FINANCE CASE STUDY
Case Study
Date Business Activity Income Statement Balance Sheet CASH Cash Flow Statement
1-Jan-20 Rs.2,00,000 capital introduced in business by the owners For the calender year 2020. Liability 31-Dec-20 Assets 31-Dec-20 For the calender year 2020.
1-Jan-20 Took a loan of Rs.20,000 from bank for
working capital, Interest rate is 10% per annum.
Principal needs to be repaid after 2 years.
Interest for year 2020 was paid in cash at end of year 2020.
2-Jan-20 Purchased office equipment for Rs. 10,000.
2-Jan-20 Paid to landlord Rs. 3,000 as security deposit and
Rs. 6,000 as rent for full year of 2020
5-Jan-20 Purchased and received 1000 books at a cost
of Rs.50 per book for a total of Rs.50,000.
Paid 50% amount in cash and the remaining
50% amount is payable by 5 Jan 2021
18-Apr-20 Spent Rs.2,500 in TV advertisement Profit
20-Apr-20 Sold for cash 400 books at Rs.300 each book. Check
24-Jun-20 Spend Rs. 8000 on general and administrative activities
27-Sep-20 Hire a part time clerk to whom company will pay Prepare the financial statements for the calender year 2020.
Rs.100/hr. Clerk works for 125 hrs before 30th Dec 2020.
50% amount was paid in cash in 2020 and Management estimates and assumptions
the remaining 50% would be paid in 2021 Office equipments have an estimated life of 2 yrs and salvage value of 0.
Depreciation method to be used is SLM.