WORLD.

COM ADVERTISING
INC.
Group 3:

Alia
Kalpesh
Niranjan
Ritika
Subhag
ABOUT
Lee Nicholas has been the principal stakeholder of
World.Com Advertising.

This company has been propering since the last 10

years.

However, Lee Nicholas had decided he now wants to

sell the business.
 World.com
World.comAdvertising
AdvertisingInc.
Inc.
Trial Balance
Trial Balance
As
AsOn
OnJanuary
January31,
31,2012
2012
Particulars
Particulars Debit
Debit Credit
Credit
Cash
Cash 9,700
9,700
A/R
A/R 14,100
14,100
Prepaid
PrepaidExpenses
Expenses 2,600
2,600
Building
Building 2,21,300
2,21,300
Accumulated
AccumulatedDepreciation
Depreciation 68,600
68,600
A/P
A/P 13,000
13,000
Salary
SalaryPayable
Payable
Unearned
UnearnedService
ServiceRevenue
Revenue 56,700
56,700
Common
CommonStockStock 50,000
50,000
Retained
RetainedEarnings
Earnings 60,400
60,400
Dividends
Dividends 9,000
9,000
Service
ServiceRevenue
Revenue 12,300
12,300
Rent Expense
Rent Expense
Salary
SalaryExpense
Expense 3,400
3,400
Utilities
UtilitiesExpense
Expense 900
900
Depreciation Expense
Depreciation Expense
Supplies
SuppliesExpense
Expense
2,61,000
2,61,000 2,61,000
2,61,000
 TRIAL BALANCE DID NOT INCLUDE

Monthly revenue of $3,800 :

Date Particulars Debit Credit

Cash 3,800
Revenue 3,800
Monthly expenses of $1,100

Date Particulars Debit Credit

Expenses 1,100
Cash 1,100
 LEDGERS
CASH A/C :
Date Particulars Amt(Debit) Date Particular Amt(Credit)

Opening balance 9,700 Expenses 1,100

Revenue 3,800
balance
12,400

Total 13,500
Total 13,500
 EXPENSE A/C:
Date Particulars Amt(Debit) Date Particular Amt(Credit)

Opening balance 0

Expense 1,100
balance 1,100

Total 1,100 total 1,100

 REVENUE A/C:
Date Particulars Amt(Debit) Date Particular Amt(Credit)

Opening balance 12,300

revenue 3,800
balance 16,100

Total 16,100 total 16,100

 World.com Advertising Inc.
Trial Balance
As On January 31, 2012
Particulars Debit Credit
Cash 12,400
A/R 14,100
Prepaid Expenses 2,600
Building 2,21,300
Accumulated Depreciation 68,600
A/P 13,000
Salary Payable
Unearned Service Revenue 56,700
Common Stock 50,000
Retained Earnings 60,400
Dividends 9,000
Service Revenue 16,100
Rent Expense
Salary Expense 3,400
Utilities Expense 900
Depreciation Expense 1,100
Expense
2,64,800 2,64,800
 World.com Advertising Inc.
Income Statement
Month Ended January 31, 2012
Revenues
Service 16,100
Total Revenues 16,100

Expenses
Salary Expense 3,400
Utilities 900
Supplies 1,100
Total Expenses 5,400

Net Income/Loss 10,700

 World.com Advertising Inc.
Statement of Retained Earnings
Month Ended January 31, 2012
Beginning Balance 60,400
Add Net Income 10,700
71,100
Less Dividends -9,000
Ending Retained Earnings 62,100
Expectation of Nicholas:
Nicholas expects at least the amount of capital invested by
him which equals the total amount of owners equity.
This amounts to 1,12,100

Our Willingness:
The most we think World.com Advertising Inc. shall go
for is 20 times the monthly net income.
This amounts to 2,14,000

However, Our stand in negotiating would be for the

amount of