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28 August Accounting For Business


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28 August Accounting For Business

  2. 2. ACCOUNTING FOR BUSINESS Dr. T.K. Jain. AFTERSCHO☺OL Centre for social entrepreneurship Bikaner M: 9414430763 [email_address]
  3. 3. What are essential features of a partnership? <ul><li>Agreement between the partners (verbal, oral or written) </li></ul><ul><li>At least two partners </li></ul><ul><li>Agreement for business ( business is necessary). </li></ul><ul><li>Registration of partnership is not compulsory </li></ul>
  4. 4. I have given Rs. 1 lakh as loan to my firm, there is no express agreement. How much interest will I get? <ul><li>6000 (@ 6% per annum). </li></ul>
  5. 5. Ram and Shyam are partners. They have invested Rs. 10 Lakh and 5 Lakh respectively. Annual profit is Rs. 3 Lakh. What will be the share of Ram. There is no agreement regarding profit sharing? <ul><li>Equal (1.5 Lakh each). </li></ul><ul><li>When there is no agreement, the partners share profits equally). </li></ul>
  6. 6. Do we prepare P & L appropriation account for proprietory firm also? <ul><li>Where only one person is managing his business, it is called proprietorship business. It does not require any P & L appropriation account. But in partnership, you have to prepare & L Appropriation Account. </li></ul>
  7. 7. The net profit of the firm is 12 Lakh. X, Y, Z have capital Rs. 20 Lakh each. X has given a loan of Rs. 10 Lakh and demands interest @12%. Y demands salary Rs. 5 lakh. Z has taken drawings of Rs. 10 Lakh from the business and other partners are demanding interest from him. How will you divide profits? <ul><li>Divide profit equally between X, Y, Z ( each person will get Rs. 4 Lakh). Other issues have no relevance without agreement. </li></ul>
  8. 8. We have a provision to pay interest @ 5% on capital. My capital account shows capital of 10 Lakh and my current account shows balance of Rs. 5 Lakh. How much interest will I get? <ul><li>= 50000 (interest is payable only on capital account and not on current account). </li></ul>
  9. 9. Is there any act for joint ventures also? <ul><li>No specific Law. General business laws are applicable on join ventures. </li></ul>
  10. 10. I and Ram decide to work together to repair a bridge in 2 months. Is it partnership? <ul><li>It is a joint venture and not a partnership. A small time bound work undertaken together is called joint venture. A partnership is generally a long term business. (partnership can also be time bound). </li></ul>
  11. 11. My annual profits are Rs. 20000 each on capital employed of Rs. 70000. General rate of return is 20%. What is my super profit? <ul><li>20% of 70000 is 14000 </li></ul><ul><li>But I am earning Rs. 20000. </li></ul><ul><li>Thus my super profit is Rs. 6000 ans. </li></ul>
  12. 12. In the previous question, what is my goodwill at 3 year super profit? <ul><li>6000*3 = 18000 </li></ul>
  13. 13. What is my goodwill at 5 year annuity of superprofit? Rate = 15% <ul><li>First year: 6000/(1+.15) = 5217 </li></ul><ul><li>IInd year = 6000/(1+.15)^2 = 4536 </li></ul><ul><li>IIIrd year = 6000/(1+.15)^3 =3945 </li></ul><ul><li>IVth year = 6000/(1+.15)^4 = 3430 </li></ul><ul><li>Vth year 6000/(1+.15)^5 = 2983 </li></ul><ul><li>Total Value = 20111. answer. </li></ul>
  14. 14. In the previous question, use capitalisation method to find my goodwill. Normal rate = 20%? <ul><li>My average profit is 20000 </li></ul><ul><li>Let us divide 20000 by normal rate </li></ul><ul><li>=20000/.2 = 100000 </li></ul><ul><li>My capital employed is only 70000 </li></ul><ul><li>Goodwill = capitalisation – capital employed </li></ul><ul><li>=100000-70000= 30000answer. </li></ul>
  15. 15. Lata, Khushboo and Anju are partners sharing profits in the ratio 3:2:1, they decide to change profit sharing ratio to 1:2:3. Who is gaining, and what is her gaining ratio? <ul><li>Anju is gaining. </li></ul><ul><li>Gaining ratio = New ratio-old ratio </li></ul><ul><li>Her previous ratio was 1/6. </li></ul><ul><li>New ratio is 3/6 </li></ul><ul><li>3/6-1/6 = 2/6 or 1/3 (gaining ratio) </li></ul><ul><li>Lata is sacrifcing. Her sacrificing ratio is (1/6 – 3/6 ) = -1/3. </li></ul>
  16. 16. My profits for Last three years are 20000, 50000, and 1 Lakh. What is the difference if instead of normal profit, I go for weighted average profit? <ul><li>My normal profit is (20000+50000+100000)/3 = 56666 </li></ul><ul><li>My weighted average profit is : </li></ul><ul><li>(20000*1+50000*2+100000*3)/6 </li></ul><ul><li>=70000 </li></ul><ul><li>Thus the difference is Rs. 13334. ans. </li></ul>
  17. 17. On joining the firm Nidhi gave a goodwill of Rs. 5000 only to Jayati. Their new profit sharing ratio is equal (Nidhi, Jayati and Sapna). The goodwill of the firm is 15000. What was their earlier profit sharing ratio? <ul><li>Profit sharint ratios are : 1:1:1 </li></ul><ul><li>Sapna has not sacrificed, so her profit sharing ratio was earlier also 1/3, thus Jayati had a profit sharing ratio of 2/3. </li></ul><ul><li>Thus their profit sharing ratio was 2:1 answer. </li></ul>
  18. 18. Goutam, Dhawal and Prateek are partners sharing profit equally. They take Ajay also. Goutam gives Ajay profit guarantee of 1 Lakh. They will now also share profits equally. Total profit is 2 Lakh, what is share of Ajay and Goutam? <ul><li>Ajay will get Rs. 1 Lakh. Goutam will have -50000 as his share of profit (he has to pay from his pocked the deficit of Rs. 50000). Ans. </li></ul>
  19. 19. You have admitted a new partner. You have revalued all assets and goodwill. Balance sheet will show what ? <ul><li>Balance Sheet will show revalued assets and liabilities. Goodwill will not be shown, it will be transferred to partners’ capital accounts. </li></ul>
  20. 20. ABOUT AFTERSCHOOOL <ul><li>Afterschoool conducts three year integrated PGPSE (after class 12 th along with IAS / CA / CS ) and 18 month PGPSE (Post Graduate Programme in Social Entrepreneurship) along with preparation for CS / CFP / CFA /CMA / FRM . This course is also available online also. It also conducts workshops on social entrepreneurship in schools and colleges all over India – start social entrepreneurship club in your institution today with the help from afterschoool and help us in developing society. </li></ul>
  21. 21. Why such a programme? <ul><li>To promote people to take up entrepreneurship and help develop the society </li></ul><ul><li>To enable people to take up franchising and other such options to start a business / social development project </li></ul><ul><li>To enable people to take up social development as their mission </li></ul><ul><li>To enable people to promote spirituality and positive thinking in the world </li></ul>
  22. 22. Who are our supporters? <ul><li>Afterschoolians, our past beneficiaries, entrepreneurs and social entrepreneurs are supporting us. </li></ul><ul><li>You can also support us – not necessarily by money – but by being promotor of our concept and our ideas. </li></ul>
  23. 23. About AFTERSCHOOOL PGPSE – the best programme for developing great entrepreneurs <ul><li>Most flexible, adaptive but rigorous programme </li></ul><ul><li>Available in distance learning mode </li></ul><ul><li>Case study focused- latest cases </li></ul><ul><li>Industry oriented practical curriculum </li></ul><ul><li>Designed to make you entrepreneurs – not just an employee </li></ul><ul><li>Option to take up part time job – so earn while you learn </li></ul><ul><li>The only absolutely free course on internet </li></ul>
  24. 24. Workshops from AFTERSCHOOOL <ul><li>IIF, Delhi </li></ul><ul><li>CIPS, Jaipur </li></ul><ul><li>ICSI Hyderabad Branch </li></ul><ul><li>Gyan Vihar, Jaipur </li></ul><ul><li>Apex Institute of Management, Jaipur </li></ul><ul><li>Aravali Institute of Management, Jodhpur </li></ul><ul><li>Xavier Institute of Management, Bhubaneshwar </li></ul><ul><li>Pacific Institute, Udaipur </li></ul><ul><li>Engineering College, Hyderabad </li></ul>
  25. 25. Flexible Specialisations: <ul><li>Spiritualising business and society </li></ul><ul><li>Rural development and transformation </li></ul><ul><li>HRD and Education, Social Development </li></ul><ul><li>NGO and voluntary work </li></ul><ul><li>Investment analysis,microfinance and inclusion </li></ul><ul><li>Retail sector, BPO, KPO </li></ul><ul><li>Accounting & Information system (with CA / CS /CMA) </li></ul><ul><li>Hospital management and Health care </li></ul><ul><li>Hospitality sector and culture and heritage </li></ul><ul><li>Other sectors of high growth, high technology and social relevance </li></ul>
  26. 26. Salient features: <ul><li>The only programme of its kind (in the whole world) </li></ul><ul><li>No publicity and low profile course </li></ul><ul><li>For those who want to achieve success in life – not just a degree </li></ul><ul><li>Indepth knowledge and expertise </li></ul><ul><li>Professional approac: World class approach </li></ul><ul><li>Strong intellectual and business capabilities </li></ul><ul><li>Flexible – you may stay for a month and continue the rest of the education by distance mode. / you may attend weekend classes </li></ul><ul><li>Scholarships for those from poor economic background </li></ul><ul><li>Latest and constantly changing curriculum – keeping pace with the time </li></ul><ul><li>Placement for those who are interested </li></ul><ul><li>Admissions open throughout the year </li></ul><ul><li>Latest and most advanced technologies, books and study material </li></ul>
  27. 27. Components <ul><li>Pedagogy curriculum and approach based on IIM Ahmedabad and ISB Hyderabad (the founder is alumnus from IIMA & ISB Hyderabad) </li></ul><ul><li>Meditation, spiritualisation, and self development </li></ul><ul><li>Essential softwares for business </li></ul><ul><li>Business plan, Research projects </li></ul><ul><li>Participation in conferences / seminars </li></ul><ul><li>Workshops on leadership, team building etc. </li></ul><ul><li>Written submissions of research projects/articles / papers </li></ul><ul><li>Interview of entrepreneurs, writing biographies of entrepreneurs </li></ul><ul><li>Editing of journals / newsletters </li></ul><ul><li>Consultancy / research projects </li></ul><ul><li>Assignments, communication skill workshops </li></ul><ul><li>Participation in conferences and seminars </li></ul><ul><li>Group discussions, mock interviews, self development diaryng </li></ul><ul><li>Mind Power Training & writing workshop (by Dr. T.K.Jain) </li></ul>
  28. 28. Pedagogy <ul><li>Case analysis, </li></ul><ul><li>Articles from Harvard Business Review </li></ul><ul><li>Quiz, seminars, workshops, games, </li></ul><ul><li>Visits to entrepreneurs and industrial visits </li></ul><ul><li>Presentations, Latest audio-visuals </li></ul><ul><li>Group discussions and group projects </li></ul><ul><li>Periodic self assessment </li></ul><ul><li>Mentoring and counselling </li></ul><ul><li>Study exchange programme (with institutions out of India) </li></ul><ul><li>Rural development / Social welfare projects </li></ul>
  29. 29. Branches <ul><li>AFTERSCHOOOL will shortly open its branches in important cities in India including Delhi, Kota, Mumbai, Gurgaon and other important cities. Afterschooolians will be responsible for managing and developing these branches – and for promoting social entrepreneurs. </li></ul>
  30. 30. Case Studies <ul><li>We want to write case studies on social entrepreneurs, first generation entrepreneurs, ethical entrepreneurs. Please help us in this process. Help us to be in touch with entrepreneurs, so that we may develop entrepreneurs. </li></ul>
  31. 31. Basic values at afterschoool <ul><li>Share to learn more </li></ul><ul><li>Interact to develop yourself </li></ul><ul><li>Fear is your worst enemy </li></ul><ul><li>Make mistakes to learn </li></ul><ul><li>Study & discuss in a group </li></ul><ul><li>Criticism is the healthy route to mutual support and help </li></ul><ul><li>Ask fundamental questions : why, when, how & where? </li></ul><ul><li>Embrace change – and compete with yourself only </li></ul>
  32. 32. social entrepreneurship for better society