Comprehensive Accountancy Project – 2019-2020

COMPREHENSIVE PROJECT

RAMA’S CYBER CAFÉ

Mr. Rama decided to commerce a computer business in a building which was constrained at a cost of Rs 1,00,000 and contributed a further sum of Rs 2,50,000. He wanted to start with 10 computers. He went on to HDFC bank and put up his proposal and managed to get a loan to the extent of 75 percent of the cost of the computer Rs 4,00,000 with pointers it was agreed that the loan was rapid in three annual installments as follows :

  • At the end of first year = Rs 1,00,000 + 30000 interest
  • At the end of 2nd year = Rs 1,00,000 + 20000 interest
  • At the end of the 3rd year = Rs 1,10,000 (Rs 1,00,000+10000 interest)

He started business on 1st Apr 2019 on the same date he deposited Rs 2,40,000 in the bank. He gave Rs 1,00,000 to the computer company as 25% of the values of computer purchase & Rs 3,00,000 out of bank loan availed. He deposited Rs 10000 0 with VENL for the telephone internet connection he got the computer code finished by paying Rs 25,000 and also spent Rs 4520 in getting pamphlets printed and distributed. All payments were to be made by cheques and all the receipts were in each to deposited in the bank on the same day. At the end of the year, their results showed the following.

╔═════════════════════════════════════════════════════════════╦══════════╗
║ Revenue from fees from students of computer class           ║ 2,80,000 ║
╠═════════════════════════════════════════════════════════════╬══════════╣
║ Revenue on account of internet facility                     ║ 1,20,000 ║
╠═════════════════════════════════════════════════════════════╬══════════╣
║ Revenue from the sale of computer stationary                ║ 98,000   ║
╠═════════════════════════════════════════════════════════════╬══════════╣
║ Purchase of computer stationary like floppy disk, CDs, etc. ║ 55,000   ║
╠═════════════════════════════════════════════════════════════╬══════════╣
║ Telephone chargers                                          ║ 34,000   ║
╠═════════════════════════════════════════════════════════════╬══════════╣
║ Petty expenses                                              ║ 12,000   ║
╠═════════════════════════════════════════════════════════════╬══════════╣
║ Entertainment expenses                                      ║ 10,000   ║
╠═════════════════════════════════════════════════════════════╬══════════╣
║ Miscellaneous expenses                                      ║ 10,000   ║
╠═════════════════════════════════════════════════════════════╬══════════╣
║ Wages paid to servant                                       ║ 6,000    ║
╚═════════════════════════════════════════════════════════════╩══════════╝

He withdraws 61,000 by cheque each month for their personal expenses. He paid the bank loan regularly.

Required :

  • journalise the above transactions. But then into the edge and prepare a trial balance
  • Prepare profit loss and balance sheet after taking into account that electricity charges of Rs 124,000 are yet to be paid.
  • Charge depreciation at the rate of 25% on computers 10% on furniture and 5% on building
  • Calculate profitability ratio and comment on the efficiency of the business if the net profit ratio and gross profit in a similar type of business concerns are 20% and 50% respectively.
  • Mr. Rama wants to expand his business. He approached that bank for a further loan. Compose the ratio that the banker will require before granting the loan. Current ratio. The quick ratio and debt-equity ratio.

JOURNAL ENTRY

 

             Date                  Particular     LF                 Dr (Rs)            Cr (Rs)
             2019
             April                    Cash Ac                2,50,000
                 Building Ac                1,00,000
                 To capital Ac           3,50,000
      (being capital invested in                   the business)
            April                   Bank Ac                2,40,000
                To cash Ac           2,40,000
        (being cash deposited in                         Bank)
           April                   Bank Ac               3,00,000
                To bank Ac           3,00,000
    (being loan taken HDFC bank)
          April                Computer Ac               4,00,000
               To bank Ac           4,00,000
     (being computer purchasing          paying Rs 4,00000)
        April         Electricity board Ac               1,000
              VSNL Ac               1,01,000           1,01,000
    (being security deposits with        electricity board and VSNL)
       April       Furniture and fixtures Ac               25,000
       To bank Ac           25,000
       (being café furniture)
       April         Advisement Ac               4,500
        To bank Ac           4,500
       (being cheque issued for              advisement)
      31Mar         Depreciation Ac             1,07,500
         To computer Ac         1,00,000
         To furniture Ac          2,500
         To building Ac          5,000
    (being depreciation charged)

LEDGER POSTING

Cash A/c

DATE PARTICULAR LF AMOUNT DATE PARTICULAR LF AMOUNT
2019
1 APRIL
To capital
Ac
2,50,000 2019
1Apr
By bank Ac
By balance
2,40,000
10,000
2,50,000 2,50,000

Building

DATE PARTICULAR LF AMOUNT DATE PARTICULAR LF AMOUNT
2019 To capital Ac 1,00,000 2020 By Dep Ac 5,000
1 April 31 Mar By B/c Cid 9,50,000
1,00,000 1,00,000

Capital A/c

DATE PARTICULAR LF AMOUNT DATE PARTICULAR LF AMOUNT
2020 To B/c c/d 3.50,000 2019 By buildings 1,00,000
31 Mar 1 Apr By cash Ac 2,50,000
1 April
3,50,000 3,50,000

Computer A/c

DATE PARTICULAR LF AMOUNT DATE PARTICULAR LF AMOUNT
2019 To bank Ac 4,00,000 2020 By Dep Ac 1,00,000
1 Apr 31 Mar By B/c c/d 3,00,000
4,00,000

Bank A/c

Date Particular LF Amount Date particular LF amount
2019 2019 By computer A/c 4,00,000
1 April To cash A/c 2,40,000 1 Apr
1 April To bank loan A/c 3,00,000 2020
2020 31 Mar By electricity-based 1000
31Mar To sales 4,98000 31 Mar By VSNL A/c 1,00,000
31 Mar By furniture 25,000
31 Mar By advertisement 4500
31 Mar By purchase A/c 55,000
31 Mar By telephone EP 341000
31 Mar By daily expenses 121000
31 Mar By entertainment 10,000
31 Mar By miscellaneous A/c 10,000
31 Mar By wages A/c 6000
31 Mar By bank wan 72,000
31 Mar By b/c c/d 1,30,000
2020 10,38,000 10,38,000
1 Apr To balance b/d 1,78,500

Bank Loan A/c

DATE PARTICULAR LF AMOUNT DATE PARTICULAR LF AMOUNT
2020

31 Mar

To bank Ac 1,30,000 2019

1 Apr

By bank Ac

 

3,00,000

 

31 Mar To b/c c/d 2,00,000 31 Mar By int on bank loan 30,000
3,30,000
3,30,000
2020

1 Apr

BY b/c b/d 2,50,000

Electricity Board A/c

DATE PARTICULAR LF AMOUNT DATE PARTICULAR LF AMOUNT
2019

1 Apr

To bank Ac 1000 2020

31 Mar

By B/c c/d 1000
2020

1 April

To b/c b/d 1000 1000
1000

Vsnl A/c

DATE PARTICULAR LF AMOUNT DATE PARTICULAR LF AMOUNT
2019

1 Apr

To bank Ac 1,00,000 2020

31 Mar

By b/c c/d 1,00,000

 

1,00,000 1,00,000
1,00,000

Sales A/c

DATE PARTICULAR LF AMOUNT DATE PARTICULAR LF AMOUNT
2020

31Mar

To trading Ac 4,80,000 2020

31 Mar

By bank Ac

 

4,38,000

 

Purchase A/c

DATE PARTICULAR LF AMOUNT DATE PARTICULAR LF AMOUNT
2020

31 Mar

To bank Ac 55,000 2020

31 Mar

By trading Ac

 

55,000

 

55,000

Furniture A/c

DATE PARTICULAR LF AMOUNT DATE PARTICULAR LF AMOUNT
2019 To bank Ac 25,000 2020 By Dep Ac 2500
1 Apr 31 Mar By B/c c/d 22,500
25,000

DATE PARTICULAR LF AMOUNT DATE PARTICULAR LF AMOUNT
2019

1 Apr

To bank Ac 4500 2020

31 Mar

By P&L AC 4500

Telephone Charges A/c

DATE PARTICULAR LF AMOUNT DATE PARTICULAR LF AMOUNT
2019

1 Apr

To bank Ac 34,000 2020

31 Mar

By P&L Ac

 

34,000

 

Interest Of Bank Loan A/c

DATE PARTICULAR LF AMOUNT DATE PARTICULAR LF AMOUNT
2020

31Mar

To bank loan Ac 30,000 2020

31 Mar

By P&L Ac

 

80,000

 

 

Entertainment Expenses A/c

DATE PARTICULAR LF AMOUNT DATE PARTICULAR LF AMOUNT
2020

31 Mar

To bank Ac 10,000 2020

31 Mar

By P&L Ac

 

10,000

 

Drawing A/c

DATE PARTICULAR LF AMOUNT DATE PARTICULAR LF AMOUNT
2020 To bank Ac 72,000 2020 By b/c c/d 72,000
31 Mar 31 Mar
72,000 72,000

 

Petty Expense

DATE PARTICULAR LF AMOUNT DATE PARTICULAR LF AMOUNT
2020

31 Mar

To bank Ac 12,000 2020

31 Mar

By P&L AC    12,000

 

 

Wages A/c

DATE PARTICULAR LF AMOUNT DATE PARTICULAR LF AMOUNT
2020

31 Mar

To bank Ac 6,000 2020

31 Mar

By trading Ac 6,000

 

 

Depreciation

DATE PARTICULAR LF AMOUNT DATE PARTICULAR LF AMOUNT
2020

31 Mar

To computer Ac 1,00,000 2020

31 Mar

By P&L Ac 1,07,500

 

31Mar To furniture Ac 2900
31Mar To building Ac 5000
1,07,500 1,07,500

 

Miscellaneous Expenses A/c

DATE PARTICULAR LF AMOUNT DATE PARTICULAR LF AMOUNT
2020

31 Mar

To bank Ac 10,000 2020

31 Mar

By P&L Ac 10,000

 

 

Electricity Charges A/c

DATE PARTICULAR LF AMOUNT DATE PARTICULAR LF AMOUNT
2020

31 Mar

Tools electricity 1,24,000 2020

31 Mar

By P&L Ac 1,24,000

 

 

Electricity Payable A/c

DATE PARTICULAR LF AMOUNT DATE PARTICULAR LF AMOUNT
2020 To B/c c/d 1,24,000 2020 By electricity 1,24,000
31 Mar 31 Mar charge
1,24,000 1,24,000

 

TRIAL BALANCE

TRIAL BALANCE AS OF SLOT MAR, 2020

PARTICULAR AMOUNT
Cash Ac 10,000
Building Ac 95,000
Bank Ac 1,79,500
Computer Ac 3,00,000
Electricity board Ac 1,000
VSNL Ac 1,00,000
Furniture Ac 22,500
Advertisement Ac 4,500
Purchase Ac 55,000
Telephone charge Ac 34,000
Petty expense Ac 12,000
Entertainment expense Ac 10,000
Miscellaneous expense Ac 10,000
Wages Ac 6,000
Drawing Ac 72,000
Int. on Bank loan Ac 30,000
Dep Ac 1,07,500
Electricity charges Ac 1,24,000
Capital Ac 3,50,000
Bank loan Ac 2,00,000
Electricity payable Ac 1,24,000
Revenue from fees & sales Ac 4,98,000
Total 11,72,000

 

TRADING AND PROFIT AND LOSS

TRADING AND PROFIT & LOSS ACCOUNT FOR THE YEAR ENDED 31 MAR 2020

PARTICULAR AMOUNT
To purchase Ac 55,000
To wages 6,000
To gross profit 4,37,000
4,98,000
To advertisement Ac 4,500
To electricity Ac 1,84,000
To telephone charge Ac 34,000
To petty expenses Ac 12,000
To entertainment expenses Ac 10,000
To Int. on bank loan Ac 10,000
To depreciation Ac
Computer 1,00,000
Building 5,000
Furniture 2,500
To set profit 1,05,000
By sales 4,98,000
By gross profit 4,37,000
4,37,000

 

BALANCE SHEET

BALANCE SHEET AS OF 31 MAR 2020

LIABILITIES AMOUNT ASSET Amount
Bank loan 2,00,000 Cash in hand 10,000
Electricity payable Ac 1,24,000 Bank 1,78,500
VSNL(security deposit) 1,00,000
Capital 3,50,000 Electricity based (S.D) 1,000
Less : drawing (72,000) Computer 3,00,000
2,78,000 Building 95,000
Add net profit 1,05,000 3,83,000 Furniture 22,500
7,07,000 7,07,000
  1. Calculation of profitability Ratio
  • gross profit Ratio : Gross profit x100 = 4,37,000 x 100 = 87.75%

Net sake                     4,98,000

  • Net profit Ratio : Net profit x 100 =  1,05,000 x 100 = 21.08%

Net sake                    4,98,000

Note:  efficiency of business is quite satisfactory because net profit ratio and gross profit ratio are higher than the normal rate for a similar type of business organization

  • Granting bank loan

Bank will see the following ratios before granting loan.

  1. Current Ratio: current Asset

Current liabilities

= cash + Bank _______________________________________

Electricity payable + bank loan to repaid next year

=           10,000+8,600        =    1,88,500  = 84%

1,00,000 + 1,24,000       2,24,000

2. Quick current ratio will be same on current ratio because there is neither closing stock nor prepaid expenses

3. Debt equity Ratio = Debt  =   1,00,000   = 0.26:1

Equity      3,83,000

The bank therefore should grant the loan as the ratio are favorable.

 

SPECIFIC PROJECT

BAJAJ AUTO LTD

Bajaj Auto is a global two-wheeler and three-wheeler Indian manufacturing company. It manufacturing and sells motorcycles, scooter, and auto-rickshaw Bajaj Auto is a part of Bajaj Group. It was founded by Jamnalal Bajaj in Rajasthan in the 1940s. it is based in Pune, Mumbai with plants in Chakan (Pune), Waliej (near Aurangabad ) and its partner is Uttaranchal. Bajaj Auto is the 6th largest manufacturer of motorcycles in the world and 2nd largest in India. It is the world’s largest three-wheeler is manufactured.

NET PROFIT RATIO

Net profit = profit  x 100

sales

Segment Profit Sales Ratio
Automotive 1616.29 7425.15 21.76%
Investment 362.79 363.46 99.91%
Total 1979.05 7788.61 121.57%

 

RETURN ON INVESTMENT

Return on Investment = profit   x 100

Capital employed

Segment Profit Capital employed ROI(%)
Automotive 1616.29 5032.46 32.11%
Investment 362.79 18346.47 1.97%
Total 1979.05 23378.93 34.08%

 

SEGMENT PROFIT

Percentage = segment profit x 100

Total profit

Degree = percentage x 36

100

Segment Profit Percentage of total degree
Automotive 16116.29 81.66% 294’
Investment 362.79 18.33% 66.99’
Total 1979.05 99.99% 359.99’

 

SEGMENT REVENUE

Percentage = segment profit x 100

Total profit

Degree= percentage x 360

100

Segment Revenue Percentage of total Degree
Automotive 7425.15 96.33% 343.2’
Investment 363.46 4.66% 16.79’
Total 7788.6 99.99% 359.99’

 

CAPITAL EMPLOYED

Percentage = segment profit  x 100

Total profit

Degree = percentage x 360

100

Segment Capital employed Percentage Degree
Automotive 5032.46 21.01% 75.65’
Investment 18346.47 76.61% 276.8’
Unallocated 568.47 2.37% 8.54’
Total 23947.4 99.99% 359.99’

COMBINED ANALYSIS

Segments Revenue Profit Capital employed Return on investment Net profit ratio
Automotive 7425.15 1616.25 5032.46 32.11% 21.31%
Investment 363.46 362.79 18346.47 1.97% 99.81%
Unallocated 568.47
total 7788.61 1979.05 23947.4 34.08 121.37%

 

OPERATING ACTIVITIES

Meaning: Operating activities are principal revenue-generating activities of an enterprise other than increasing financing activities. The amount of cash flow arising from operating is a key indicator of the eaten to which the operations of the enterprise have generated cash i.e. whether the cash. Generated is adequate to maintain operating activity of the enterprise pay dividend pay loan etc. Inflows: cash sales, cash received from debtors.

FINANCING ACTIVITIES

Financing activities are activities that result in a change in the size and composition of finance of the enterprise. The amount of cash flow arising from the financial activities to use and associating crime so future cash by procurement of funds to the enterprise.

Inflows: the issue of future, issue of share.

Comparative statement of operating activities for the year ended 31st march 2018-19

PARTICULAR 31 Mar 2019 31 Mar 2018 Absolute change % change
Cash inflow (outflow)  27,186.86 4327.84 1,840 42.59%

 

Comparative statement of financing activities for the year ended31 March 2018-19

PARTICULAR 31 Mar 2019 31 Mar 2018 Absolute change % change
Cash inflows (outflow) (2,073.06) (1885326)  188.78 10.01%

                     

                                                                                               Comparative statement of Investment activities for the year ended 2018-19

     Particular     31Mar 2019     31Mar 2018      Absolute              change     % Change
   Cash outflow       (338.44)      (2053.09)      (1714.65)          83.51%

ACKNOWLEDGEMENT

I would like to give my heartfelt thanks to Mr. Oevender Kumar Mourya, my accountancy teacher who always gave valuable suggestions and guidance for the completion of this project. He helps to understand and remember the important details of this project. My project has been succeeded only because of his guidance. I would like to thank Mr. (principal of our school) for his capital support in the project. And I would also like to thanks all those people who directly or indirectly support the completion of the project.

Date :

Place: Delhi

Name: Rakesh Rathore

Signature :

Roll number :

CERTIFICATE

This is herby to certify that, the original and genuine investigation work has been carried out to investigate the subject matter and the related data collection and investigation has been completed and solely sincerely and satisfactorily done by Rakesh Rathore a student of class 12 under the Roll No. for the academic session 2019-20 regarding the investigatory project entitled accountancy for the physics department under the direct supervision of the undersigned as per the requirement for the board examination.

Internal Examiner

Principle

External

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