FINANCIAL ACCOUNTING MANAGEMENT CIA-1

on
FINANCIAL TRANSACTION ANALYSIS

A Report submitted in partial fulfilment of the requirements for the degree of

Master of Business Administration
Under the Guidance of
Prof. Bhavna Ranjan Ahuja

MBA PROGRAMME
SCHOOL OF BUSINESS AND MANAGEMENT
CHRIST (DEEMED TO BE UNIVERSITY), BANGALORE
AUGUST 2021

By
GROUP 13
2127513 J ROHIN BRIGHT
2127526 RAHUL VERMA
2127535 ANCHAL DUGAR
2127539 ARSHA NARAYAN
2127552 RAKSHANTHA A
 PANDA SPACE FUNITURES PRIVATE LIMITED

Mr. Robert Downey Jr., Ms. Vinod Dallya , Mrs. Scarlett Johansson, Ms. Elizabeth Olsen and
Ms. Gu Gu came together to start this company from 1st January,2021 in Bangalore. They
planned on venturing into the business of furniture manufacturing and hence Panda Space
was established.
Mr. Vinod Dallya, who belong to state of Tripura and had been witnessing the bamboo stems
being powdered and fused into a board which was then exported for various purposes. Ms.
Elizabeth Olsen was particular about the company being environment friendly and
sustainable. Hence, they came up with a business idea with a business model which belonged
to the sweet spot of both the ideas coming together.
The idea was, manufacturing outdoor ergonomic furniture which involved sourcing of raw
materials from Bamboo and Recycled products. They realised that a part of advertising and
marketing could be done by partnering with an online retailer like Pepper Fry. Apart from
that, they also gave their customers an option to customise their furniture through their own
website. Since, renting out furniture was also in trend, they believed that giving an option to
rent their furniture would also facilitate their customers and in turn increase their revenue.
Here is the summary of all the transactions that happened in one year of his company.
1. They started with an investment of Rs. 50 lakhs.
2. For the commencement of operations, they incurred certain expenses towards
registering their business (Registrar of Companies), acquiring necessary documents
and obtaining a Trade License which costed them Rs. 30,000.
3. Apart from the investment, they also took a loan of Rs. 20 lakhs from HDFC Bank
Ltd at the rate of 10% p.a. in the beginning of the year.
4. They started their operations by renting a warehouse, factory and office at the rate of
Rs.40,000/month for which they paid a security deposit of Rs. 6 lakhs to the owner.
5. They purchased the following machineries for the business:

Machinery Purpose Amount

Wood Zillion Wood CNC for Cabinet Carving and
Making and Panel Furniture Making Furniture 5,00,000.00
Wood Cutting Machine Cutting Wood 2,00,000.00
Skipper V31 wood drilling machine   50,000.00
Cushion & Upholster Making Machine   1,50,000.00
10,00,000.0
Total 0
6. The following gadgets were purchased for the business:
Gadgets Amount
Laptop (3) 1,05,000.00
Printer 15,000.00
Telephone 1,000.00
Mobile (2) 29,000.00
Total 1,50,000.00

7. In the entire year they purchased the materials and processed them into furniture
costing Rs. 60 lakhs and for the current year they sold Rs. 40 lakhs worth of
Inventory. They paid Rs. 35 lakhs to the creditors in cash, and the rest remains as a
liability.

Inventory Purchased COGS

Outdoor 3-Seater Furniture 25,00,000.00 17,50,000.00

Outdoor 2-Seater Furniture 17,00,000.00 11,00,000.00

Outdoor 5-Seater Furniture 5,00,000.00 3,00,000.00

Outdoor Coffee Tables 5,00,000.00 3,00,000.00

Outdoor Throw Pillows 1,00,000.00 50,000.00

Outdoor Chairs 6,00,000.00 4,20,000.00

Outdoor Rugs 1,00,000.00 80,000.00

Total 60,00,000.00 40,00,000.00

8. They purchased a Fire Insurance and general liability insurance for his business to
insure safety against bodily injuries that their business could cost to the third party
and safety against inventory damages. They purchased the insurance on 1 st July,2021
for 40,000.
9. They spent Rs.50,000 for getting a website developed, hiring a photographer and
managing the website.
10. They found it to be a good idea to partner with a well-established online store like
Pepper Fry to publicize their products to the target audience. They partnered with
Pepper Fry for Rs. 2.5 lakhs to present the products on their website and showrooms
for one year.
11. In the entire year, the business sold furniture worth Rs. 1 crore (Rs. 75 lakhs from
Pepper Fry and rest through their website) of which only Rs. 80 lakhs had been
received from our debtors and the rest remains receivable. Along with that, they had
given their furniture on rent through which they earned Rs. 3 lakhs.
12. They have incurred rent expense of Rs. 4.8 lakhs, out of which they have paid only
Rs. 4 lakhs and the rest are yet to be paid.
13. They have hired 4 managers, 10 labourers and 3 technicians having the following
salary:
Employees No. of People Salary/month Total Salary
Management 4 1,60,000.00 19,20,000.00
Labourers 10 2,50,000.00 30,00,000.00
Technicians 3 90,000.00 10,80,000.00
Total   5,00,000.00 60,00,000.00

14. They spent Rs. 1.5 lakhs towards marketing and advertising.
15. They incurred Rs. 2 Lakh towards packaging of the products and Rs. 75,000 in
transporting the products to their customers.
16. Due to partnering with Pepper Fry, they were charged a seller’s commission of 20%
on sales from Pepper Fry which turned out to be Rs. 75 lakhs. Hence, we paid a total
Sellers’ Commission of Rs. 15 Lakhs.
17. The company wanted to lay more of its focus on its customised ergonomic furniture,
hence it had spent around Rs. 70,000 to research on the customer centric market.
18. There were some repairs done to the machines that we had purchased for the
company, which totalled at around Rs. 30,000
19. The customers had paid us in total of Rs. 1 lakh towards installation of furniture in
their home.
20. In the entire year, the company spent Rs. 2.5 lakhs towards electricity and fuel.
21. They spent Rs. 10,000 towards telephone and internet charges.
22. They paid Rs. 2 lakhs as interest towards the loan they took from HDFC bank.
Rate as per Companies
 Asset  Amount Act Depreciation
Machinery 10,00,000.00 18.10% 1,81,000.00
 Electronics 1,50,000.00 63.16% 94,740.00
 Total     2,75,740.00
23. Depreciation was recorded as following for the assets bought:

24. They had donated our inventory costing Rs. 30,000 to an Old Age Home so they can
sit outdoors.
25. The shareholders of the company had taken out Rs. 50,000 as dividend from the
company.