Question

Q3.Balance Sheet Question Marks 10) Taha is a new student in Business Administration with prior no accounting background. He is given a task to make a statement showing the financial position of Zee Health systems on 30 June 2020 using information provided in the table. The information is dispersed in the table. You are required to make a neat and clean statement specifying each element given. Vehicles 120,000 VAT Payables 5000 Notes Payable 4500 Inventories 201,500 Current Liabilities Beds for patients 112,500 Salaries Payable 72,500 X-ray machines Accounts Receivables 10,000 Accounts Payable 172,000 Short-term Loans 50,000 Shares of other firms 32000 Fixed Assets Land 440,000 Cost of Goods Sold 42,000 Retained Earnings 317,225 Long term Liabilities Prepaid Insurance 4,200 Prepaid Insurance 4200 Cash equivalents 300,000 Revenues 135,000 Owner's Equity Building 300,000 Current Assets Long Term Loans Cash 84,150 Advertising Expense 32,000 Instructions: • Zee health systems have acquired a loan for 7 years equivalent to your registration number. • The cost of buying X-ray Machines for the hospital is same as your registration number. • Hospital issued 25,000 common shares at Rs.8 per share. • Hospital issued 10,000 preferred shares at Rs.5 per share. Building of the hospital has a useful life of 8 years. After 8 years, the salvage value of the building would be approximately Rs.75000. Page 2 of 3 Beds have useful life of four years with no salvage value at the end of useful life.

this is what i get, i don't know whether its trick or whatelse

Answer 1

As given in the question, we have to prepare statement showing financial position of an enterprise. When it is asked to prepare statement of financial position, it means to prepapre a balnce sheet that show Equity, Liabilities and Assets of an enterprise at the end of the financial year. Given below is the financial position of an enterprise along with the adjustments given in instructions:

Note: There is a difference in total of aasets and liabilities as the amonts are not mentioned int he question. However, the both should be tallied. Items are properly appropriated under correct heads.

Statement of Financial Position

for the year ending 30th June, 2020

S.No	Parrticulars	Amount	Total Amount
A.	Owner's Equity
	Common shares = 25,000 shares @8per share	2,00,000
	Preference shares = 10,000 shares @ 5 per share	50,000	2,50,000
	Reserves & Surplus (Retained Earnings)		3,17,225
B.	Liabilities
	1) Non current Liabilities
	Long Term Liabilities	(Amount not given in the question)
	Long terms loans	(Amount not given in the question)	-
	2) Non-Current Liabilities
	Notes Payable	4500
	Salaries Payable	72,500
	Accounts Payable	1,72,000
	Short-term loans	50,000	2,99,000
	Total		8,66,225
C	Assets
	1) Non Current Assets
	Vehicles	120,000
	Hospital Beds (Working Note 1)	84,375
	Shares of other firms (Investment)	32,000
	Land	4,40,000
	x-Ray Machines	(Amount not given in question)
	Building (Working Note 2)	271,875	9,48,250
	2) Current Assets
	Inventories	201500
	Accounts Receivable	10,000
	Prepaid Insurance	4,200
	Cash Equivalents	3,00,000
	Cash	84,150	5,99,850
	Total		15,48,100

Notes

1) Calculation of depreciation of Beds

Depreciation = Cost -Salvage Value / No. of useful years

= 1,12,500 - 0 / 4

= 28125

So, the amount to be included in balance sheet would be after depreciation = 1,12,500 - 28125

= 84,375

2) Calculation of Depreciation of Building

Depreciation = Cost -Salvage Value / No. of useful years

= 3,00,000 - 75000 / 8

= 28,125

So, the amount to be included in balance sheet would be after depreciation = 300000- 28125

= 2,71,875