Professional Documents
Culture Documents
Accountancy Project Work - XII
Accountancy Project Work - XII
Accountancy
Project
Project
Divas Fashions
Vandana & Rekha, decided to do business of fashion garments together under the
name of M/s Divas Fashions. They joined hands as Vandana was a good fashion
designer and Rekha was experienced in marketing such products. They purchased
a commercial space of 500 sq. feet for Rs.5,00,000. The space so purchased was
suitably decorated to make it fit for such trade. They further invested Rs.1,00,000
on decoration. They had invested the above Rs.6,00,000 by borrowing Rs.3,00,000
from State Bank of India and balance amount was brought equally by Vandana
and Rekha. Total amount of bank loan is to be paid in 20 quarterly investments
beginning 30th June, 2016. Annual rate of interest is 12%.
They started business on 1st April, 2016. Both the partners decide to deposit
Rs.1,00,000 each in Bank. They deposited Rs.5,000 for electricity connection with
BSES. They paid a deposit of Rs.2,000 to MTNL. They also purchased furniture for
Rs.10,000. All the payments were to be made by cheques. All receipts were
deposited into bank on same day.
At the end of the year, their results showed following:
They withdraw Rs.2,500 by cheque each month for personal expenses. They paid bank loan
regularly.
1. Journalize the above transactions. Post them into ledger and prepare the Trial
Balance.
2. Prepare Profit and Loss Account.
3. Prepare Balance Sheet
4. Calculate profitability Ratio.
5. They approached the bank for further loan. Compute the ratios that the banker
will required before granting loan.
6. Compute the ratio that you consider appropriate for analyzing the
performance.
7. Prepare Cash Flow Statement.
8. Industry standards are as follows:
2017
Mar 31 Bay Bank Loan A/c 15,000
By Bank Interest A/c 7,550
Mar 31
By Vandana’s Drawing A/c 30,000
Mar 31 By Rekha’s Drwaing A/c 30,000
Mar 31 By Purchase A/c 17,00,000
Mar 31 By Electricity Expenses A/c 40,000
By Telephone Charges A/c 50,000
Mar 31
By Cartage Outwards A/c 60,000
Mar 31 By Travelling Expenses A/c 45,000
Mar 31 By Entertainment Expenses 5,000
Mar 31 A/c
By Maintenance Expenses A/c 25,000
Mar 31
By Miscellaneous Expenses 15,000
A/c
Mar 31 By Balance c/d 89,700
28,00,000 28,00,000
To Balance B/d 89,700
2017
Apr 1
Vandana’s Capital Account
Dr. Cr.
L.F L.
Date Particulars .
Amount Date Particulars F.
Amount
2017 2016
Mar 31 To Drawings A/c 30,000 April 1 By Bank A/c 1,50,000
Mar31 To Balance c/d 2,20,000 April 1 By Bank A/c 1,00,000
2,50,000 2,50,000
2017
April 1 By Balance b/d 2,20,000
Sales Account
Dr. Cr.
L.F L.
Date Particulars .
Amount Date Particulars F.
Amount
2017 2017
Mar 31 To Trading A/c 20,00,000 Mar 31 By Bank A/c 20,00,000
20,00,000 April 1 20,00,000
Building Account
Dr. Cr.
L.F L.
Date Particulars .
Amount Date Particulars F.
Amount
2016 2017
April 1 To Bank A/c 5,00,000 Mar 31 By Depreciation A/c 30,000
April 1 To Bank A/c 1,00,000 Mar 31 By Balance c/d 5,70,000
6,00,000 6,00,000
2017
April 1 To Balance b/d 5,70,000
Security Deposit Account
Dr. Cr.
L.F L.
Date Particulars .
Amount Date Particulars F.
Amount
2016 2017
April 1 To Bank A/c 7,000 Mar 31 By Balance c/d 7,000
7,000 7,000
2017
April 1 To Balance b/d 7,000
Purchase Account
Dr. Cr.
L.F L.
Date Particulars .
Amount Date Particulars F.
Amount
2017 2017
Mar 31 To Bank A/c 17,00,000 Mar 31 By Trading A/c 17,00,000
17,00,000 17,00,000
Depreciation Account
Dr. Cr.
L. L.
Date Particulars F.
Amount Date Particulars F.
Amount
2017 2017
Mar 31 To Building A/c 30,000 Mar 31 By Profit & Loss A/c 31,000
Mar 31 To Furniture & Fixture A/c 1,000 . .
31,000 31,000
Trial Balance
L.F.
S. No. Name of Account Dr. (Rs.) Cr. (Rs.)
1. Bank A/c 89,700
2. Vandana’s Capital A/c 2,20,000
3. Rekha’s Capital A/c 2,20,000
4. Bank Loan A/c 2,40,000
5. Building A/c 5,70,000
6. Security Deposit A/c 7,000
7. Furniture & Fixture A/c 9,000
8. Sales A/c 20,00,000
9. Purchase A/c 17,00,000
10. Electricity Expenses A/c 60,000
11. Telephone Charges A/c 50,000
12. Travelling Expenses A/c 45,000
13. Entertainment Expenses A/c 5,000
14. Maintenance Expenses A/c 25,000
15. Miscellaneous Expenses A/c 15,000
16. Cartage Outwards A/c 60,000
17. Bank Interest A/c 33,300
18. Depreciation A/c 31,000
19. Electricity Expenses Payable A/c 20,000
27,00,000 27,00,000
Trading & Profit & Loss A/c
For the year ended on 31st March, 2017
Particulars Amount Particulars Amount
To Purchases 17,00,000 By Sales 20,00,000
To Gross Profit c/d 8,50,000 By Closing Stock 5,50,000
25,50,000 25,50,000
To Electricity Expenses A/c 60,000 By Gross Profit b/d 8,50,000
To Telephone Charges A/c 50,000
To Travelling Expenses A/c 45,000
To Entertainment Expenses A/c 5,000
To Maintenance Expenses A/c 25,000
To Miscellaneous Expenses A/c 15,000
To Cartage Outwards A/c 60,000
To Bank Interest A/c 33,300
To Depreciation A/c 31,000
To Net Profit Transferred to the
Capital A/c
Vandana 2,62,850
Rekha 2,62,850 5,25,700 . .
8,50,000 8,50,000
Balance Sheet
As on 31st March, 2017
Liabilities Amount (Rs.) Assets Amount (Rs.)
Capital A/c Building 6,00,000
Vandana 2,50,000 (-) Depreciation 30,000 5,70,000
(-) Drawing (30,000)
(+) Net Profit 2,62,850 4,82,850 Furniture 10,000
(-) Depreciation 1,000 9,000
Rekha 2,50,000 Security Deposit 7,000
(-) Drawing (30,000) Cash at Bank 89,700
(+) Net Profit 2,62,850 4,82,850 Closing Stock 5,50,000
Bank Loan 2,40,000
Electricity Expenses Payable 20,000 . .
12,25,700 12,25,700
Ratios
1. Stock Turnover Ratio
Stock Turnover = Cost of Goods Sold
Average Stock
= 11,50,000 = 2.09 times
5,50,000
2. Working Capital Turnover Ratio
Working Capital Turnover Ratio = Cost of Goods Sold
Working Capital
= 11,50,000 = 1.86 times
6,19,700
3. Gross Profit Ratio
Gross Profit Ratio = Gross Profit x 100
Net Sales
= 8,50,000 x 100 = 42.5%
20,00,000
4. Net Profit Ratio
Net Profit Ratio = Net Profit x 100
Net Sales
= 5,25,000 x 100 = 26.29%
20,00,000
5. Proprietary Ratio
Proprietary Ratio = Proprietary Fund
Total Assets
= 9,67,500 = 0.79
12,25,700
Cash Flow Statement
Particulars Amount( Rs.)
Project - 1
Segment-wise Result Analysis
Inorganic chemicals
Fertilisers
Other agri inputs
Others
Segment-wise Result
100
80
60
Percentage
40
20
0
Inorganic chemicals Fertilisers Other agri inputs Others
-20
Segment-wise Capital Employed
60
50
40
Percentage
30
20
10
0
Inorganic chemicals Fertilisers Other agri inputs Others
Segment wise Revenue, Result & Capital Employed
Analysis
100
80
60
Revenue
Result
40
Capital Employed
20
0
Inorganic Fertilisers Other agri inputs Others
chemicals
-20
Specific
Project -2
Accounting Ratios
Current Ratio
Ratio 31st March 2016 31st March 2017
Current Ratio
= Current Assets = 23233.92 = 24537.39
Current Liabilities 6354.27 6830.07
= 3.65: 1 = 3.59 : 1
Solvency Ratios
Proprietary Ratio of the company is also low, is 0.83: 1 to 0.83:1
from 31st March 16 to 31st March 17 . This ratio indicates that
the firm is depending more on shareholder’s funds than external
equities. It indicates the lower or inadequate safety to creditors.
Profitability Ratios