28 august accounting for business ii
TRANSCRIPT
www.afterschoool.tk AFTERSCHO☺OL's MATERIAL FOR PGPSE PARTICIPANTS
ACCOUNTING FOR BUSINESS
AFTERSCHO☺OL – DEVELOPING CHANGE MAKERS
CENTRE FOR SOCIAL ENTREPRENEURSHIP PGPSE PROGRAMME –
World’ Most Comprehensive programme in social entrepreneurship & spiritual entrepreneurship
OPEN FOR ALL FREE FOR ALL
www.afterschoool.tk AFTERSCHO☺OL's MATERIAL FOR PGPSE PARTICIPANTS
ACCOUNTING FOR BUSINESS
Dr. T.K. Jain.
AFTERSCHO☺OLCentre for social entrepreneurship
Bikaner
M: 9414430763
www.afterschool.tk
www.afterschoool.tk
www.afterschoool.tk AFTERSCHO☺OL's MATERIAL FOR PGPSE PARTICIPANTS
Your balance as per your bank account is 23000 (Debit). However, Cheques of Rs. 2000 have been deposited by you in bank, but they have not yet cleared. What is bank pass book balance (in bank’s books)?
The bank has not yet credited for these 2000, so the bank balance is Rs. 21000 Credit balance.
www.afterschoool.tk AFTERSCHO☺OL's MATERIAL FOR PGPSE PARTICIPANTS
My Bank Passbook balance is Rs. 30000 Debit, I have issued one cheque of Rs. 6000, which has not yet been presented in the bank, what is my balance in my bank account?
My bank balance before issue of cheque would be Rs. 30000 Credit. But, once I issue cheque, my balance would be 36000 Credit. Thus as per my bank account, my balance is Rs. 36000 Credit.
www.afterschoool.tk AFTERSCHO☺OL's MATERIAL FOR PGPSE PARTICIPANTS
My bank account shows Rs. 30000 Debit. The bank has directly received Rs. 1000. Bank has also dishonoured a Cheque of Rs. 5000 due to mutilation. What is my bank passbook balance?
Actually my bank balance has increased by Rs. 1000. However, actually, my balance is more by 5000 also, as that cheque has not yet been paid by bank (dishonoured). Thus my bank passbook will show balance of Rs. 36000 Credit balance.
www.afterschoool.tk AFTERSCHO☺OL's MATERIAL FOR PGPSE PARTICIPANTS
My bank passbook shows Rs. 4000 Debit. I come to know of a few things, which I have not yet entered in my accounts. I come to know that bank has charged Rs. 1000 as locker charges. Bank has also given me a wrong credit of Rs. 500. What is the balance of my bank account (without these adjustments)?
I am not aware of locker charges, so my bank account shows 1000 less, however, there is a wrong credit of Rs. 500, so actually my balance should be 3500 Credit in my account).
www.afterschoool.tk AFTERSCHO☺OL's MATERIAL FOR PGPSE PARTICIPANTS
What are essential features of a partnership?
1. Agreement between the partners (verbal, oral or written)
2. At least two partners
3. Agreement for business ( business is necessary).
4. Registration of partnership is not compulsory
www.afterschoool.tk AFTERSCHO☺OL's MATERIAL FOR PGPSE PARTICIPANTS
I have given Rs. 1 lakh as loan to my firm, there is no express agreement. How much interest will I get?
6000 (@ 6% per annum).
www.afterschoool.tk AFTERSCHO☺OL's MATERIAL FOR PGPSE PARTICIPANTS
Ram and Shyam are partners. They have invested Rs. 10 Lakh and 5 Lakh respectively. Annual profit is Rs. 3 Lakh. What will be the share of Ram. There is no agreement regarding profit sharing?
Equal (1.5 Lakh each). When there is no agreement, the
partners share profits equally).
www.afterschoool.tk AFTERSCHO☺OL's MATERIAL FOR PGPSE PARTICIPANTS
Do we prepare P & L appropriation account for proprietory firm also?
Where only one person is managing his business, it is called proprietorship business. It does not require any P & L appropriation account. But in partnership, you have to prepare & L Appropriation Account.
www.afterschoool.tk AFTERSCHO☺OL's MATERIAL FOR PGPSE PARTICIPANTS
The net profit of the firm is 12 Lakh. X, Y, Z have capital Rs. 20 Lakh each. X has given a loan of Rs. 10 Lakh and demands interest @12%. Y demands salary Rs. 5 lakh. Z has taken drawings of Rs. 10 Lakh from the business and other partners are demanding interest from him. How will you divide profits?
Divide profit equally between X, Y, Z ( each person will get Rs. 4 Lakh). Other issues have no relevance without agreement.
www.afterschoool.tk AFTERSCHO☺OL's MATERIAL FOR PGPSE PARTICIPANTS
We have a provision to pay interest @ 5% on capital. My capital account shows capital of 10 Lakh and my current account shows balance of Rs. 5 Lakh. How much interest will I get?
= 50000 (interest is payable only on capital account and not on current account).
www.afterschoool.tk AFTERSCHO☺OL's MATERIAL FOR PGPSE PARTICIPANTS
Is there any act for joint ventures also?
No specific Law. General business laws are applicable on join ventures.
www.afterschoool.tk AFTERSCHO☺OL's MATERIAL FOR PGPSE PARTICIPANTS
I and Ram decide to work together to repair a bridge in 2 months. Is it partnership?
It is a joint venture and not a partnership. A small time bound work undertaken together is called joint venture. A partnership is generally a long term business. (partnership can also be time bound).
www.afterschoool.tk AFTERSCHO☺OL's MATERIAL FOR PGPSE PARTICIPANTS
My annual profits are Rs. 20000 each on capital employed of Rs. 70000. General rate of return is 20%. What is my super profit? 20% of 70000 is 14000 But I am earning Rs. 20000. Thus my super profit is Rs. 6000 ans.
www.afterschoool.tk AFTERSCHO☺OL's MATERIAL FOR PGPSE PARTICIPANTS
In the previous question, what is my goodwill at 3 year super profit?
6000*3 = 18000
www.afterschoool.tk AFTERSCHO☺OL's MATERIAL FOR PGPSE PARTICIPANTS
What is my goodwill at 5 year annuity of superprofit? Rate = 15%
First year: 6000/(1+.15) = 5217 IInd year = 6000/(1+.15)^2 = 4536 IIIrd year = 6000/(1+.15)^3 =3945 IVth year = 6000/(1+.15)^4 = 3430 Vth year 6000/(1+.15)^5 = 2983 Total Value = 20111. answer.
www.afterschoool.tk AFTERSCHO☺OL's MATERIAL FOR PGPSE PARTICIPANTS
In the previous question, use capitalisation method to find my goodwill. Normal rate = 20%?
My average profit is 20000 Let us divide 20000 by normal rate =20000/.2 = 100000 My capital employed is only 70000 Goodwill = capitalisation – capital
employed =100000-70000= 30000answer.
www.afterschoool.tk AFTERSCHO☺OL's MATERIAL FOR PGPSE PARTICIPANTS
Lata, Khushboo and Anju are partners sharing profits in the ratio 3:2:1, they decide to change profit sharing ratio to 1:2:3. Who is gaining, and what is her gaining ratio? Anju is gaining. Gaining ratio = New ratio-old ratio Her previous ratio was 1/6. New ratio is 3/6 3/6-1/6 = 2/6 or 1/3 (gaining ratio) Lata is sacrifcing. Her sacrificing ratio is
(1/6 – 3/6 ) = -1/3.
www.afterschoool.tk AFTERSCHO☺OL's MATERIAL FOR PGPSE PARTICIPANTS
My profits for Last three years are 20000, 50000, and 1 Lakh. What is the difference if instead of normal profit, I go for weighted average profit?
My normal profit is (20000+50000+100000)/3 = 56666
My weighted average profit is : (20000*1+50000*2+100000*3)/6 =70000 Thus the difference is Rs. 13334. ans.
www.afterschoool.tk AFTERSCHO☺OL's MATERIAL FOR PGPSE PARTICIPANTS
On joining the firm Nidhi gave a goodwill of Rs. 5000 only to Jayati. Their new profit sharing ratio is equal (Nidhi, Jayati and Sapna). The goodwill of the firm is 15000. What was their earlier profit sharing ratio?
Profit sharint ratios are : 1:1:1 Sapna has not sacrificed, so her profit
sharing ratio was earlier also 1/3, thus Jayati had a profit sharing ratio of 2/3.
Thus their profit sharing ratio was 2:1 answer.
www.afterschoool.tk AFTERSCHO☺OL's MATERIAL FOR PGPSE PARTICIPANTS
Goutam, Dhawal and Prateek are partners sharing profit equally. They take Ajay also. Goutam gives Ajay profit guarantee of 1 Lakh. They will now also share profits equally. Total profit is 2 Lakh, what is share of Ajay and Goutam?
Ajay will get Rs. 1 Lakh. Goutam will have -50000 as his share of profit (he has to pay from his pocked the deficit of Rs. 50000). Ans.
www.afterschoool.tk AFTERSCHO☺OL's MATERIAL FOR PGPSE PARTICIPANTS
You have admitted a new partner. You have revalued all assets and goodwill. Balance sheet will show what ? Balance Sheet will show revalued assets
and liabilities. Goodwill will not be shown, it will be transferred to partners’ capital accounts.
www.afterschoool.tk AFTERSCHO☺OL's MATERIAL FOR PGPSE PARTICIPANTS
ABOUT AFTERSCHOOOL Afterschoool conducts three year integrated PGPSE (after
class 12th along with IAS / CA / CS) and 18 month PGPSE (Post Graduate Programme in Social Entrepreneurship) along with preparation for CS / CFP / CFA /CMA / FRM. This course is also available online also. It also conducts workshops on social entrepreneurship in schools and colleges all over India – start social entrepreneurship club in your institution today with the help from afterschoool and help us in developing society.
www.afterschoool.tk AFTERSCHO☺OL's MATERIAL FOR PGPSE PARTICIPANTS
Why such a programme? To promote people to take up entrepreneurship
and help develop the society To enable people to take up franchising and
other such options to start a business / social development project
To enable people to take up social development as their mission
To enable people to promote spirituality and positive thinking in the world
www.afterschoool.tk AFTERSCHO☺OL's MATERIAL FOR PGPSE PARTICIPANTS
Who are our supporters?
Afterschoolians, our past beneficiaries, entrepreneurs and social entrepreneurs are supporting us.
You can also support us – not necessarily by money – but by being promotor of our concept and our ideas.
www.afterschoool.tk AFTERSCHO☺OL's MATERIAL FOR PGPSE PARTICIPANTS
About AFTERSCHOOOL PGPSE – the best programme for developing great entrepreneurs
Most flexible, adaptive but rigorous programme Available in distance learning mode Case study focused- latest cases Industry oriented practical curriculum Designed to make you entrepreneurs – not just
an employee Option to take up part time job – so earn while
you learn The only absolutely free course on internet
www.afterschoool.tk AFTERSCHO☺OL's MATERIAL FOR PGPSE PARTICIPANTS
Workshops from AFTERSCHOOOL IIF, Delhi CIPS, Jaipur ICSI Hyderabad Branch Gyan Vihar, Jaipur Apex Institute of Management, Jaipur Aravali Institute of Management, Jodhpur Xavier Institute of Management,
Bhubaneshwar Pacific Institute, Udaipur Engineering College, Hyderabad
www.afterschoool.tk AFTERSCHO☺OL's MATERIAL FOR PGPSE PARTICIPANTS
Flexible Specialisations: Spiritualising business and society Rural development and transformation HRD and Education, Social Development NGO and voluntary work Investment analysis,microfinance and inclusion Retail sector, BPO, KPO Accounting & Information system (with CA / CS /CMA) Hospital management and Health care Hospitality sector and culture and heritage Other sectors of high growth, high technology and social
relevance
www.afterschoool.tk AFTERSCHO☺OL's MATERIAL FOR PGPSE PARTICIPANTS
Salient features: The only programme of its kind (in the whole world) No publicity and low profile course For those who want to achieve success in life – not just a
degree Indepth knowledge and expertise Professional approac: World class approach Strong intellectual and business capabilities Flexible – you may stay for a month and continue the rest of
the education by distance mode. / you may attend weekend classes
Scholarships for those from poor economic background Latest and constantly changing curriculum – keeping pace
with the time Placement for those who are interested Admissions open throughout the year Latest and most advanced technologies, books and study
material
www.afterschoool.tk AFTERSCHO☺OL's MATERIAL FOR PGPSE PARTICIPANTS
Components Pedagogy curriculum and approach based on IIM Ahmedabad and ISB
Hyderabad (the founder is alumnus from IIMA & ISB Hyderabad) Meditation, spiritualisation, and self development Essential softwares for business Business plan, Research projects Participation in conferences / seminars Workshops on leadership, team building etc. Written submissions of research projects/articles / papers Interview of entrepreneurs, writing biographies of entrepreneurs Editing of journals / newsletters Consultancy / research projects Assignments, communication skill workshops Participation in conferences and seminars Group discussions, mock interviews, self development diaryng Mind Power Training & writing workshop (by Dr. T.K.Jain)
www.afterschoool.tk AFTERSCHO☺OL's MATERIAL FOR PGPSE PARTICIPANTS
Pedagogy Case analysis, Articles from Harvard Business Review Quiz, seminars, workshops, games, Visits to entrepreneurs and industrial visits Presentations, Latest audio-visuals Group discussions and group projects Periodic self assessment Mentoring and counselling Study exchange programme (with institutions out of India) Rural development / Social welfare projects
www.afterschoool.tk AFTERSCHO☺OL's MATERIAL FOR PGPSE PARTICIPANTS
Branches AFTERSCHOOOL will shortly open its
branches in important cities in India including Delhi, Kota, Mumbai, Gurgaon and other important cities. Afterschooolians will be responsible for managing and developing these branches – and for promoting social entrepreneurs.
www.afterschoool.tk AFTERSCHO☺OL's MATERIAL FOR PGPSE PARTICIPANTS
Case Studies
We want to write case studies on social entrepreneurs, first generation entrepreneurs, ethical entrepreneurs. Please help us in this process. Help us to be in touch with entrepreneurs, so that we may develop entrepreneurs.
www.afterschoool.tk AFTERSCHO☺OL's MATERIAL FOR PGPSE PARTICIPANTS
Basic values at afterschoool Share to learn more Interact to develop yourself Fear is your worst enemy Make mistakes to learn Study & discuss in a group Criticism is the healthy route to mutual support
and help Ask fundamental questions : why, when, how
& where? Embrace change – and compete with yourself
only
www.afterschoool.tk AFTERSCHO☺OL's MATERIAL FOR PGPSE PARTICIPANTS
www.afterschoool.tk social entrepreneurship for better society