Creating Financial Statement – Caselet 1

Q1) Zen, Zedu and Zankhli- three sisters started a business of selling chocolate and strawberry ice creams from O
Veera Desai Road, Andheri (west). Each of them contributed Rs. 5, 00,000 as capital. Zen suggested that they n
“3Z ice cream parlor Pvt. limited” and others agreed. From 1st October, 2020, they took a place on rent from “
the rate of Rs. 30,000 p.m. Zankhli took charge of the import aspects. Accordingly, they imported an ice-cream m
$ 1,000 and incurred Rs. 2000 as import duty. Additionally, they had to pay cash, Rs. 10,000 as installation charge
also, imported some unique ice cream churning Equipment from ‘IKEA showroom’ from UK worth £ 200 on which
custom duty. They hired two assistants Changu and Mangu from ‘Mumbai Staff providers.’ They were paid a mo
5,000 per month per person. The Salary was paid on the month end itself.

Being a very popular locale, their Ice-creams had a huge demand. They had over fifty flavors for the customers to
demand had led to significant Sales. Their total purchases for all the three months ended on 31.12.2020 totaled
Their total sales for the quarter were Rs. 10,00,000. Twenty per cent of purchases were on 4 months credit. Sa
basis.

During the quarter October to December, they incurred the following expenses: Printing and stationary –Rs. 1
Advertisement Rs. 5000 per quarter.
Other expenses for the quarter: Travelling expenses – Rs. 5000 Electricity expenses – Rs. 12000.

On 31st of December, quarter end, they took a Loan of Rs. 20,000 from Dhakka bank & purchased a computer for
same date. Depreciation was to be charged @ 10% per annum using Straight Line Method on all assets. Exchang
$1 = INR 60 and 1£ = INR 85. Assist the sisters with their financial results of the quarter Oct- Dec, 20. Prepare gen
and Loss Account and Balance sheet and Cash/Bank Account for the quarter ending 31 st December, 2020. Interes
of each quarter @ 12% per annum. Ignore tax

For the next two quarters the following changes are anticipated:

Sales to grow by 40% based on the immediate preceding quarter. The proportion of costs to sales remains the same
but the ratio will increase by 10% in the next to next quarter. The rent to increase by 20% in each quarter based on
precious quarter. Salary to staff to increase by Rs 2000 per person in each quarter. Advertisement expenses to go do
quarter based on the immediate preceding quarter. Other expenses anticipated increase is 5% in each quarter. The
further equity by increasing promoter’s quota by 20% in the next quarter (q2). The exchange rates remain same.
 sales 1000000

Purchase 475000 0.8 380000

Year SLM @10% WDV(Written Down Value) @ 10%

1 Cost 100000 Cost 100000
end Depn 10000 Depn 10000
2 WDV 90000 WDV 90000
depn 10000 depn 9000
3 WDV 80000 Wdv 81000
10000 8100
4 WDV 70000 WDV 72900
 CASH BOOK Oct- Dec (A)
Particulars Q1

Opening Balance 0

Receipt
BS-OE Capital(Equity) 1500000
IS Sales 1000000
BS-L Loan from Dhaka Bank 20000

Total(A) 2520000

Payment
IS Rent 90000
BS-A Ice Cream Machine 72000
BS-A Churning Machine 17850
IS Salary for assistants 30000
IS Cash Purchase 380000
IS Printing &Stationery 4500
IS Advertising 5000
IS Traveling 5000
IS Electricity 12000
BS-A Computer 10000
Interest@12%
Payment to creditors 0
Total(B) 626350

BS- A Closing Balance 1893650

WN1 Purchases Q1
Total purchase 475000
80% Cash purchase 80% 380000
20% Credit Purchase 20% 95000
Jan- march € Apr- June € Income Statement
Q2 Q3 Revenue
Sales
1893650 2796975

300000 0 Total (a)

1400000 1960000
0 0 Cost & Expenses
47.5% Purchase
3593650 4756975 Rent
Salary
Printing n Stationery
108000 129600 Advt
0 0 Traveling
0 0 Electricty
34000 38000 Interest
532000 819280 Depreciation
4725 4961.25
4500 4050
5250 5512.5 Total(b)
12600 13230
0 0 Profit (a-b)
600 600
95000 133000
796675 1148233.75

2796975 3608741.25

Q2 Q3 WN2 Depreciation
665000 1024100 1 Ice Cream Machine
532000 819280 Cost/WDV
133000 204820 Depn @10% SLM
Closing WDV

2 Churning Machine
Cost/ WDV
Depn @10% pa on SLM
Closing WDV

3 Computers
Cost/ Wdv
Depn
Closing WDV
 Q1 Q2 Q3 Balance Sheet 31-Dec-20
Q1 Q2
1000000 1400000 1960000 Liabilities and Owners' Equity
Owners' Equity
Capital 1500000 1800000
Retained Earnings 376253.75 939082.5
1000000 1400000 1960000

Liabilities
475000 665000 1024100 52.25% Creditors for Purchases 95000 133000
90000 108000 129600 Loan from Dhaka 20000 20000
30000 34000 38000
4500 4725 4961.25
5000 4500 4050 Total 1991253.75 2892083
5000 5250 5512.5
12000 12600 13230
0 600 600 Assets
2246.25 2496.25 2496.25 Fixed Assets (closing WDV)
Ice cream Machine 70200 68400
Churning Machine 17403.75 16957.5
623746.25 837171.3 1222550 Computers 10000 9750

376253.75 562828.8 737450 Cash 1893650 2796975

Total 1991253.75 2892083

Check 0 0

Q1 Q2 Q3
72000 70200 68400
1800 1800 1800
70200 68400 66600

17850 17403.75 16957.5

446.25 446.25 446.25
17403.75 16957.5 16511.25

0 10000 9750
 0 250 250
10000 9750 9500
 Q3

1800000
1676533

204820
20000

3701353

66600
16511.25
9500

3608741

3701353