Indian Institute of Management Kashipur

PGP 2018-20, Term I

Financial Accounting
Quiz1
Maximum Marks: 15 Time: 30 Minutes.
Name..................... Roll No.....................

Ravi and Shankar, after completing their graduation from an engineering college decided to
start their own business of web designing as a partnership firm. They put Rs 5,00,000 each of
their own and made a partnership of 50:50. They got a business loan from a bank of Rs 15,
00,000. They hired a floor in a small business complex at a rent of Rs 50,000 p.m. and paid a
security money of Rs 4, 00,000 as security money. This money will be refunded at the time of
de-hiring the floor. They bought computers and other equipment for Rs 15,40,000 and
employed five IT graduates at a monthly salary of Rs 25,000 each. Partners decided to
commence their business on July 1, 2017.

In June 2018, Shankar got a job offer from US which he could not resist to accept. So he
decided to leave the partnership and it was agreed that Ravi will purchase his stake in the
business. On June 30, 2018 the state of business is as follows:
 They have paid bank loan of Rs 2,50,000 and interest on loan for one year.
 They have a bank balance of Rs 2,20,000.
 They value of computers and other equipment is decided at Rs 12,24,000.
 Amount to be received from clients Rs 4,32,600
 Salary of the staff for the month of June still to be paid.
 Cost of incomplete designing jobs, still to be billed to customers Rs 9,22,600

Required:
1. Prepare a balance sheet of the firm as on July 1, 2017. (5 Marks)
2. Prepare a balance sheet of the firm as on June 30, 2018. (7 Marks)
3. How much profit did the firm earn during last one year? (2 Marks)
4. How much money Ravi should pay to buy Shankar’s stake? (1 Mark)

Balance Sheet as on July 1st, 2017

Liabilities Amount Assets Amount

Balance Sheet as on June 30th 2018

Liabilities Amount Assets Amount
Calculation of Profit:
Particulars Amount

Calculation of Ravi’s Share:

Particulars Amount
 Indian Institute of Management Kashipur
PGP 2018-20, Term I
Financial Accounting
Quiz1
Maximum Marks: 15 Time: 30 Minutes.
Name..................... Roll No.....................

Ravi and Shankar, after completing their graduation from an engineering college decided to
start their own business of web designing as a partnership firm. They put Rs 5,00,000 each of
their own and made a partnership of 50:50. They got a business loan from a bank of Rs 10,
00,000. They hired a floor in a small business complex at a rent of Rs 50,000 p.m. and paid a
security money of Rs 4, 00,000 as security money. This money will be refunded at the time of
de-hiring the floor. They bought computers and other equipment for Rs 14,00,000 and
employed five IT graduates at a monthly salary of Rs 25,000 each. Partners decided to
commence their business on July 1, 2017.

In June 2018, Shankar got a job offer from US which he could not resist to accept. So he
decided to leave the partnership and it was agreed that Ravi will purchase his stake in the
business. On June 30, 2018 the state of business is as follows:
 They have paid bank loan of Rs 2,50,000 and interest on loan for one year.
 They have a bank balance of Rs 3,00,000.
 They value of computers and other equipment is decided at Rs 12,50,000.
 Amount to be received from clients Rs 4,32,600
 Salary of the staff for the month of June still to be paid.
 Cost of incomplete designing jobs, still to be billed to customers Rs 9,22,600

Required:
1. Prepare a balance sheet of the firm as on July 1, 2017. (5 Marks)
2. Prepare a balance sheet of the firm as on June 30, 2018. (7 Marks)
3. How much profit did the firm earn during last one year? (2 Marks)
4. How much money Ravi should pay to buy Shankar’s stake? (1 Mark)

Balance Sheet as on July 1st, 2017

Liabilities Amount Assets Amount

Balance Sheet as on June 30th 2018

Liabilities Amount Assets Amount
Calculation of Profit:
Particulars Amount

Calculation of Ravi’s Share:

Particulars Amount
 Indian Institute of Management Kashipur
PGP 2018-20, Term I
Financial Accounting
Quiz1
Maximum Marks: 15 Time: 30 Minutes.
Name..................... Roll No.....................

Ravi and Shankar, after completing their graduation from an engineering college decided to
start their own business of web designing as a partnership firm. They put Rs 6,00,000 each of
their own and made a partnership of 50:50. They got a business loan from a bank of Rs 10,
00,000. They hired a floor in a small business complex at a rent of Rs 50,000 p.m. and paid a
security money of Rs 4, 00,000 as security money. This money will be refunded at the time of
de-hiring the floor. They bought computers and other equipment for Rs 15,00,000 and
employed five IT graduates at a monthly salary of Rs 30,000 each. Partners decided to
commence their business on July 1, 2017.

In June 2018, Shankar got a job offer from US which he could not resist to accept. So he
decided to leave the partnership and it was agreed that Ravi will purchase his stake in the
business. On June 30, 2018 the state of business is as follows:
 They have paid bank loan of Rs 2,50,000 and interest on loan for one year.
 They have a bank balance of Rs 2,00,000.
 They value of computers and other equipment is decided at Rs 12,50,000.
 Amount to be received from clients Rs 4,32,600
 Salary of the staff for the month of June still to be paid.
 Cost of incomplete designing jobs, still to be billed to customers Rs 9,22,600

Required:
1. Prepare a balance sheet of the firm as on July 1, 2017. (5 Marks)
2. Prepare a balance sheet of the firm as on June 30, 2018. (7 Marks)
3. How much profit did the firm earn during last one year? (2 Marks)
4. How much money Ravi should pay to buy Shankar’s stake? (1 Mark)

Balance Sheet as on July 1st, 2017

Liabilities Amount Assets Amount

Balance Sheet as on June 30th 2018

Liabilities Amount Assets Amount
Calculation of Profit:
Particulars Amount

Calculation of Ravi’s Share:

Particulars Amount
 Indian Institute of Management Kashipur
PGP 2018-20, Term I
Financial Accounting
Quiz1
Maximum Marks: 15 Time: 30 Minutes.
Name..................... Roll No.....................

Ravi and Shankar, after completing their graduation from an engineering college decided to
start their own business of web designing as a partnership firm. They put Rs 4,00,000 each of
their own and made a partnership of 50:50. They got a business loan from a bank of Rs 12,
00,000. They hired a floor in a small business complex at a rent of Rs 50,000 p.m. and paid a
security money of Rs 4, 00,000 as security money. This money will be refunded at the time of
de-hiring the floor. They bought computers and other equipment for Rs 15,00,000 and
employed five IT graduates at a monthly salary of Rs 30,000 each. Partners decided to
commence their business on July 1, 2017.

In June 2018, Shankar got a job offer from US which he could not resist to accept. So he
decided to leave the partnership and it was agreed that Ravi will purchase his stake in the
business. On June 30, 2018 the state of business is as follows:
 They have paid bank loan of Rs 2,50,000 and interest on loan for one year.
 They have a bank balance of Rs 2,00,000.
 They value of computers and other equipment is decided at Rs 12,50,000.
 Amount to be received from clients Rs 4,32,600
 Salary of the staff for the month of June still to be paid.
 Cost of incomplete designing jobs, still to be billed to customers Rs 9,22,600

Required:
1. Prepare a balance sheet of the firm as on July 1, 2017. (5 Marks)
2. Prepare a balance sheet of the firm as on June 30, 2018. (7 Marks)
3. How much profit did the firm earn during last one year? (2 Marks)
4. How much money Ravi should pay to buy Shankar’s stake? (1 Mark)

Balance Sheet as on July 1st, 2017

Liabilities Amount Assets Amount

Total Liabilities Total Assets

Balance Sheet as on June 30th 2018

Liabilities Amount Assets Amount

Total Liabilities Total Assets

Calculation of Profit:
Particulars Amount

Calculation of Ravi’s Share:

Particulars Amount