1. • ACKNOWLEDGEMENT
• I would like to convey my heartfelt thanks to---
-------------, my Accounts Teacher who always
gave valuable suggestions and guidance for
completion of my project. She/He helped me
to understand and remember important
details of the project. She/He helped me and
gave her guidance in completing of my project
successfully.

2. •
• CERTIFICATE
•
• This is to certify that---------, student of Class
XII, Section------- of this school has completed
her project file under my supervision. She/He
has take proper care and shown utmost
sincerely in completion of this project. I further
certify that this project is upto my expectation
and as per guidelines issued by CBSE.

3. • COMPREHENSIVE PROJECT PROBLEM
• KHANNA SOFTWARE LIMITED
• After working for over a decade in leading software company, K.K. Khanna
and his wife Sheela decided to set up their own software firm, Khanna
Software Limited on June 1. Each of them deposited Rs. 20,000 in a bank
account in the name of the company in exchange for 2,000 shares of Rs.
10 each. They followed the practice of depositing in the bank all amounts
received from customers and making all payment by cheque. On June 2,
Amit Lal, an old friend of K.K. Khanna joined the company as Office
Manager on a monthly salary of Rs. 3,500 regardless of the number of
days he attended office. Although Lal had no knowledge of accounting, he
was methodical in filling letters, invoices and other papers. He put all the
purchase invoices in a file. Also, he noted down details of cheques
received and issued in a diary. The following information is available from
the file and diary kept by Lal. On June 1, the Khanna Software Limited
borrowed Rs. 24,000 from the bank. The same day, they ordered
computer costing Rs. 50,000. An advance of Rs. 20,000 was paid with the
order and the balance amount was to be paid in there equal installments
on the fifth of every month beginning July. The computer was received on
June 6. On June 2, they hire an office room on a monthly rental of Rs.
2,600 payable on the first day of the month. The rent for June was paid in
full immediately, two programming assistants were appointed on June3.
Each of them was to be paid Rs. 280 per day for the actual number of days
worked.

4. In June, the company billed customers for Rs. 52,800 for
programming services, cheques totaling Rs. 25,200 were received
from customers on account. In addition, a Cheque for Rs. 3,200 was
given by a customer as payment for services to be provided in July.
During the month the company ordered supplies on credit for Rs.
8,200. Of these supplies costing Rs. 4,340 were received on June 8
and the remaining items were delivered on July3. One box of floppy
disk costing Rs. 980 differed slightly from the purchase specifications
all other items were as ordered and were paid for June 16. On June
27, the supplier informed Lal that he was willing to give a discount of
Rs. 80 on the floppy disks to make up for the deviation. The proposal
was accepted and the amount was paid on July 4. On June 29, the
bank loan was repaid with interest of Rs. 240. On June 30, an
electricity bill for Rs. 760 was received but this could be paid only on
July 1.During the month, the company had twenty one working days.
While one of the Assistant reported for work on all working days, the
other worked for only seventeen days. The salaries of the Assistants
and Manager were paid on June 30. The June 30th Inventory of
supplies was figured to be about Rs. 3,200.

5. • Required :-
•
• Prepare the Trial Balance, Profit & Loss Account & Balance-sheet of Khanna
Software Ltd. As per schedule VI of the Companies Act ‘1956.
•
• The Khanna Software Ltd. Proposes to declare and pay a divided of Rs, 5 per
share because they have cash in excess of Rs. 30,000. Comment on the
proposal.
•
• Prepare the Pie Diagrams to represent the Current Assets and Debit side of
Profit & Loss Account.
•
• Comment on the Profitabilities and Liquidities of the company with the help
of suitable ratios.
•
• Prepare Cash Flow Statement by direct method according to AS-3(revised).
•
• Show various Cash Flows (Operating, Investing and Financing) by using Bar
Diagrams.
•