problem 1)a) Transactions of the business for March 2010 are given below:

Year 2010          Particulars                                                  Amount(Rs.)
March 01          Commenced business                                      10, 000
March 03      Paid two months rent in advance for a shop            1, 000
March 05      Purchased supplies on credit                                      700
March 07       Purchased machineries                                          5, 000

You are required to:

• Prepare journal entries for the above transactions

• Post the entries from the journal to the following ledger accounts

I. Supplies account

II. Prepaid rent account

III. Cash account

IV. Machinery account

problem 2)a) A man arranges to repay Rs. 1,00,000 bank loan in 10 equal annual instalments at 12% per year compounded quarterly. Immediately after the 3rd payment, he borrows another Rs. 50,000 also at the same interest rate. When he borrows Rs. 50,000 he talks to the banker into letting him repay the remaining debt of the first loan and the entire amount of the second loan in 12 equal annual payments. The first of 12 payments would be made one year after he receives Rs. 50,000. find out the amount of each of 12 payments?

b) Using following information complete balance sheet given below:

Total debt to Net worth                                                                                      0.5:1
Total assets turnover ratio                                                                                    2:1
Gross profit                                                                                                        30%
Average collection period (based on 360 days a year)                                          40 days
Acid test ratio                                                                                                  0.75:1
Inventory turnover ratio (based on cost of goods sold and year end inventory)      3 times

Balance sheet

Liabilities                        Amount(Rs)           Assets                     Amount(Rs)    
Accounts payable            ------------             Cash                      --------------       
Share capital                   2, 00, 000         Accounts receivables      --------------
Retained earnings            3, 00, 000             Inventory                   ---------------
-------------------          -------------        Plant and equipment       --------------
Total                             -------------              Total                        -------------