Presented to: Dr A C Mehta

Prepared By : Bijay Sunuwar Kashyap M Milansinh Jetavat Mitravinda Gadhvi Nisha Dubey Pratik Vagadia Ronak Patel Shikha K

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Introduction Opening Balance Sheet Working Points Closing Balance Sheet Income Statement Accounting Concepts SWOT Analysis Conclusion

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Introduction Of Case

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G H Patel P G Institute of Business Management

Mr and Mrs Henry Antoine And Mrs Sandra Landers form a partnership.

Nov 1,2005-they contributed cash and agreed to share in the profits proportionally to their contribution.

The Antoine's contributed all of their savings, while Mrs Landers from the proceed of her late husband’s insurance policy.

CONT…..

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They opened the restaurant shortly after, in winter of 2005-2006.But it was not successful.

Mar 31,2006-Mrs Antoine discovered that Mr Antoine and Mrs Landers had disappeared.

Mr Antoine left some of his clothes and Mrs Landers took all her possessions. The cash register and its contents were also missing.

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Mrs Antoine concluded that the partnership was dissolved and the court subsequently affirmed its dissolution.

Mrs Antoine decides to continue operating the cafe. She realized that the account should have to be made at the end of March 2006.

Mrs Antoine asked Mr Donald Simpson ,a friend , to assist her with the accounting.

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1. Capital 48,000

2. Monthly Rent 1,500

3. Borrowed Fund 21,000

4. Equipments 53,200

5. Food (stock ) 2,800

6. License & Cash Register 2,828

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Opening Balance Sheet

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Asset Amount Liabilities Amount

Food & Beverages 2,800 Bank Loan 21,000

Operating license fees 1,428 Owners Capital

Cash Register 1,400 Mr Antoine 16,000

Checking A/c 10,172 Mrs Antoine 16,000

Equipment 53,200 Mrs Sandra Landers 16,000

Total 69,000 Total 69,000

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Working Notes

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Assests LiabilityInventory

Cash & Cash Equi

Equipments

PrepaidExp

Cash Registered

Owners

Equity

Bank Loan

Trade payabl

e

Particulars

2,800 10,172 53,200 1,428 1,400 48,000

21,000

+1,583

(Opening)

-370 -7,500 -2,445 -595 -1,400

-7,500 -2,100 Rent Expense

-311 -1400 Loss by theft

+870 -311 Stolen Cash-2,100 +870 Revenue-101 -1,583 Supplier

Exp-2,445 Depreciatio

n Expense-370 Food &

beverages Exp

-101 Miscellaneous

Expense-595 Local

Operating Exp

2,430 1,030 50,755 833 0 34,565

18,900

1,583 (Closing)

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Closing balance sheet

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Assets $ Liabilities &Current Assets Owners Equity

Inventories 2,430 Mr Henry Antoine

11,522

Prepaid Expenses

833 Mrs Henry Antoine

11,522

Cash & Cash Equivalents

1,030 Mrs Sandra Landers

11,522

Non Current Assets

Bank Loans 18,900

Equipments 50,755 Trade payable 1,58355,048 55,048

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RevenueSki Instructor 870 870

ExpensesPayment to supplier 1,583Food & Beverages Expenses

370

Bank Loan 2100Rent Loan 7,500Local License Expense 595Loss by theft + stolen cash

1400 + 311

Miscellaneous Expenses

101 13960

Net Loss 13,435

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Opening Balance 46,000Net Loss -13,435Closing Balance 35,565Equity of Mrs Henry Antonie -11,521Equity of Mr Henry Antonie & Mrs Sandra

23,044

Withdraw of Cash & Cash Registered

-1,711

21,333

Mr Henry Antonie & Mrs Sandra Landers can claim $21,333 if the patnership was disolved on march 30,2006

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1. Money Measurement2. Entity3. Going Concern4. Cost5. Dual Aspect

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This concept convey that in accounting we record only those transaction which can be represented in terms of money.

Limitation

1. Key issues which cant be represented in money , can not be recorded.

2. We assume that value of money does not change over the period of time.

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According to this concept , it is assumed that business has separate existence and its entity is different from that of its owner.

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According to this concept it is assumed that business concern will continue for long period and same will not close or liquidate in near future.

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It’s a fundamental concept of accounting , closely related to the going concern concept, is that an asset is ordinarily entered initially in the accounting records at the price paid to acquire it.

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According to this principle every business transaction has two fold effect.

1) From the angle of benefit received 2) From the angle of benefit given.

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Their entrepreneurial skill is really appreciable

Buying a running café thus reducing cost and attracting customers

Division of responsibility among themselves.

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Lack of any written agreement among themselves.

Lack of transparency among the partners . No proper planning. No future action plan in case if business

fails.

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Increase market share Expand the business

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Less Knowledge about Accounting Over burden of responsibilities Uncertain future

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Disregarding the marital complications, do you suppose that the partners would have been able to receive their proportional share of the equity determined in balance sheet as of March 30, 2006, if the partnership was dissolved on March 30, 2006 ??? Why???

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Ans. :- YES According to Separate Business Entity concept it is assumed that business has

separate existence and its entity is different from that of its owner.

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“DESPITE THE TRUST ON YOUR BUSINESS PARTNER; STAY ALERT & DO NOT COMBINE BUSINESS AND RELATIONS”

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Thank You…

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