Case Study Indian Heritage

Indian Heritage Case Study Solution

Initial Investment of Rs 1,80,000/• Cash 1,80,000/- (Financing Activity)
• Owners’ Equity 1,80,000/Interest Free Debt of Rs 50,000/• Cash +50,000/- (Financing Activity)
• Debt 50,000/8th July 2008: 1,00,000/- as security money of House for Restaurant
• Cash (-) 1,00,000/- (Investing Activity)
• Prepaid Expense 1,00,000/Other Assets Added:
Furniture 80,000/-, Interior Work 44,000/-, Air Conditioner 20,000/-,
Inverter 15,000/-, Motor Pump 5,000/-, Flex Board 5,000/-, Wall
Coloring 20,000/-, Advertising Material 10,000/• Total Asset worth 1,99,000/• Cash (-) 1,99,000/- (Investing Activity)
Kitchen Equipments 60,000/• Cash (-) 60,000/- (Investing Activity)
• Assets 60,000/Raw Material 30,000/- (on credit)
• Inventory 30,000/• Credit Sale (liability) 30,000/-

Operation started on 15th August 2008
After 15 days of Operation sales was approx Rs 2500/- per month.
Thus total sale for 15 days is 37,500/• Cash 37,500/- (Operating Activity)
• Income in P&L 37,500/Bike Purchased after 15 days of operation for 40,000/• Asset 40,000/• Bike Payable (liability) 40,000/Average Monthly Sale for Sep 2008 to Apr 2009 was 80,000
Thus, for 8 months total sale was 6,40,000/• Cash 6,40,000/- (Operating Activity)
• Income in P&L 6,40,000/•
Total Expense on average per month are:
House Rent 30,000/-, Staff Salary 35,000/-, Gas 9,000/-, Coal 10,000/Telephone 2,000/-, Stationers 3,000/-, Transportation 2,000/-,
Electricity 10,000/Total Monthly Expense 1,01,000/- hence total yearly expense
12,12,000/• Expense in P&L 12,12,000/• Cash (-) 12,12,000/- (Operating Activity)

Total order from Greater Noida of 70,000/- from May 2009
For May & June 2009 total sales 1,40,000/• Income in P&L 1,40,000/• Cash increase from Operating Activities by 1,40,000/For July 2009 total sales 70,000/- but payment received in Aug 09
• Income in P&L increase by 70,000/• Add Account Receivable in asset by 70,000/Rs 80,000/- Borrowed in April 09 @6% Per