Ram and Raghav are twin brothers. …
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Ram and Raghav are twin brothers. Ram was interested in computers and would find the time to
always work on computers either at college or at his friends place.His Keen interest in the subject
made him take up computer software for his degree course. He pleaded with his father Mr rangan
and purchase the computer for his use at home. Raghav was always interested in sitting at his
father’s shop at the nearby market place selling electrical appliances he would often go and help his
father at the shop after college hours.
Mr rangan was happy that Raghav showed interest in his business but was worried about Ram who
would always spend time with computers and modern gadgets. He felt that if the interest of the two
sons be put together they could start a new business of their own. The boom in the IT industry made
him find ways to satisfy his son’s dream.
After college, the twins were drifting apart due to varied interest . Rangan decided that this is the
time for him to intervene and make decisions for his sons. he asked Raghav a commerce graduate to
draw a proposal for the same. Raghav came out with the following ideas:
The area they decided to run a shop consisted of lower income group families and many of them did
not poses computers at home.
The shop could provide the following:
-computer classes for various age groups.
-computer using facilities on payment per hourly basis and printing of documents from computers.
-internet access facility at the prevailing market rates by entering into contract with VSNL.
-computer games corner for children.
Ram jump at the idea and they made up a common proposal. Ram wanted that they purchased 10
computers and start with two areas of operation and expand when things go well.
The shop they had at the market place was a single story building. Their father offered to build the
first floor and give it to them for their business.. he spend rs 100000 on construction facility and give
them rs 250000 for the business. The sons went to bank and put up their proposal and manage to
get a loan to the extent of 75% of the cost of computer rs 400000 with printers. As the bank manager
was aware of the creditworthiness of Mr rangan .he advanced the loan of rs 3 lakh. Total amount to
be repaid will be rupees 360000 including interest in three annual installment as follows:
-end of 1
st year=rs.1,30,000(1,00,000+30000)
-end of 2nd year=rs.1,20,000(1,00,000+20,000)
-end of 3rd year=rs.1,10,000(1,00,000+10,000)
They started business on first April,2016. Raghav decided to deposit rs 2,40,000 in the bank .he gave
rs 100000 to computer company as 25% of the value of computers purchased and rupees 3 lakh out
of bank loan availed. he deposited rs.1,000 for the electrical connection with the electricity board as
security deposit. He paid a deposit of rs 100000 with VSNL for the internet connection. he used the
telephone connection at the shop as there were two connections at the shop the brothers got the
computer cafe furnished by paying rs 25000. Raghav got pamphlets printed and distributed at the
cost of rupees 4500 in the surrounding colonies.All payments what to be made by cheques. All the receipts when cash to be deposited in the bank on
the same day.
The students on the average paid a monthly fee of rs 1500 for the three months computer evening
classes.
There were a number of Internet subscribers and receipts on the account of internet facility was
rupees 10000 amount in the first quarter on an average. The decided to buy and sell computer
stationery also like floppy disc CDS at etc.
At the end of the year the results showed the following:
Total revenue including sales of computer stationery rs. 498000
Purchase of computer stationery rs 55000
Electricity charges yet to be paid rs 1,24,000
Telephone charges 34 000
Petty expenses 12000
Entertainment expenses 10000
maintenance expenses 10000
There was a helper at their father’s shop who agreed to clean up the computer cafe and fetched
water to visitors. For these services, he was paid rs.500. The brothers withdrew rs 3000 by cheque
every month for their personal expenses. They paid the bank loan regularly. Father was pleased at
their sons efficiency.
He wanted to expand business.
You are required to journalise the above transactions. Post them into ledger and prepare trial
balance.
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- 1 answers
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Rashi Sharma 2 months, 2 weeks ago
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