Assignment - 02

Business Finance (BM70005)

Name: SUBHRADEEP MAITRA

Roll No: 21BM91R07
PhD, Autumn Semester

Declaration: I have not copied the answer to this question from anywhere else

Journal Entries of "Breathscreen Inc"

Date Particular L/F Debit ($)

Jan-02 Cash A/c 34000000

Share Capital A/c
(17000000 shares issued)
Jan-02 Trade Mark A/c 6000000
Share Capital A/c
(Share issued for trademark)
Jan-05 Prepaid Fees A/c 3000000
Cash A/c
(License for one year)
Jan-10 Machinery A/c 15000000
Cash A/c
(Machinery purchased)
Feb-23 Inventory A/c 6000000
Cash A/c
(Material purchased)
Feb-28 R&D expenses A/c 2000000
Cash A/c
(Paid R&D expenses)
Jun-30 Salaries A/c 400000
Cash A/c
(Salaries paid)
Jul-01 Cash A/c 6000000
Bank Loan
(Borrowed bank loan)
Jul-01 Inventory A/c 3000000
Bills payable
(Purchase Inventory on credit)
Dec-13No journal entry as only contract took place
Dec-31 General Fire expenses 2000000
Cash A/c
(paid insurance)
 Dec-31 Salaries A/c 3300000
Cash A/c
(Paid salary)
Dec-31 Advertisement expenses 2000000
Cash A/c
(paid advertisement expenses)
Dec-31 Cash A/c 13400000
Trade receivable A/c 9600000
Sales
(sales made)
Dec-31 Interest paid
on bank loan 300000
Cash A/c
(paid interest on bank loan)
Dec-31 Cash A/c 200000
Interest received
(received interest)
Licensing fees expenses A/c 2750
Prepaid fees A/c
Self
Depreciation A/c 3000000
triggered
entries as Accumulated deposit A/c
on Inventory Expenses 8100000
31st
December To inventory
2013 Capital A/c 650000
Net loss
(transferred to liabilities)
117952750
here else

Credit ($)

34000000

6000000

3000000

15000000

6000000

2000000

400000

6000000

3000000

2000000
3300000

2000000

23000000

300000

200000

2750

3000000

8100000

650000

117952750
 Ledger Balance
Cash A/C
Date Particular J.F. Amount Date
Jan-02 To share capital A/c 34000000 Jan-05
Jul-01 To bank loan A/C 6000000 Jan-10
Dec-31 To Sales 13400000 Feb-23
Dec-31 To Interest 200000 Jun-30
Feb-28
Dec-31
Dec-31
Dec-31
Dec-31

53600000

Share Capital A/C

Date Particular J.F. Amount Date
To balance C/D 40000000

40000000

Machinary A/C
Date Particular J.F. Amount Date
To Cash 15000000

15000000

Inventory A/C
Date Particular J.F. Amount Date
To Cash 6000000
To Bill Payable 3000000

9000000

R&D expenses A/C

Date Particular J.F. Amount Date
To Cash 2000000

2000000

Salary A/c
Date Particular J.F. Amount Date
To Cash 3300000
To Cash 400000
 3700000

General Fire Expense A/C

Date Particular J.F. Amount Date
To Cash 2000000

2000000

Advertisment A/C
Date Particular J.F. Amount Date
To Cash 2000000

2000000

Trade Recivable A/C

Date Particular J.F. Amount Date
To Sales 9600000

9600000

Interest on Loan A/C

Date Particular J.F. Amount Date
To balance C/D 300000

300000

Interest Recived A/C

Date Particular J.F. Amount Date
To Cash 200000

200000

Licensing Fees A/C

Date Particular J.F. Amount Date
To prepaid Licensing Fee 2750000

2750000

Prepaid Licensing Fees A/C

Date Particular J.F. Amount Date
To balance C/D 2750000

2750000
 Depriciation A/C
Date Particular J.F. Amount Date
To Accoumulated Depreciation 3600000

3600000

Depriciation A/C
Date Particular J.F. Amount Date
To balance C/D 3600000

3600000

Inventory Expense A/C

Date Particular J.F. Amount Date
To Inventoy 8100000

8100000
nce

Particular J.F. Amount

By Prepaid Fees 3000000
By Machinary 15000000
By Inventory 6000000
By salaries 400000
By Prepaid R&D Expense 2000000
By General Fire expense 2000000
By salaies 3300000
By Advertisment 2000000
By Interest 300000
By Bal C/d 19600000

53600000

/C
Particular J.F. Amount
By Cash 34000000
By Trade mark 6000000
40000000

C
Particular J.F. Amount
By Bal C/d 15000000

15000000

C
Particular J.F. Amount
By Inventory expense 8100000
By Bal C/d 900000

9000000

A/C
Particular J.F. Amount
By P/L 2000000

2000000

Particular J.F. Amount

By Bal C/d 3700000
 3700000

se A/C
Particular J.F. Amount
By Bal C/d 2000000

2000000

A/C
Particular J.F. Amount
By Bal C/d 2000000

2000000

A/C
Particular J.F. Amount
By Bal C/d 9600000

9600000

A/C
Particular J.F. Amount
By Cash 300000

300000

A/C
Particular J.F. Amount
By Bal C/d 200000

200000

A/C
Particular J.F. Amount
By Bal C/d 2750000

2750000

ees A/C
Particular J.F. Amount
By Licensing Fees 2750000

2750000
/C
Particular J.F. Amount
By Bal C/d 3600000

3600000

/C
Particular J.F. Amount
By Depreciation 3600000

3600000

e A/C
Particular J.F. Amount
By Bal C/d 8100000

8100000
 Income Statement of "Breathscreen Inc." for the year ended on 31st Dec 2013
Particulars Details($)
Revenue fron Operation
less Cost of Goods sold
Gross Profit
Less Operating expenses
Salary epenses 3,700,000
R&D expenses 2,000,000
Fire Insurance expenses 2,000,000
Advertisement Expenses 2,000,000
Licensing expenses 2,750,000
Depreciation expenses 3,000,000
Total opearting profit (Loss)
Add Non operating income Interest income
less Non operating expenses Interest expenses
Net profit (Loss)

Balancesheet as on 31st Dec 2013

Particulars Amount ($)
Non-current Assets
Machinery 12,000,000
TradeMark 6,000,000
Current Assets
Inventory 900,000
Trade recevables 9,600,000
Prepaid Expenses 250,000
Cash 19,600,000
Total Assets 48,350,000
Non-Current Liabilities
Share capital 40,000,000
Reserve & Surplus -650,000
bank Loan 6,000,000
Current Liabilities
Accounts payable 3,000,000
Total Liabilities 48,350,000
r ended on 31st Dec 2013
Amount($)
23,000,000
8,100,000
14,900,000

15,450,000
-550,000
200,000
300,000
-650,000

13 Cashflow Statement

Net loss -650000

Add Non operating expenses
Depreciation 3000000
Interest expense 300000
Less Non operating income
Interest received -200000
Net operating profit operating activities

Increase in trade receivable -9600000

Increase in prepaid fee -250000
Increase in inventory -900000
Increase in trade payable 3000000

Cash flow from investing activities

Machinery purchase -15000000
Interest received 200000

Cashflow from financing activities

Share capital 34000000
Bank loan received 6000000
Paid Interest -300000

Net Cash flow from financing activities

Cashflow from beginning of the year
Net Increase
Cash at the end of year
2450000

-7750000

-14800000

39700000

39700000
0
19600000
19600000