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Assignment Iii Mansa Building Case Study: Submitted by Group IV

This document contains details about the Mansa Building case study submitted by Group IV, including: - The members of the group working on the case study. - Background information on Mansa Building such as when it was constructed, number of flats and shops, acquisition details. - The profit and loss account, balance sheet, and bank account for the year 2000, including details of income, expenses, assets and liabilities. - Various working notes providing calculations and additional details to support the financial statements.

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Heena Tejwani
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© Attribution Non-Commercial (BY-NC)
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Download as PPT, PDF, TXT or read online on Scribd
4K views

Assignment Iii Mansa Building Case Study: Submitted by Group IV

This document contains details about the Mansa Building case study submitted by Group IV, including: - The members of the group working on the case study. - Background information on Mansa Building such as when it was constructed, number of flats and shops, acquisition details. - The profit and loss account, balance sheet, and bank account for the year 2000, including details of income, expenses, assets and liabilities. - Various working notes providing calculations and additional details to support the financial statements.

Uploaded by

Heena Tejwani
Copyright
© Attribution Non-Commercial (BY-NC)
Available Formats
Download as PPT, PDF, TXT or read online on Scribd
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ASSIGNMENT III

MANSA BUILDING CASE


STUDY
Submitted by Group IV
Members of the Team

 Ruchika Jain
 Heena Tejwani
 Angadjeet Walia
 Hitesh
 Chetna Jain
 Dharmesh Chanchlani
 Meenal Khatri
 Amit Chauhan
Case at a glance
 Mansa Building , was constructed in Jan 1981 at
Delhi. It was a 4 story building , comprising of 20
flats & 8 shops.
 It was acquired on a cash down basis.
 Mr. Dinesh Acharya purchased it in 1990.
 His brother-in-law Mr. Harshwardhan looked after
the building & the accounts.
 Total acquistion cost was Rs. 48,00,000.
 Land valued at Rs. 12,00,000 (1990).
 Estimated life of the building was 30 yrs.
P&L A/c for the year-2000
Particulars Amount Particulars Amount
To Repair & Painting By collection of Rent 6,09,000
Expenses ( W.N. 5 ) 41,770 ( W.N. 1,2 )
To Collection charges 21,380 By Premium Share 1,00,000
( W.N. 3 ) (75000 + 25000 O/s)
To Insurance 10,000
To property rates & tax 2,40,000
To operating expenses 1,030
To depreciation 1,20,000
To Net Profit 2,74,820

7,09,000 7,09,000
Balance Sheet
as on 31st Dec 2000

Liabilities Amount Assets Amount


Capital 48,00,000 Building 25,20,000
Less Drawing Less Dep. 1,20,000 24,00,000
47,00,000 Land 12,00,000
2,74,820 Prepaid Insurance 10,000
Prepaid collection 200
1,00,000 5,000 Prepaid painting
P&L 60,000 expenses
Rent Received Adv 820 Accrued Premium 10,000
O/s Tax 1,53,500 Accrued Rent 25,000
O/s collectn.charges Cash at Bank 74,500
Retained Earning 14,74,440
51,94,140 51,94,140
Bank Account
Particulars Amount Particulars Amount
To Balance b/d 12,89,420 By Drawing 1,00,000
To Rent ( W.N.1 ) 5,43,750 By Repairs & 51,770
To premium on Maintenance
transfer 75,000 By Insurance 20,000
By Rate & Taxes 2,40,000
By Collec charges 20,930
By Op Expenses 1,030
By Balance C/d 14,74,440

19,08,170 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
WORKING NOTE 2

 Rent charged to P&L A/C


Total Rent collected= 5,43,750
(+) O/s Rent received= 74,500
(-) prepaid Rent = 5,000
(-) Rent of last year = 4,250

6,09,000
Assuming that o/s rent of last year i.e. 4,250 has been
received this year.
Working Note 3

Amt of collection charges


Paid during the Year= 20,930
(+) o/s(20500*4%)= 820
(-) o/s of last year= 170
(-)Collection charges on
advance rent = 200

21,380
Working Note 4

Calculation of depreciation

Value of building =36,00,000


Life of building =30 yrs
Depreciation 3600000/30 =1,20,000
WORKING NOTE 5
 Painting charges charged to P & L A/C
 TOTAL PAINTING CHARGES = 50,000

 EXTERNAL PAINTING CHARGES= 30,000

 INTERNAL PAINTING CHARGES

(for 2 yrs.) =20,000


Therefore,for 1 yr it is 10,000 only.
Total painting and operating charges =30,000 +
10,000 + 1,770 = 41,770
According to us the statement
prepared in Exhibit 3 should be in
format as per Schedule 4 of Companies
Act 1949 that is the statement should
be in balance sheet format i.e.
Liabilities on Left side and Assets on
Right side of the table .
Profit and loss account and balance sheet
prepared by us are better than statement
prepared by Mr. Pandit because they
provide the user with all the necessary
information in a systematic and easy way
which can be easily understood by any
person.
Statement prepared by Mr. Pandit was not
able to provide distinction between
incomes and expenses. That is why we feel
proper accounting methods should be used
while recording transactions of Mansa
Building .

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