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M.48 An Aid to Accountancy—CBSE XII

PART B

18. Non-cash transactions are those transactions which do not result in any inflow and
outflow of cash and cash equivalents. For example, issue of shares for purchase of fixed
assets.
19. Operating Activity because Advances and Loans made by financial enterprises is their
main operating activity (or principal revenue producing activity).

20. (a) No. Moon Ltd. is not correct in way of its presentation.
Calls-in-Arrears of ` 5,00,000 is to be shown in the Note to Accounts on Share
Capital as a deduction from the amount of Subscribed but not Fully paid-up Capital
under Subscribed Capital.
Calls-in-Advance of ` 2,00,000 is to be shown under the head ‘Current Liabilities’
and sub-head ‘Other Current Liabilities’.
(b) (i) To provide information about economic resources and financial obligation of
a business.
(ii) To provide information about the earning capacity of the business.
(c) Operating cycle means the time between the acquisition of assets for processing
and their realisation in Cash or Cash Equivalents.
21. (a) No. I do not agree with the given statement. Comparative Statements consider
only the monetary information in the analysis while qualitative aspects, i.e.,
non-monetary aspects like quality of management, efficiency of workers, public
relations, etc., are ignored.
(b)
COMPARATIVE STATEMENT OF PROFIT AND LOSS (INCOME STATEMENT)
for the years ended 31st March, 2017 and 2018
Particulars Note 31st March, 31st March, Absolute Change Percentage
No. 2017 2018 (Increase/ Change (Increase/
Decrease) Decrease)
` ` ` %
( C )
(A) (B) (C = B – A) D = A ¥100
I. Revenue from Operations 6,00,000 9,00,000 3,00,000 50.00
II. Expenses:
(i) Cost of Materials Consumed 3,60,000 4,50,000 90,000 25.00
(ii) Other Expenses* 48,000 67,500 19,500 40.63
Total Expenses 4,08,000 5,17,500 1,09,500 26.84
III. Net Profit before Tax (I – II) 1,92,000 3,82,500 1,90,500 99.22
Less: Income Tax @ 40% 76,800 1,53,000 76,200 99.22
IV. Net Profit after Tax 1,15,200 2,29,500 1,14,300 99.22
*Other Expenses (2016–17): 20% of (` 6,00,000 – ` 3,60,000) = ` 48,000
(2017–18): 15% of (` 9,00,000 – ` 4,50,000) = ` 67,500.