Business Decisions and Financial St

ancial Statements

Transact

Started business with Share

Raised money by issuing 9% Bonds on 1

Purchased cotton T Shirts for cash
Purchased laptops on credit from X
Sold 60% of T shirts for cash
Purchased shares of Z ltd
Salary paid
Rent Paid
Commission: 5% on sales

Interest also paid

Purchase stock and issued shares

http://youtu.be/6uym1spVjKw

Du
Started business with

Raised money by issu

Purchased cotton T Shir
Purchased laptops on
Sold 60% of T shirts f
Purchased shares of Z lt
Interest also paid
Purchase stock and issu
Sold shares of Z ltd

http://youtu.be/4fapPJG

Du

Raised money by issuin

Purchased cotton T S
Purchased laptops on
Purchased shares of Z lt
Salary paid

Paid off 60% Loan

Interest also paid
Distributed Dividend

300,000
200,000
240,000
90,000
300,000
100,000
30,000
50,000
15,000

18,000
50,000

300,000

200,000
240,000
90,000
300,000
100,000
18,000
50,000
100,000

200,000
240,000
90,000
100,000
30,000

120,000
18,000

BS as on 31/3/2014

Sources
Capital
9% Bonds
X (LTOP)
R Profit
Assets
Stock TS
Laptop
Z Shares

CIH

Assets
Liabilities
Equity
No of shares
Equity per share

Resulting in increase

Resulting in increase

Resulting Income

Resulting in reductio

Resulting in acquisito

Resulting in Expense

Resulting in Reductio

Resulting in Reductio

2014

350,000
200,000
90,000
43,000
683,000
146,000
90,000
100,000

347,000

683,000
683,000
290,000
393,000
35,000
11.23

Financial St

ease in capital

ease in Liabilities

uction in assets

uisiton of asset

ense

uction in liabilities

uction in Equity

IS for 2013-14

Incomes
Sales
Expenses
COGS
Salary
Rent
Commission
interest

Profit

Financial Statements

pital

abilities

ssets

asset

iabilities

Equity

013-14

300,000

144,000
30,000
50,000
15,000
18,000
257,000

43,000

atements

CFS for 2013-14

Receipts
Capital
9% Bonds
Sales
Payments
Stock TS
Z Shares
Salary
Rent

Commission
interest
CIH

2013-14

300,000
200,000
300,000
800,000
240,000
100,000
30,000
50,000

15,000
18,000
453,000
347,000

Decisions
Started business with capital
Took 10% loan (on 1st April)
Purchased stock for cash
purchased stock on credit
sold 60% stock on credit
Plant purchased for cash (1st April)
Life of the plant ( years)
Salary for the period fully paid
Rent per month
Rent paid
Interest due but not paid

Acc
Sources =
500,000
300,000
240,000
300,000
750,000
100,000
5
30,000
3,000
72,000

Accounting Equation
Sources =

ation
Assets

Balance Sheet

Income Statement

Sources

Incomes
Expenses

0
Assets

Cash Flow Statement

Receipts

Payments

Decisions
Started business with capital
Took 10% loan

300,000
150,000

Purchased stock for cash

purchased stock on credit
sold 60% stock on credit
Salary per month
Salary paid
Collection from Debtors
Purchased plant
Depreciation on plant

240,000
300,000
750,000
5,000
55,000
80%
100,000
20%

Balance Sheet

Sources

Income Statement

Incomes

Expenses
Assets

Cash Flow Statement

Receipts

Payments

Balance Sheet

Exercise 3
Started Business with
Availed 10% Loan
Purchased stock of goods for cash
Purchased stock on credit
Purchased plant on credit from X
sold entire stock for cash

20000
80000
50000
20000
60000
100000

Exercise 4
Started Business with
Availed 10% Loan
Purchased stock of goods for cash
Purchased plant on credit from X
sold 60% stock for cash
Sold entire stock for

150000
90000
120000
75000
75000
20000

Exercise 5
Started Business with
Availed 10% Loan
Purchased stock of goods on credit
Purchased shares of B ltd for cash
sold 30% stock for cash
Interest paid

180000
240000
120000
90000
150000

Exercise 6
Started Business with
Availed 10% Loan
Purchased stock of goods on credit
Purchased shares of B ltd for cash
sold entire stock for cash
Salary paid
Rent paid
Interest due but not paid

240000
300000
75000
90000
150000
45000
60000
0

Exercise 7
Started Business with
Availed 10% Loan
Purchased stock of goods on credit
Purchased shares of B ltd for cash
sold 30% stock for cash
Salary paid
Rent paid
sold shares

30000
300000
90000
45000
75000
22500
30000
30000

Exercise 8
Started Business with
Availed 10% Loan

60000
80000

Purchased stock of goods on credit

Purchased shares of B ltd for cash
sold 30% stock for cash
Salary paid
Dividend received
Interest paid
Exercise 9
Started Business with
Availed 10% Loan
Purchased stock of goods
Purchased stock on credit
Purchased plant on credit from X
sold entire stock for cash
interest paid
entire profit distributed as dividend
Exercise 10
Started Business with
Availed 10% Loan
Purchased stock of goods
Purchased stock on credit
Purchased plant on credit from X
sold entire stock for cash
interest paid
No profit distributed

40000
30000
50000
5000
5000

10000
40000
25000
10000
30000
50000

10000
40000
25000
10000
30000
50000

Income Statement

Cash Flow Statement

Decisions
Purchased stock for cash
Sold 40% of stock on credit
Salary per month
Salary paid
Rent per month
Rent Paid

125,000
300,000
6,000
60,000
3,000
72,000

1.5

Balance Sheet

Sources

opening

Capital

100000

Retained Profit

125000

9% Bonds

150000

Creditors

25000
400000

Assets
Cash
Debtors
Stock
Plant
Less A Depreciation

100000
161000
75000
80000
-16000
400000

Income Statement
Closing

Incomes

Expenses

Cash Flow Statement

opening

Receipts

Payments