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    Bus 1

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    Anish Ramesh
    Mr. Shekhar started a computer business by contributing capital, obtaining a bank loan, and purchasing computers, furniture, and other assets. Throughout the year, the business generated revenue from computer classes, internet access, and hardware sales. Various expenses were incurred. At year-end, financial statements were prepared including a trial balance, income statement, and balance sheet. Ratios were then calculated to analyze the business's profitability and evaluate applying for an additional bank loan for expansion.

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    Bus 1

    Uploaded by

    Anish Ramesh
    19 views4 pages
    Mr. Shekhar started a computer business by contributing capital, obtaining a bank loan, and purchasing computers, furniture, and other assets. Throughout the year, the business generated revenue from computer classes, internet access, and hardware sales. Various expenses were incurred. At year-end, financial statements were prepared including a trial balance, income statement, and balance sheet. Ratios were then calculated to analyze the business's profitability and evaluate applying for an additional bank loan for expansion.

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    BUS 1

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    Mr. Shekhar started a computer business by contributing capital, obtaining a bank loan, and purchasing computers, furniture, and other assets. Throughout the year, the business generated revenue from computer classes, internet access, and hardware sales. Various expenses were incurred. At year-end, financial statements were prepared including a trial balance, income statement, and balance sheet. Ratios were then calculated to analyze the business's profitability and evaluate applying for an additional bank loan for expansion.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    19 views4 pages

    Bus 1

    Uploaded by

    Anish Ramesh
    Mr. Shekhar started a computer business by contributing capital, obtaining a bank loan, and purchasing computers, furniture, and other assets. Throughout the year, the business generated revenue from computer classes, internet access, and hardware sales. Various expenses were incurred. At year-end, financial statements were prepared including a trial balance, income statement, and balance sheet. Ratios were then calculated to analyze the business's profitability and evaluate applying for an additional bank loan for expansion.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    of 4

    CONTENTS

    1) Comprehensive Problems

    2) Journal Entries

    3) Ledger Posting

    4) Preparation of Trial Balance

    5) Preparation of Trading, Profit and Loss Account and Balance


    sheet

    6) Calculation of Profitability Ratio

    7) Conclusion
    Comprehensive Problem:

    Mr. Shekhar decided to commence a computer business in a building


    which was constructed at a cost of ₹2,00,000 and contributed a
    further sum of ₹5,00,000. He wanted to start with 10 computers. He
    started business on 1st April 2020. On the same date, he deposited
    ₹4,80,000 in the bank.
    He went on to PNB bank and put up his proposal and managed to get
    a loan to the extent of 75 percent of the cost of the computers
    ₹8,00,000 with printers. It was agreed that the loan will be repaid in
    three annual instalments as follows.
    ● At the end of first year - ₹2,00,000 + ₹60,000 (Interest)
    ● At the end of 2nd year - ₹2,00,000 + ₹40,000 (Interest)
    ● At the end of 3rd year - ₹2,00,000 + ₹20,000 (Interest)
    He gave ₹2,00,000 to the computer company as 25% of the value of
    the computer purchased and ₹6,00,000 out of bank loan availed. He
    deposited ₹2,000 for the electrical connection with the Electricity
    Board and deposited ₹2,00,000 TSNL for the telephonic connection.
    He got the furnished computer cafe by paying ₹50,000 and also spent
    ₹4,500 in getting pamphlets printed and distributed.
    All payments were to be made by cheque and all the receipts were in
    cash to be deposited in the bank on the same day. At the end of the
    year, their results showed following:
    ● Revenue from fees received from students of computer class
    ₹5,60,000
    ● Revenue from internet facility ₹2,40,000
    ● Revenue from sale of computer hardware ₹1,96,000 ● Purchases of
    computer hardware ₹1,10,000
    ● Telephone expenses ₹68,000 ● Petty expenses ₹24,000
    ● Entertainment expenses ₹20,000
    ● Miscellaneous expenses ₹20,000
    ● Wages paid ₹12,000
    He withdrew ₹12,000 by cheque each month for their personal
    expenses. He paid the bank loan regularly.
    Required:
    a)Journalise the above transaction

    b)Post them into ledger accounts

    c). Prepare the Trial Balance

    d)Prepare the Trading, Profit and Loss Account and Balance Sheet
    after taking into account that electricity charges of ₹2,48,000 is yet
    to be paid.

    e). Charge depreciation at the rate of 25% on computers, 10% on


    furniture and 5% on buildings.

    f)Calculate profitability ratio and comment on the efficiency of the


    business if the net profit ratio and gross profit ratio in similar types
    of business concerns are 20% and 50% respectively.

    g). Mr. Shekhar wants to expand his business. He approached the


    bank for a further loan. Compare the ratio that the banker will require
    before granting the loan. (Current ratio, quick ratio and debt equity
    ratio)

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