This document contains details about the Mansa Building case study prepared by Group IV. It includes the names of group members, key details about the building such as purchase price and year, and financial statements for the year 2000 including a profit and loss account, balance sheet, bank account, and various working notes providing additional details. The group believes their prepared financial statements following accounting standards are clearer and more systematic than the statements prepared by Mr. Pandit for the case.

1. ASSIGNMENT III
MANSA BUILDING CASE
STUDY
Submitted by Group IV

2. Members of the TeamMembers of the Team
 Ruchika JainRuchika Jain
 Heena TejwaniHeena Tejwani
 Angadjeet WaliaAngadjeet Walia
 HiteshHitesh
 Chetna JainChetna Jain
 Dharmesh ChanchlaniDharmesh Chanchlani
 Meenal KhatriMeenal Khatri
 Amit ChauhanAmit Chauhan

3. Case at a glanceCase at a glance
 Mansa Building , was constructed in Jan 1981Mansa Building , was constructed in Jan 1981
at Delhi. It was a 4 story building , comprisingat 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-in-law Mr. Harshwardhan lookedHis brother-in-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.

4. 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

5. Balance Sheet
as on 31st
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

6. 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

7. Working Note 1
Actual amount of collection
Till dec. = 20,930/ 4 *100 = 5,23,250
After Dec. = +20,500
5,43,750

8.  Rent charged to P&L A/CRent charged to P&L A/C
Total Rent collected= 5,43,750Total 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
6,09,0006,09,000
Assuming that o/s rent of last year i.e. 4,250Assuming that o/s rent of last year i.e. 4,250
has been received this year.has been received this year.
WORKING NOTE 2

9. Working Note 3Working Note 3
Amt of collection chargesAmt of collection charges
Paid during the Year= 20,930Paid 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 = 200advance rent = 200
21,38021,380

10. Working Note 4Working Note 4
Calculation of depreciationCalculation of depreciation
Value of building =36,00,000Value of building =36,00,000
Life of building =30 yrsLife of building =30 yrs
Depreciation 3600000/30 =1,20,000Depreciation 3600000/30 =1,20,000

11. WORKING NOTE 5WORKING NOTE 5
 Painting charges charged to P & L A/CPainting charges charged to P & L A/C
 TOTAL PAINTING CHARGES = 50,000TOTAL PAINTING CHARGES = 50,000
 EXTERNAL PAINTING CHARGES=EXTERNAL PAINTING CHARGES=
30,00030,000
 INTERNAL PAINTING CHARGESINTERNAL 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.

12. According to us the statementAccording to us the statement
prepared inprepared in Exhibit 3Exhibit 3 should be inshould be in
format as performat as per Schedule 4 ofSchedule 4 of
Companies Act 1949Companies Act 1949 that is thethat is the
statement should be in balancestatement should be in balance
sheet format i.e. Liabilities onsheet format i.e. Liabilities on
Left side and Assets on Right sideLeft side and Assets on Right side
of the table .of the table .

13. Profit and loss account and balanceProfit and loss account and balance
sheet prepared by us are better thansheet prepared by us are better than
statement prepared by Mr. Panditstatement prepared by Mr. Pandit
because they provide the user withbecause they provide the user with
all the necessary information in aall the necessary information in a
systematic and easy way which cansystematic and easy way which can
be easily understood by any person.be easily understood by any person.
Statement prepared by Mr. PanditStatement prepared by Mr. Pandit
was not able to provide distinctionwas not able to provide distinction
between incomes and expenses. Thatbetween incomes and expenses. That
is why we feel proper accountingis why we feel proper accounting
methods should be used whilemethods should be used while
recording transactions of Mansarecording transactions of Mansa
Building .Building .