Group IV prepared a case study on Mansa Building, a 4-story building in Delhi constructed in 1981 and purchased by Mr. Dinesh Acharya in 1990. The case study includes the profit and loss account and balance sheet for the year 2000, which provide details on the building's revenues, expenses, assets, and liabilities. The group believes their P&L and balance sheet formats provide information in a clearer, more systematic way compared to the statement previously prepared by Mr. Pandit.
Group IV prepared a case study on Mansa Building, a 4-story building in Delhi constructed in 1981 and purchased by Mr. Dinesh Acharya in 1990. The case study includes the profit and loss account and balance sheet for the year 2000, which provide details on the building's revenues, expenses, assets, and liabilities. The group believes their P&L and balance sheet formats provide information in a clearer, more systematic way compared to the statement previously prepared by Mr. Pandit.
Group IV prepared a case study on Mansa Building, a 4-story building in Delhi constructed in 1981 and purchased by Mr. Dinesh Acharya in 1990. The case study includes the profit and loss account and balance sheet for the year 2000, which provide details on the building's revenues, expenses, assets, and liabilities. The group believes their P&L and balance sheet formats provide information in a clearer, more systematic way compared to the statement previously prepared by Mr. Pandit.
Group IV prepared a case study on Mansa Building, a 4-story building in Delhi constructed in 1981 and purchased by Mr. Dinesh Acharya in 1990. The case study includes the profit and loss account and balance sheet for the year 2000, which provide details on the building's revenues, expenses, assets, and liabilities. The group believes their P&L and balance sheet formats provide information in a clearer, more systematic way compared to the statement previously prepared by Mr. Pandit.
STUDY Submitted by Group IV Members of the Team Members of the Team Ruchika Jain Ruchika Jain Heena Tejwani Heena Tejwani Angadjeet Walia Angadjeet Walia Hitesh Hitesh Chetna Jain Chetna Jain Dharmesh Chanchlani Dharmesh Chanchlani Meenal Khatri Meenal Khatri Amit Chauhan Amit Chauhan Case at a glance Case at a glance Mansa Building , was constructed in Jan 1981 Mansa Building , was constructed in Jan 1981 at Delhi. It was a 4 story building , comprising at Delhi. It was a 4 story building , comprising of 20 flats & 8 shops. of 20 flats & 8 shops. It was acquired on a cash down basis. It was acquired on a cash down basis. Mr. Dinesh Acharya purchased it in 1990. Mr. Dinesh Acharya purchased it in 1990. His brother His brother--in in--law Mr. Harshwardhan looked law Mr. Harshwardhan looked after the building & the accounts. after the building & the accounts. Total acquistion cost was Rs. 48,00,000. Total acquistion cost was Rs. 48,00,000. Land valued at Rs. 12,00,000 (1990). Land valued at Rs. 12,00,000 (1990). Estimated life of the building was 30 yrs. Estimated life of the building was 30 yrs. P&L A/c for the year-2000 Particulars Amount Particulars Amount To Repair & Painting Expenses ( W.N. 5 ) To Collection charges ( W.N. 3 ) To Insurance To property rates & tax To operating expenses To depreciation To Net Profit 41,770 21,380 10,000 2,40,000 1,030 1,20,000 2,74,820 7,09,000 By collection of Rent ( W.N. 1,2 ) By Premium Share (75000 + 25000 O/s) 6,09,000 1,00,000 7,09,000 Balance Sheet as on 31 st Dec 2000 Liabilities Amount Assets Amount Capital 48,00,000 Less Drawing 1,00,000 P&L Rent Received Adv O/s Tax O/s collectn.charges Retained Earning 47,00,000 2,74,820 5,000 60,000 820 1,53,500 51,94,140 Building 25,20,000 Less Dep. 1,20,000 Land Prepaid Insurance Prepaid collection Prepaid painting expenses Accrued Premium Accrued Rent Cash at Bank 24,00,000 12,00,000 10,000 200 10,000 25,000 74,500 14,74,440 51,94,140 Bank Account Particulars Amount Particulars Amount To Balance b/d To Rent ( W.N.1 ) To premium on transfer 12,89,420 5,43,750 75,000 19,08,170 By Drawing By Repairs & Maintenance By Insurance By Rate & Taxes By Collec charges By Op Expenses By Balance C/d 1,00,000 51,770 20,000 2,40,000 20,930 1,030 14,74,440 19,08,170 Working Note 1 Actual amount of collection Till dec. = 20,930/ 4 *100 = 5,23,250 After Dec. = +20,500 5,43,750 Rent charged to P&L A/C Rent charged to P&L A/C Total Rent collected= 5,43,750 Total Rent collected= 5,43,750 (+) O/s Rent received= 74,500 (+) O/s Rent received= 74,500 ((--) prepaid Rent = 5,000 ) prepaid Rent = 5,000 ((--) Rent of last year = 4,250 ) Rent of last year = 4,250 6,09,000 6,09,000 Assuming that o/s rent of last year i.e. 4,250 Assuming that o/s rent of last year i.e. 4,250 has been received this year. has been received this year. WORKING NOTE 2 Working Note 3 Working Note 3 Amt of collection charges Amt of collection charges Paid during the Year= 20,930 Paid during the Year= 20,930 (+) o/s(20500*4%)= 820 (+) o/s(20500*4%)= 820 ((--) o/s of last year= 170 ) o/s of last year= 170 ((--)Collection charges on )Collection charges on advance rent = 200 advance rent = 200 21,380 21,380 Working Note 4 Working Note 4 Calculation of depreciation Calculation of depreciation Value of building =36,00,000 Value of building =36,00,000 Life of building =30 yrs Life of building =30 yrs Depreciation 3600000/30 =1,20,000 Depreciation 3600000/30 =1,20,000 WORKING NOTE 5 WORKING NOTE 5 Painting charges charged to P & L A/C Painting charges charged to P & L A/C TOTAL PAINTING CHARGES = 50,000 TOTAL PAINTING CHARGES = 50,000 EXTERNAL PAINTING CHARGES= 30,000 EXTERNAL PAINTING CHARGES= 30,000 INTERNAL PAINTING CHARGES INTERNAL PAINTING CHARGES (for 2 yrs.) (for 2 yrs.) =20,000 =20,000 Therefore,for 1 yr it is 10,000 only. Therefore,for 1 yr it is 10,000 only. Total painting and operating charges Total painting and operating charges =30,000 + 10,000 + 1,770 = 41,770 =30,000 + 10,000 + 1,770 = 41,770 According to us the statement According to us the statement prepared in prepared in Exhibit 3 Exhibit 3 should be in should be in format as per format as per Schedule 4 of Companies Schedule 4 of Companies Act 1949 Act 1949 that is the statement should that is the statement should be in balance sheet format i.e. be in balance sheet format i.e. Liabilities on Left side and Assets on Liabilities on Left side and Assets on Right side of the table . Right side of the table . Profit and loss account and balance sheet Profit and loss account and balance sheet prepared by us are better than statement prepared by us are better than statement prepared by Mr. Pandit because they prepared by Mr. Pandit because they provide the user with all the necessary provide the user with all the necessary information in a systematic and easy way information in a systematic and easy way which can be easily understood by any which can be easily understood by any person. person. Statement prepared by Mr. Pandit was not Statement prepared by Mr. Pandit was not able to provide distinction between able to provide distinction between incomes and expenses. That is why we feel incomes and expenses. That is why we feel proper accounting methods should be used proper accounting methods should be used while recording transactions of Mansa while recording transactions of Mansa Building . Building .
