BIWHEELS

T.no. Date Bank/Cash Inventory Equipment Receivables = Bank Loan

1 02.01.2002 400000 =
2 02.01.2002 100000 = 100000
3 03.01.2002 -15000 15000 =
4 04.01.2002 -120000 120000 =
365000 120000 15000 = 100000
5 05.01.2002 10000 =
6 06.01.2002 -10000 30000 =
7 07.01.2002 1000 -1000 =
8 08.01.2002 -800 =
9 10.01.2002 -4000 =
352000 159200 14000 100000
10 15.01.2002 2750 -2000 =
11 25.01.2002 =
12 30.01.2002 -500 =

TOTAL 354250 157200 14000 = 100000

13 16.01.2002 -10000 -10000

14 16.01.2002 -25000 50000
15 16.01.2002 -4000

TOTAL 315250 207200 14000 = 90000

Note Payable Rent Payable OE
400000

400000
10000
20000

-800
-4000
25200 400000
750
350 -350
-500

25200 350 399900

25000
-4000

46200 350 399900

Capital introduced
Bank Loan
Store Equipment acquired
Cycles Bought

Parts bought from Shimano

Cycles Bought from Schwinn
Store Display sold
Bicycles returned to Schwinn
Shimano payment due done

15 Jan : Bicycles sold for cash. Cost 2000 sold for 2750
25-Jan - Rent is due for the month $ 350 - Accrual concept
30-Jan - Paid other expenses in cash $ 500

bank loan paid

inventory puchased from Cannondale
Paid Schimano

due for the month is deducted from OE

if due paid then deduct from bank a/c
INCOME STATEMENT

Particulars Debit ₹ Credit ₹ Income

8.5% Convertible Debentures 317,952
Plant and Machinery (A - B) 460,000 Income from Sales
Equity Share Capital (L- B) 1,150,000 Other Income
9% Preference Share capital (L- B) 523,489
Accumulated Depreciation 18,768 TOTAL
Building (A - B) 478,492
Trade debtors (A - B) 33,718 EXPENSES
Computer and hardware (A -B) 106,628
Trade creditors L- (B) 175,214 Purchase of Material
Reserves and surplus (L- B) 70,380
Sale of goods (I) 207,552
Purchase of material (E) 182,988
Rent (I - E) 99,682
Insurance I- € 27,278
Salaries I- € 149,408
Advertising I - € 70,738 TOTAL
Stock (A - B) 100,998
Bank Overdraft (L - B) 83,315 P&L
Furniture and Fixtures (A - B) 828,828
Depreciation 7,912
Sale of Scrap 178292
Invetment in Associates 178,292
Total 2724962 2724962
Sale of goods (I) 207,552
Sale of Scrap 178292

385,844

Purchase of material (E) 182,988

Rent (I - E) 99,682
Insurance I- € 27,278
Salaries I- € 149,408
Advertising I - € 70,738
Depreciation 7,912

538,006

-152,162
VIMAL CORP
T.no. Bank/Cash Bonds Inventory Equipment Receivables = Bank Loan

1 100000 =
2 45000 = 45000
3 -60000 60000 =
4 16000 =
5 4700 =
6 -5200 =
7 10000 =
8 -28000 =
9 -11000 =

TOTAL 11800 45000 4700 60000 10000 = 45000

DELTAPHOTO

T.no. Bank/Cash Bonds Inventory Equipment Receivables = Bank Loan

1 30000 =
2 9000 =
3 -12000 12000 =
4 15000
4 -5000 =
5 12000 =
6 19000 =
7 -3700 =
8 -4000 =
9 =

TOTAL 37300 4000 12000 19000 0

retained earning=net income-dividends

net income=revenue=-expenses

REVENUE, DIVIDENDS, EXPENSES all come under Capital columns

assets that cannot be converted into cash is fixed assets e.g. land, building
assests that can converted to cash in the next 1 year is called current assets e.g. inventory, a/c receivable
short term liabilites= current liabilites e.g. a/c payable, rent payable
fd= cash/current closing stock would be non current assets
bank loans that are short termed loan is current liabilites or else it is non-current liabilites
 A/c Payable Rent Payable OE

100000 Shares issued

Bonds issued by loan
Purchased trucks by cash
16000 Services performed amt received, as it is alread
4700 a/c payable
-5200 rent paid already, not payable, so wont be adde
10000 amt receivables
-28000 salaries paid
-11000 dividend paid to shareholders

4700 0 81800

CAPITAL
A/c Payable Rent Payable Dividends Revenue OE

30000 Jan 1 Manohar invested Rs 30,000 cash

9000 2 Bought supplies of photographic m
5 Bought photographic equipment f
15000
-5000 7 Received fees for photographic se
12000 13 paid creditor for supplies Rs 5000
19000 18 Manohar invested further Rs 120
-3700 22 Billed customer for services Rs 19
-4000 27 Paid office rent, Rs 2500, and ele
11500 -11500 30 Paid dividends, Rs 4000
31 Prepared the monthly payroll to
15500 56800 The salary is to be paid on 1st feb, so it will be i

Income Statement

Sales
under Capital columns

y, a/c receivable
ed amt received, as it is already received ,it wont be added to receivables

, not payable, so wont be added to a/c payable

shareholders

ohar invested Rs 30,000 cash in the company’s share capital (shares of Rs 10 each)
ght supplies of photographic materials on credit, Rs 9000
ght photographic equipment for cash, Rs 12000

eived fees for photographic services, Rs 15000

d creditor for supplies Rs 5000
nohar invested further Rs 12000 cash in the company’s share capital
ed customer for services Rs 19000
id office rent, Rs 2500, and electricity charges Rs 1200
id dividends, Rs 4000
epared the monthly payroll to be paid on February 1, Rs 11500
e paid on 1st feb, so it will be in accoutns payable and expenses to be incurred
LONE PINE CAFÉ CASE Assets

T.no. Date Bank/Cash F&B License Fee Inventory Equipment

1 01.11.2005 48000
2 01.11.2005 21000
3 01.11.2005 -53200 53200
4 01.11.2005 -2800 2800
5 01.11.2005 -1428 1428
6 01.11.2005 -1400

Total 10172 2800 1428 0 53200

7 30.03.2006 -2100
8 30.03.2006 -370
9 30.03.2006 -595
10 30.03.2006 -2445
11 30.03.2006
12 30.03.2006 -6731

Total 1341 2430 833 0 50755

INCOME STATEMENT

SALES 43480
RECEIVABLES 870
TOTAL SALES 44350

EXPENSES

Monthly payments to 23,150

partners*
Wages to part-time 5,480
employees
Interest 540
Telephone and
3,270
electricity
Miscellaneous 255
Rent payments 7,500
owed
cost of sales 1,583
11969 suppliers
Food and
Depreciation beverage 10,016
2445 suppliers
Total
License Fee
595 purchase 11,599
cost of
sales 11969
Profit/Loss -10,854
 Liabilities Capital

A/c Receivables = = Bank Loan A/c Payable Rent Payable Capital

= = 48000
= = 21000
= =
= =
= =
= =
= =
= = 21000 48000
= =
870 = = -2100 870
= = -370
= = -595
= = -2445
= = 1583 -1583
= = -6731
= =
870 = = 18900 1583 37146

diff between salary and wages is that wages can be on daily basis, salary paid

Consumption of F&B = Opening + Purchases - closing stock

11969

depreciation is non-cash expense, because of accrual/matchign concept

so depreciation is in income expense

1. Accrual concept and the matching concept Revenue Recognition Non cash expense

licence fee Ski instructors Depreciation

F&B
 Partnership Fund
Bank Loan
Equipment purchase
Food & Beverages
Trade License
Cash Register pruchase

a/c receivables & loan payment

F&B bal
License fee
Depreciation
A/c payable
Balance Figure

an be on daily basis, salary paid for whole month

closing stock

accrual/matchign concept

cash expense Owner' Equity decreased due to business losses

if partners had not taken salaries the business would have profitable
Particulars Debit Amt Credit Amt
(ASSETS) (LIABILITIES) Particulars
Cash 14000
Notes Payable 10000
Merchandise 40000 Land
Paid in Capital 80000 Trade Creditors
Land 14000 Surplus & Reserves
A/c payable 8000 Sales
Furnitures & Fixtures 3000 Purchase
Long Term Debt 12000 Rent paid
Bldg 24000 Insurance paid
Machinery & equipment 15000 Salaries paid
Adv
TOTAL 110000 110000 Stock
Bank OD
Equipmen

sales of goods credit 7% Debentures

supplies expense debit Plant & machinery
a/c receivable debit Equity share
a/c payable credit 7% pref capital
supplies inventory debit Depreciation
dividends payable credit Building
accmulated depre credit Trade Debtors
depre debit
prepaid rent debit Total
equipment debit
COGS debit
retained earnings credit
Debit Amt Credit Amt Items
(ASSETS) (LIABILITIES)

92720 A
152360 L
61200 Accumulated profit L
180480 I
159120 E
86680 E
23720 E
129920 E
61512 E
87824 A
72448 L
402480 A

shares issued to
people, so its called
debentures. Low risk,
276480 Low return C
406880 A
714400 C
455208 High risk, high return. C
16320 E
416080 A
29320 A

1912576 1912576
 TRIAL BALANCE SHEET ANALYSIS

ASSETS AMT LIABILITIES AMT

Inventory 32780 Reserve surplus 101280
Bank bal 9260 Equity 463930
F&F 95800 Trade creditors 18500
Plant & machinery 209340 bank loan 24750
Building 183560 loss -100270
Trade debtors 23600
Provision for depreciation/accumulated depreciation -72600
insurance 26450
TOTAL 508190 508190

INCOME STATEMENT

Sales 156700

Purchase of raw materials 96800

Lease 54900
Salaries paid 68650
Internet charges 30980
Depreciation 5640
TOTAL 256970
LOSS -100270
q) why purchase of raw material not in BS ?
q) diff amongst depreciation, provision for depreciation, accummulated depreciation

1st yr assume u have an asset of 10k

every year value depreciates 1k

depreciation value will be in income statement every year

2nd yr asset value will become 9k
3rd yr asset becomes 8k

but based on historical cost concept I will always set asset value as 10k
so the amt will always be added in accumulated depreciation like
yr1 10000
dep1 -1000 total 9000 but I will set my depreciation value every year in the income
yr2 10000
dep2 -2000 total 8000
yr3 10000
dep3 -3000 total 7000
this is the accumulated depreciation since the
historical date of the asset . Will be added every ye
alue every year in the income statement

ed depreciation since the

asset . Will be added every year.
Scenario 1
Items Specific Identification LIFO FIFO WA
M T W

M@30 30 0 0 30 30 30
T@40 0 40 0 40 40 40
W@56 0 0 56 56 56 56

42 Avg
Thursday Sales @ 90

Scenario 2
Items Specific Identification LIFO FIFO WA
M T W T

M@30 30 0 0 0 30 30 30
T@40 0 40 0 0 40 40 40
W@56 0 0 56 0 56 56 56
T@50 0 0 0 50 50 50 50
44
Thursday Sales @ 90*2
 FOR FIFO Amt is 30 For LIFO Amt is 56 For WA Amt is 42

Sales on Thursday 90 Sales 90 Sales 90

Profit 30 Profit 44 Profit 48

Closing stock 40+56 Closing Stock 40+30 Closing Stock 42+42

96 70 84

FOR FIFO Amt is 30 & 40 For LIFO Amt is 56 & 50 For WA Amt is 44 & 44

Sales on Thursday 180 Sales 180 Sales 180

Profit 110 Profit 74 Profit 112

Closing stock 50+56 Closing Stock 40+30 Closing Stock 44+44

106 70 88
Avg