What is the expected annual cost of credit?
(II) What is the EIR?
(III) What is the EIR if utilized 60% loan?
(IV) What is the EIR if utilized only tk 32 00 000 of the loan? 

TEST EXAM 02 JOURNAL

1. Sold a personal investment in IBM stock for tk 9350 and deposited tk 9000 of the proceeds in a bank opened in the name of his new business able TV service.

2. Purchase for cash the repair supplies tk 1050, tools tk 825 and the used truck tk 2100 of a TV repair shop.
3. paid the rent of the shop space for three months in advance tk 600
4. Purchase additional tools for cash tk 150.
5. purchase additional supplies on credit tk 250
6. Jove the old company truck and tk 3000 in cash for a new company track.
7. completed repair works for walter and collect tk 50
8. paid for the repair supplier purchase in transaction 
9. Completed a repair work tk 5000 on account.
10. Purchase a used van for deliveries for tk 15000 of which tk 11000 paid in cash and the balance is due.
11. Borrowed tk 20000 cash from a bank on notes payable.
12. The two employee salaries are not paid last week 5 days work tk 500 each.
13. Purchase furniture tk 2500 in cash and paid tk 200 for freight.
  Journalized the transaction and show ledger account for cash, service revenue, tools, supplies, accounts receivable.

TEST EXAM 01 (BASIC ACCOUNTING)

(1) PASS JOURNAL ENTRIES FOR the following transactions Mr. picker.

2008 Jan (1) Started business cash tk 10000, cash at bank tk 15000, furniture tk 50000 and stock valued tk 5000.
 (1) Paid store rent for two month tk 2400. 
 (2) Borrowing capital from X tk 10000.
 (5) Purchase two motor car tk 12000 each for stock.
(7) Purchase goods from Modern stores tk 10000 and issue them a cheque for tk 5000.
(10) Returned goods to Modern stores Tk 1000.
(12) Purchase machinery by cheque tk 15000 and paid cash freight and carries tk 450 and installment charges tk 850 by notes.
(14) Sold house hold furniture for tk 2000 and paid the balance into business. 
(15) Sold goods to Mr. Y for tk 6000 and received a cheque for tk 4000 from them.
(17) Sold office equipment for tk 30000.
(18) The claim of Modern stores was settled for tk 3900 in full satisfaction of their claim.
(20) Received tk 1800 from Y and the balance 200 was unrealizable.
(22) Sold goods to Rahman Bros. tk 10000 and received from them a bill for tk 6000. The bill was discounted with the bank for tk 5800.
(25) Opened a current bank account with IFIC bank tk 10000.
(26) A cheque received from customer tk 5000 was collected by our IFIC bank and the bank charged tk 50 as collection charge.
(27) Interest on loan paid tk 2000.
(28) A motor car purchase for tk 200000 for personal use of the owner.
(29) Furniture purchase for tk 10000. And paid carries on tk 500 cash.
(29) The Bill discounted on 22 January 22 with the bank was dishonored.
(30) House rent (3/4 for office) paid by cheque for tk 2000 and salary paid for cash tk 2500.

Model Test 02

Adjusting Entries

(a) What is adjusting entries? What is the necessity of adjusting entries?

(b) Jaya stared her own firm. On January 2009 the trial balance is as following: 

Cash                                                              35000

Accounts receivable .                                 77000

Prepaid insurance                                      60000
Supplies                                                       24000
Office equipment                                       20000
Accounts payable                                       150000
Unearned service revenue                       40000
Jaya capital                                                 100000 
Service revenue                                         45000
Salaries exp.                                               40000
Rant exp                                                       79000

Additional data:
1. A utility bill for tk 15000 has not been recorded and will not be paid until next month.
2. The insurance policy is for a year.
3. Supplies on hand tk 13000
4. Tk 25000 of unearned service revenue has been earned at the end of the month.
5. Salaries of tk 15000 are accrued.
6. The office equipment has 5 year life and 10000 salvage value.
7. Invoice representing tk 30000 of service performed during the month have not been recorded as on January.
8. Sales include tk 5000 on sales or return for which neither conformation received. Nor the time limit expired. Cost of goods sold 4000
Required:
 Prepare the adjusting entries and adjusted trial balance.

Model test for hons part 01

Model Test

Sub: Finance

  A A factor will buy the company accounts receivable of tk 12 00 000 per month and annual credit sales is 144 00 000, an average collection period of 30 days. The factor will advance up to 85% of the face value of the receivable at 12% interest. The factor also charges 2% commission all receivable purchase. It has been estimated that he factor service will save tk 25000 per month consisting additional and bad debt loss. Find out the will get as advance and EIR.

OR
Aria chemicals limited is considering rising of tk 15 00 000 by issuing commercial paper for 120 days. Commercial paper will be sold at 8% discount. Stump duty charge will be 0.50% and rating charge 0.30% and issuing and other cost 18000. Calculate the cost of commercial paper and EIR.
  B Rexona LTD has got tk 80 00 000 revolving credit agreement with standard bank at 12% interest and 2% commitment fee on the unused proportion of credit. If the company utilized on average 80% of the total commitment, you are required to calculate:-
1. What is the expected annual cost of this credit?
2. EIR
3. What is EIR if the company utilized only tk 32 00 000 as a loan of total commitment?  

Basic Accounting

Special Journal

1. What is subsidiary ledger? Explain advantage of subsidiary ledger.
2. In July 2007 the following selected the following transaction. All purchase and sales were on account. The cost of all merchandise sold was 70% of sales price.
July 1 Purchase merchandise from D. company tk 7000
 2 Received freight bill from D company tk 400
 3 Made sales to L company tk 1300 and to Franklin Bros tk 1900
 5 Purchase merchandise from G company tk 3200
 8 Received credit on merchandise returned to G company tk 300
 13 Purchased store supplies from Brent supply tk 720
 15 Purchase merchandise from D company tk 3600 and R Company 2900
 16 Made sales to M company tk 3450 and Franklin brs tk 1570
 18 Received bill for advertising from marlin adversities tk 600
 21 Sales were made to E company tk 310 and P company tk 2300
 22 Granted allowance to E company for merchandise damaged in shipping tk 40
 24 Purchase merchandise from g company tk 3000
 26 Purchase equipment from G company tk 3000
 28 Received freight bill from G Company for July 24 tk 380
 30 Sales were made to m company tk 4900
Required:
A. journalizes the transaction above in a purchase journal and sales journal.
B. post the general and subsidiary ledger

Basic Accounting

Merchandise Inventory

(a) Differentiate between asset and expense with the help of example.

(b) Compare the perpetual and periods inventory method with its accounting procedure.
(C) Presented below is selected transactions for the M. Company during the month of September 2008. You are to pass journal entries under both (i) perpetual system (ii) periodic systems. And that credit sales have terms of 2/10, n/30 & cost of goods sold 70% of sales.
sept. 4 purchase merchandise on account from c. company at a cost tk 50000 terms FOB shipping point with 2/10, n/30.
sept. 5 paid freight charge of tk 2000 on merchandise purchase from C. Company 
sept. 6 returned damage goods costing tk 7000 received from c company
sept. 8 sold merchandise to S. co. on account for tk 21000
sept. 9 purchased delivery equipment on account for tk 28000
sept. 10 goods worth tk 3000 returned by S.co. as they were not up to satisfaction.
sept. 13 paid the amount due to C. company in full
sept. 15 received balance due from s. co.
sept. 20 sold merchandise for cash tk 10000

journal

(A) Discuss accounting cycle?
(B) Michelle divine opened a law office Divine attorney at law. On may 1 2004. On May 31st the balance sheet cash tk 10000 account receivable tk 2500, supplies tk 1000. Office equipment tk 6000 aaccounts payable tk 4500 and michelle divine capital 15000.
June 2 collected tk 1200 of accounts receivable
 4 paid tk 3000 cash on accounts payable
 7 purchase office furniture of tk 4000 and paying tk 2500 in cash
 9 earned revenue of tk 10000 of which tk 7500 is due in july
 12 divine leering additional capital in cash tk 5000 and personal computer tk 10000
 15 accrued salaries tk 2000, rent 2500 and advertising 1200
 22 withdrew tk 1400 for personal used
 25 received tk 20000 from one bank money borrowed on a notes payable
 30 cash paid for salaries 2000 rent 2500 and advertising 1200
Instruction:
I. prepare ledger for each account
II. Trail balance made end the month 

Hons part 03 (statistics)

Arranging data and plots -2009

MODEL MATH-01


1. What is data? Describe the methods of collection of data with merits and demerit.
2. What is the frequency distribution? Discuss it characteristics. Describe the steps of constructing a frequency distribution.
3. What do you mean by classification, tabulation and graphical representation? Discuss the necessarily.
4. What is frequency table? Discuss the different parts of the table.
5. Explain the following: (a) Histogram (b) Ogive curve (c) Frequency curve (d) frequency polygon
6. Present the following data of the wages of 40 workers in a company are given below:
16, 18, 53, 66, 61, 60,22, 26, 25, 27, 29, 24, 31, 36, 37, 38, 49, 48, 46, 12, 15, 45, 42, 44, 45, 43, 48, 35, 38, 33, 36, 49, 46, 41, 50, 52, 59, 56, 57, 50, 63
Required: 
Part 1: Construct a frequency distribution by stem and leaf diagram.
Part 2: Constructing a frequency distribution by exclusive and inclusive method.
Part 3: Constructing an absolute frequency distribution and relative frequency distribution.
Part 4: Calculate percentage frequency and frequency density.
Part 5: Calculate cumulative frequency and cumulative relative frequency distribution.
Part 7: Draw Histogram and find Mode.
Part 8: Draw frequency polygon and frequency curve
Part 9: Draw Ogive curve and hence find the Median.
Part 10: Draw less than Ogive and find the Median.
Part 11: Draw More than Ogive
Part 12: Draw an Ogive curve and hence find the limit of central 50% from the workers.
Part 13: Draw an Ogive curve and hence find the Range of central 50% from the workers.
Part 14: Draw an Ogive curve and hence find the limit of middle 20% from the workers.
Part 15: Draw an Ogive curve and hence find the Range of middle 20% from the workers.
Part 16: Draw an Ogive curve and hence find the number of worker who earned lies between tk 25 and tk 55.
Part 17: Draw an Ogive curve and hence find the number of worker who earned tk 35 and above/ more than tk 35.
Part 18: Draw an Ogive curve and hence find the number of worker who earned less than tk 45.

MUNNA SIR CELL: 01670749855, 01912469789 Address: 212/5-Ga west Rampura Ulon Road
BASIC ACCOUNTING, FINANCE, BUSINESS MATHEMATICS, BUSINESS STATISTICS

Business math for hons part 02

Application for diff. calculus

1. Find the inflection point of the function Y = x3-3x2+3x
2. Show that the function Y = xe-x has a point of inflection at x = 2
3. The difference of two numbers is 100. The square of the larger one exceeds five times the square of the smaller one by an amount which is maximum, Find the numbers.
4. Prove that the curve given by 3y = x3 – 3x2 – 9x + 11, has a maximum at x = -1, minimum at x= 3, and point of inflexion when x=1
5. The cost C of manufacturing a certain article is given by the formula C= 5+48\x + 3x2 where x the number of articles manufactured. Find the minimum value of C.
6. A company finds that it can sell out a certain product that it produces, at the rate of tk 2 per 
Unit. It estimates the cost function of the product to be tk. [1000+1/2(q/50)2] for q units produced. (I) find the expression for the total profit, if q units are produced and sold.
(II) Find the number of units produced that will maximize profit. (III) What is the amount of this maximum profit? (IV) What would be the profit if 6000 units are produced?
7. A sitar manufacturer notices that he can sell x sitars per week at p taka each where 5x= 375- 3p. The cost of production is (500+ 13x+ x2/5) taka. Show that the maximum profit is obtained when the production is 30 sitars per week.
8. If the demand function of the monopolist is 3q= 98-4p and average cost is 3q+2, where q is output and p is the price, find maximum profit of the monopolist.
9. The cost function of a firm is C= 300x - 10x2 + 1/3 x3, where C stands for cost and x for output. Calculate (i) output a marginal cost is minimum. (ii) Output at which average cost is minimum. (iii) Output at which average cost is equal to marginal cost.
10. Find the profit maximizing output given the following revenue and cost functions: R(q) = 1000q-2q2, C(q)= q3-59q2+1315q+2000. Also find the maximum profit. 
11. The total revue function of a firm is given as R=21q-q2 and its total cost function as C = q3/3 - 3q2-7q+16, where q is the output. Find (i) the output at which the total revenue is maximum and minimum.
12. The demand function of a consumer good is x= 1/3(25-2p), where x is the number of units and p is the price. The average cost per unit is tk 40. Find: (a) the revenue function R in terms of price P; (b) the cost function C (c) the profit function P, (d) the price per unit that maximizes the profit function, and (e) the maximum profit.
13. The demand function faced by a firm is P= 500-0.2x and its cost function is C=25x+10000 where p=price, x=output and C=cost. Find the output at which the profit of the firm is maximum; also find the price it will charge.
14. The production function of a consumer product is given by Q= 40x + 3x2 – x3/3, where Q is the total output and x is the units of input. (i) Find the number of units of input required to give maximum output. (ii) Find the maximum value of marginal product. (iii) Verify that when the average product is maximum, it is equal to marginal product.
15. The total cost function of a firm is C=x3/3 – 5x2 +28x +10, where C is total cost and x is output. A tax at the rate of tk 2 per unite of output is imposed and the producer adds it to his cost. If the market demand function is given by p=2530-5x, where tk p is the price per unit of output, find the profit maximizing output and price.

Capital structure( Theory)
(Selected problem)

Problem–01: From the following information you are required to calculate overall cost of capital.
EBIT tk 12, 00,000
Debt tk 35, 00,000
KD 12.5%
Ke 20%

Problem–02: Keya company cost of capital (ke) is 10% and cost of Debt (kd) is 8%. When the company manage their capital 100% from equity, the overall cost of capital is 10%. If the company 50% capital comes from debt, what will be overall cost of capital?

Problem–03: X Company has 12 million shares of common stock outstanding. Its net income after taxes is tk 54 million and this level would continue indefinitely. Investors who purchase X company stock require a 12.5% return on their investment.
Required: (1) What is the total value of X company common stock?
(2) What is the value on a per share basis?

Problem–04: Form the following selected data; determine the value of the firms, P and Q belonging to the homogeneous risk class under the net income (NI) approach.
Name Levered firm P Un levered firm Q
EBIT tk 225000 tk 225000
Interest @ 12% tk 75000 Nil
Cost of capital 20% 20%
Which of the form has an optimum capital structure under the NI approaches?

Problem-05: The A Company’s expected annual net operating income (EBIT) is Tk.50000.The Company has 10% debt Tk200000.the equity capitalization rate (ke) of the company is 12.5%. The number of shares of company is 2400.
Required: (1) find out total value of the firm (V)
(2) Find out Ko of the firm
(3) Determine the market price of share

Problem–06: Lipton trading company earning before interest and tax (EBIT) tk 400000. The equity capitalization rate (ke) is 12%. 16% interest is on a bond involving a total interest of tk 160000.the number of shares of the company is 10000.
Required: (1) Total market value of the share(S)
(2) Total market value of Debt (B)
(3) Total market value of firm (V)
(4) Overall capitalization rate (KO)
(5) Market price of share (Po)

Problem–07: A company with net operating earning (EBIT) of tk 300000 is attempting to evaluated number of possible capital structure, given below which of the capital structures will you receive any way?
Capital structure Debt in capital structure kd% ke%
1 300 000 10 12
2 400 000 10 12.5
3 500 000 11 13.5
4 600 000 12 15
5 700 000 14 16

Problem–08: (A) The expected earnings before interest and tax (EBIT) is tk 3 lakhs cost of equity capital (ke) is 15% and cost of debt capital 8% and the amount of loan is the 10 lakh. Find out the value of the company and weighted average cost of capital (Ko) according to the net income (NI) approach.
(B) Now if the company wants to change the degree of financial leverage by taking loan of tk 15 lakh instead of tk 10 lakh. What will be the effect on the total value (V) and overall cost of capital (Ko) of the company.
(C) Construct a graph showing the position of Ko, ke and kd at different capital structure.

Problem–09: Form the information you are required to calculate equity capitalization rate (ke):
Interest (kd) 12.5%
Overall cost of capital (ko) 16.41%
Debt equity ratio 48:52

Problem–10: Expected Net operating income (EBIT) of a company tk 500000.12% debt capital of the company is 500000. if the overall cost of capital (ko) of the company is 16%. What will be the market value of the company (V) and cost of equity (ke). Effort commerce coaching
 
Problem-11: A Company’s expected annual net operating income Tk 50,000 : cost of debt 10% : outstanding debt Tk 2,00,000. If the overall capitalization rate is 12.5%, what would be the total value of the firm and equity capitalization rate?

Problem-12: Net operating income of D Ltd. Was Tk 1,00,000 average cost of capital was 10% and an initial debt of Tk 5,00,000 at 6% rate of interest. Find out the market value of the firm, the market value of share and weighted average cost of capital.

Problem-13: M. M. Company has Net operating income (EBIT) of Tk 24,00,000 an investment of Tk 12,00,000, in assets. It can raise debt at a 12% rate of interest and overall capitalization rate is 15%.
Required : (Using the NOI approach)
1. Total Market value of the firm.
2. Total Market value of share capital.
3. Equity capitalization rate, ie the firm has;
a. No debt
b. Debt Tk 3,00,000
c. Debt Tk 6,00,000

Problem-14: Hall & Taylor’s current operation income is Tk 4 lakh. The firm has Tk 13 lakh of 10% debt outstanding. The cost of equity capital is 15%.
(i) Determine the current value of the firm using traditional approach.
(ii) Calculate the firms overall capitalization rate.

Problem-15: A Company currently has Tk 10 lakh in its capital structure and all in an equity capital of 10 thousand shares. The Company wants to maintain its capital structure in book value. The Company is planning to issue debt to retire its stock. The cost of debt and the price of the stock at various levels of debt are given below. It is assumed that the new capital structure would be each all at once by purchasing stock at the current market price. Expected Net operating income (EBIT) of the company is Tk 2,00,000.

Capital structure,   Ratio of Debt capital,    Cost of Debt capital,    Price of stock per share
               1                               --                                       --                                 100
               2                               10%                          10%                                      105
               3                               20%                          10%                                      108
               4                               30%                          10.5%                                   110 
               5                               40%                          11%                                        111.5
               6                               50%                          12%                                         105
               7                               60%                          14%                                            95

Required :
Find out the optimum capital structure.

Time value of Money:

1. Car choice is offering free credit on a Mercedes car of tk 20 lakh. You pay tk 5 lakh down and then the balance at the end of 2nd year tk 6 lac, 3rd year 4 lac, 4th year 3 lac and 5th year tk 2 lakh. On the other hand car Impo does not offer free credit but will give you tk 80000 off the list price. If the interest rate is 12 percent, which offer should you prefer? Why?

2. Jawad limited is creating a sinking fund to redeem its preference share capital of tk 5 00 000 issued on 1st January , 2001 and maturing on 31st December , 2010, the first annual payment will be made on 31st December, 2001 and expects the fund will earn 8% per year. How much will be the amount of sinking fund payment?

3. Your father has promised to give you tk 100 000 in cash on your 25th birthday, today is your 16th birthday. He wants to know three things:

(a) If he decides to make annual payment into a fund after one year, how much will each have to be if the fund pays 8%?(b) If he decides to invest a Lump sum in the account after one year and let it compound annually, how much the Lump sum be?(c) If in a payments are made at the beginning of the year, how much the value of the annuity?

4. ABC co. makes an agreement with a bank to make deposits as follows:

Tk 500 is to be deposited at the end of year 1
Tk 1000 is to be deposited at the end of year 2
Tk 1500 is to be deposited at the end of next 13 year .To what sum will the above deposits accumulate at the end of 3-15th year, assuming interest is 10%?

5. Mr. Shakil borrowed tk 15000 at 14% annual rate of interest to be repaid over three years. The loan is amortized into three years. The loan is amortized into three equal annual end of the year.

(i) Calculate the annual end of year loan amount.

(ii) Prepare a loan amortization Schedule.

6. How much the bank will pay after December 31, 2005 start depositing tk 500 in the first week of every calendar month from January 2000 and yearly interest is 12%.

7. Eastern housing lid. Has been doing real estate business. You have selected an apartment of Eastern View at Banani costing tk 30 lakh. You have three offers:

(i) Pay full in cash
(ii) Pay 20% of the cost in cash immediately and pay tk 2.3 lakh in each installment for next fifteen years. 
(iii) Pay 30% of the value cash take a loan of tk 21 lakh from DBH at 15% interest to be repaid in equal monthly installment over next 16 years.

Which offer should you accept? Assume 12% opportunity cost?

8. A bank offered you an annuity of tk 1800 for 10 years if you invest tk 12000 today. What rate of return would you earn?

9. At what rate of investment interest compounding annually will sum of money increase by 200% in 10 Years?

10. Find the number of years at which money will triple it self at 10% interest rate annually.