Tag Archives | Problems

Top 8 Problems on Redemption on Preference Shares

The following points highlight the top eight problems on redemption on preference shares with their relevant solutions. Illustration 1: On 31st March, 2012 the balance sheet of Utopia Limited stood as follows: Illustration 2:  Following is the Balance Sheet of R. Ltd. as on March 31, 2012: Illustration 3: On 1st April, 2012 the following […]

Top 6 Problems on Inter-Company Holdings of Shares

The following points highlight the top six problems on inter-company holdings of shares with their relevant solutions. Illustration 1: The abridged balance sheet of Vidur Ltd. as at 31st March, 2012 was as follows: Illustration 2: The following are the summarized Balance Sheets of X Ltd. and Y Ltd. as on 31st March, 2012: Illustration […]

5 Major Problems in the Determination of Cost of Capital

This article throws light upon the five major problems in determination of cost of capital. The problems are: 1. Conceptual Controversies Regarding the Relationship between the Cost of Capital and the Capital Structure 2. Historic Cost and Future Cost 3. Problems in Computation of Cost of Equity 4. Problems in Computation of Cost of Retained […]

Problems Relating to Accounting for Long-Term Assets

In this article we will discuss about the problems relating to accounting for long-term assets. First, what is the original acquisition cost of a particular long-term asset. Second, how should the amount of expense or period write off should be determined and allocated against yearly revenue to reflect the asset’s consumption. The other related issues […]

Top 5 Problems on Financial Ratios (With Solution)

List of top five problems on financial ratios with its relevant solution. Problem # 1: The working capital of ABC Ltd. has deteriorated in recent years and now stands as under: (a) Compute the current and quick ratios. (b) A further bank loan of Rs. 50,000 against debtors is under negotiation. Assuming the loan is […]

Problems of Cost System in Indian Companies

The following points highlight the seven major problems of cost system in Indian companies. The problems are: 1. Inadequate Capturing of Direct Material Costs 2. Excessive Emphasis on Labour Costs 3. Functional Classification of Overhead Costs 4. Simplistic Allocation Bases 5. Inadequate Attention to Service Departments and Service Organizations and Others. Problems of Cost System: […]

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