PROJECT 1

Rahul and Manoj are two brothers. Rahul was interested in computers and
often found time to work on computer. Due to his keen interest in computers and its
applications made him to take up computer software subject for his degree course.
On the other hand, Manoj's core interest was in sitting at his father's shop nearby at
market place selling electrical appliances after college hours.
Their father Mr. Sunil was happy that Manoj showed interest in his business,
but was so worried about the brothers drifting apart after college due to varied
interests. Mr. Sunil decided that this is the time for him to intervene and make
decisions for them. He felt that the interest of his two sons be put together and they
could start a flourishing business of their own – Sunil Computers
The boom in the Information Technology (IT) Industry made him find ways to
satisfy his sons' dreams.
Finally, he decided to start a computer business for both his sons. He asked
Manoj, a commerce graduate to draw up a proposal for the same.
Manoj came out with the following:
The area they lived in and run shop consisted of middle-income group families
and many of them did not possess computers at home.
Their shop could be used to provide the following services:
 Computer classes for various age groups.
 Computer using facilities on payment per hourly basis and printing of
documents from computers.
 Internet access facilities at the prevailing market rates by entering into
contract with the Videsh Sanchar Nigam Limited (VSNL).
 Computer game corner for children.
The shop they had in the market place was a single-story building. On 1st April,
2021, Rahul and Manoj borrowed ₹1,75,000/- each from their father and introduced
it as their capital in the firm. They brought in capital as follows : ₹10,000/- each in
cash ₹1,65,000/- each by cheque.
They constructed first floor of the building owned by their father spending ₹1,00,000.
They put up their proposal to the bank and managed to get the bank loan of
₹3,00,000.
The bank advanced the loan of ₹3,00,000 as per the favourable credit worthiness of
their father.
Repayment structure of the loan was as follows:
 End of the 1st year = ₹1,30,000 (₹1,00,000 + ₹30,000 interest)
 End of the 2nd year = ₹1,20,000 (`1,00,000 + ₹20,000 interest)
 End of the 3rd year = ₹1,10,000 (₹1,00,000 + ₹10,000 interest)
Total amount to be repaid including interest in three annual installments will be
₹3,60,000
They purchased 10 computers amounting to ₹4,00,000. The details of the
expenditures to start their business are as follows:
 For Electricity Connection—Security deposit of ₹1,000
 For Internet Connection—Security deposit of ₹1,00,000
 For printing and distribution of pamphlets in the surrounding colonies for
advertisement purpose amounting to ₹4,500
 Computer Café furnished amounting to ₹45,000.
The students on an average paid a monthly fee of ₹500 for three months computer
evening classes.
There were a number of internet subscribers and receipts on account of internet
facility was ₹10,000 a month in the first quarters on an average. They also decided
to buy and sell computer stationery like floppy disc, CDs, mouse, keyboard, etc.
At the end of the year, their results showed the following:
Total Revenue IN (₹)

---Fees from Computer Students 2,70,000

---Sale from Computer Stationery 3,10,000

--- Income from Internet Subscribers 3,50,000

Purchases of Computer Stationery 2,55,000

Internet Expenses 1,70,000

Electricity Expenses payable 1,24,000

Telephone Expenses 35,000

 General Expenses 12,000

Business Promotion Expenses 15,000

Repair & Maintenance Expenses

— Computers 14,000

— Building 8,000

There was a helper at their father's shop, who agreed to clean up the Computer Café
and fetch water to visitors. For this additional service, he was paid a salary of ₹500
per month. They both withdrew ₹5,000 each from bank every month for their
personal expenses. They paid the bank loan regularly. All the payments were made
by cheques.
Father was pleased for this sons’ efficiency and wanted to expand their business.
Closing stock at the end of the year was valued ₹20,000
Provide depreciation on Building at the rate of 5%, on Computers at the rate 25%
and on furniture at the rate 10%.
You are required to prepare the following:
i) Journalise the above transactions. Post them into ledger accounts and
prepare the trial balance.
ii) Prepare Trading and Profit & Loss account for the year ended 31st March,
2015 and Balance Sheet as at 31st March, 2022.
 PROJECT 2
Ram did his Economics (Hons.) from Delhi University and MBA from Indian
School of Business (Hyderabad). He got job with a good salary. After 5 years of work
experience, he started his business of assembling toy cars and named his business
'Favourite Toys'. On 1st April, 2021 he introduced a capital of ₹2 lakhs in cash and
₹33 lakhs by cheque. He also took a loan of ₹10 lakhs from the State Bank of India,
borrowed ₹5 lakhs from his friend, Amit by cheque.
He took premises on rent at ₹10,000/- per month in Okhla Industrial Area,
New Delhi for setting up of his new factory. On 1st April, 2021 he purchased
machinery of ₹10 lakhs and furniture for his office worth ₹1,00,000 through a
cheque. On the same date he withdrew ₹8,00,000 from bank account for meeting
day to day business expenses. He hired an executive to help him in setting up the
business at a salary of ₹10,000 per month. He also took an insurance cover at a
premium of ₹50,000 per annum on 1st April. Within one month, he was ready to
assemble toy cars. On 1st May, he made purchases for ₹70 lakhs out of which ₹60
lakhs were still payable and hired 5 workers on monthly wages of ₹8,000. On the
same date he purchased a telephone and installed it, which cost him ₹2,000. The
payment of the telephone was made through a cheque. He also paid ₹20,000 by
cheque to print catalogues for his products. Payment of all routine expenses was
made at the end of the year.
By the end of the year, all wages were paid every month in cash. Machinery and
Furniture were depreciated @ 10% per annum. Total sales amounted to ₹90 lakhs.
He paid annual electricity charges of ₹1,00,000 and telephone expenses ₹15,000 by
cash. He withdrew ₹1 lakhs from bank for personal use. On 31st March 2022 he
purchased investments worth ₹10 lakhs through bank. He repaid ₹5,00,000 with
₹25,000 as an interest to Amit on account of the loan taken earlier. There was a fire
in the factory that destroyed goods worth ₹2,00,000 out of which the insurance
company admitted a claim of ₹1,00,000. He paid ₹50,000 as carriage by cash.
Interest on bank loan was ₹50,000 due but not paid. At the end of year closing stock
was valued at ₹10 lakhs.
You are required to prepare the following:
(a) Journalize the above transactions, post them into ledger accounts and
prepare trial balance for the year ended 31st March, 2022.
 (b) Trading and Profit and Loss Account for the year ending 31st March, 2022
and Balance sheet as at 31st March, 2022.
If the business approaches a bank for a loan, will the bank oblige?
 PROJECT 3
After graduation, Mollie started a business of footwear named “Style Wear”. Her
Father gave ₹7,60,000 as capital in gift. She also took a loan of ₹4,00,000 on
1.04.21 from Axis Bank at an interest rate of 10% p.a. She purchased a shop for
₹3,30,000 in a Shopping Mall and started her business from 1 st April 2021. She
deposited ₹5,000 for electricity connection with TPDDL Ltd. and ₹10,000 as a
security for the shop in the mall. On the same date, she made some purchases as
follows:
i. Furniture ₹80,000 (by Cash)
ii. Goods (footwear) ₹1,20,000 (by Cash)
On 1st May, 2021, she transferred her Savings Account Balance of ₹1,20,000 into
Current Account in the name of “Style Wear” and treated this amount as an
additional capital. On the same date, she also appointed Raju and Rahim as
salesmen at a salary of ₹8,000 p.m. each. She paid ₹22,000 on 1st May to Mahima
Interiors for furnishing her showroom. All the payments were made by cheque,
except wages, freight and cartage. All the receipts were in cash and were deposited
in the bank on the same day.
The summary of transactions which took place during the year are as under:
Information In (`)
Cash Sales 15,70,000
Credit Sales 3,30,000
Cash Purchases 7,10,000
Credit Purchases 60,000
Wages Paid 15,000
Electricity Expenses Paid 70,000
Telephone Expenses 55,000
Freight and Cartage 22,000
Advertisement Expenses 30,000
Miscellaneous Expenses 11 ,000
Telephone Expenses Outstanding 1,000
Electricity Expenses due but not Paid 13,000
She withdrew ₹5,000 p.m. by cheque for her personal expenses. Depreciation was
charged @ 5% p.a. on shop and @ 10% p.a. on furniture. Closing stock was valued
at ₹1,75,000.
You are required to:
i Journalise the above transactions. Post them into Ledger and prepare a Trial
Balance as at 31st March, 2022.
ii Prepare Trading and Profit and Loss Account for the year ended 31 st March,
2022 and a Balance Sheet as at 31st March, 2022.

PROJECT 4

Vinod Kumar a highly motivated commerce student from Delhi, very much interested
in the field of commerce. At school level he had decided to become an entrepreneur
as he was very much interested in Business Studies, Accountancy and
Entrepreneurship subjects. He pursued B. Com for under graduation and did his
Masters (MBA) in Business Administration from Delhi University. After completing his
masters, he decided to start his own business (Sole Proprietorship). For this
purpose, he carried out a market survey, the results of which convinced him to target
the young generation. After doing a lot of market research and survey, he decided to
manufacture the following products:
(1) Smartphones (Product Line)
(2) Digital Cameras (Product Line)
(3) Tablets (Product Line)
(4) Home Theater System (Product Line)
He has also decided to open a school to provide free education to the children
belonging to remote areas and economically backward section of the society. For
this purpose, he has decided to spend some amount of profit every year.
He told his parents about his business ideas (He had decided to start), parents were
very supportive and gave him Rs.30,00,000 as an addition to his own savings of
Rs.5,00,000.
(1) He started business with Rs.35,00,000.
(2) He opened a Bank Account with ICICI bank in the name of business and
deposited Rs.50,000.
(3) He found that his investment amount (Capital) is not enough to run the
business. So he decided to obtain a loan from IDBI (Bank) of Rs.15,00,000 @
10% p.a.
He purchased the following assets for business: Land and Building Rs.12,00,000;
Plant and Machinery Rs.7,00,000; Office Furniture Rs.60,000; Office Equipments
Rs.40,000; Stock Rs.4,00,000.
Payment for the assets is made through cash Rs.15,00,000 and Balance through
cheque.
Goods purchased for cash Rs.5,00,000. Goods purchased on credit Rs.7,00,000. He
also purchased a laptop for office use for Rs.40,000 and four computers for staff for
Rs.60,000. Goods sold (Cash) Rs.11,00,000. Goods sold (Credit) Rs.9,00,000.
Purchase return during the year Rs.50,000. Sales return during the year Rs.30,000.
Cash received from debtors Rs.5,00,000. Cash paid to creditors Rs.6,00,000.
Bills Receivable Rs.60,000; Bills Payable Rs.40,000; Goods taken for personal use
Rs.10,000; Goods given as charity Rs.15,000; Goods distributed as free samples
Rs.20,000; Rent paid for Office Building Rs.5,000; Stationery purchased for office
Rs.8,000; Withdrawn from bank for office use Rs.1,50,000; Paid electricity bill
Rs.4,000; Office expenses paid through cheque Rs.12,000; Salaries paid to staff
Rs.1,00,000; Typewriter purchased for office use Rs.9,000; Paid Rs.3,000 for repair
of machinery; Paid fire insurance premium for office building by cheque Rs.6,000.
Paid for advertisement (TV and 'The Hindustan Times') Rs.60,000; Printing and
stationery expenses Rs.4,000; Additional capital introduced by Mr. Vinod Kumar as
per the requirement of Business Rs.2,00,000. A fire occurred in the godown and
stock of the value of Rs.6,000 was destroyed. Nothing was received from insurance
company because these goods were not insured. Postage and telephone expenses
Rs.2,000; Carriage inward Rs.6,000; Carriage outward Rs.5,000; A new printer
purchased for office Rs.7,000; Bank charges Rs.1,000; General expenses Rs.1,500;
License and registration fee Rs.800; Transportation Expenses Rs.1,200; Audit fees
paid Rs.4,000. Interest paid on bank loan (IDBI) by the bank (ICICI) as per the
standing advice Rs.1,20,000.
As an accountant you are required to Journalise these transactions and post them
into ledger accounts and prepare a Trial Balance.
(1) Prepare Trading and Profit and Loss Account for the year ending 31st March
2016 and balance sheet on the same date after considering the following
adjustments:
(a) Plant & machinery are to be depreciated @ 6% p.a.
(b) Depreciation on office furniture and office equipments is to be charged @8%
p.a.
(c) Closing Stock at the end Rs.1,00,000.
(d) Salaries outstanding Rs.40,000
(e) Interest on bank loan outstanding Rs.30,000
(f) Manager will get commission on net profit after charging such commission @
5% p.a. (only in the case of profit).
(2) Comment on the financial position and profitability of the business and give
valuable suggestion to the management when gross profit of the similar firm is
Rs.5,00,000 and net profit is Rs.40,000.

PROJECT 5
PROJECT STATEMENT: M/s Alpana Kids Garments
Mr. Kanha had 1,000 shares of ICICI Ltd. of Rs.100 each. In March, 2014, he sold
his shares @ Rs. 980 each.
With this amount, he decided to set up a business of Kid Garments on 1 April, 2014
under the name of M/S Alpana Kids Garments. He decided that all transactions
should be made through bank and deposited the whole money in Dena Bank. He
purchased a running factory of Kid Garments consisting of Factory Land and
Building Rs. 4,00,000, Plant and Machinery Rs.3,50,000, Furniture Rs. 50,000, Stock
Rs. 90,000 but agreed to pay Rs. 9,50,000 as purchase consideration. He later
approached his banker for a loan to meet the working capital requirement. Bank
advanced loan amounting to Rs.4,00,000 @ 10% p.a. He purchased a Laptop for
Rs.30,000.
His transactions for the year ending 31st March, 2015 were as follows:

You are required to :

1. Journalise these transactions and post them into ledger accounts and prepare
a Trial Balance.
2. Prepare Trading and Profit and Loss Account for the year ended 31st March,
2015 and Balance Sheet as at that date after considering the following
adjustments:
Adiustments:
(i) Closing Stock Rs.1,10,000
(ii) Depreciate Land and Building by 5%, Plant and Machinery and Furniture by
10% and Computer by 25%.
(iii) Salary Outstanding 3 8,000 and wages outstanding ‹ 15,000.
(iv) Insurance premium Prepaid Rs.1,200.
(v) Accrued Interest Rs. 25,000