INSTRUCTOR :- Dr.

Ashish Mehta
 American Accounting Association Committee defines
Accounting as “The process of identifying, measuring and
communicating economic information to permit informed
judgement and decisions by users of the information”.

 In other words, Accounting is the systematic and

comprehensive recording of financial transactions pertaining
to a business.
 Prepared by :-

Abhishek Mishra
Achyut Joshi
Jayraj Khunti
Vishal Tulsiyani
Viral Parekh
 On 1st November 2009, Mr. & Mrs. Henry Antoine and Mrs.
Sandra Landers contributed $16,000 cash and agreed to share
profit on equal proportion.

 They signed a one year lease agreement to the Lone Pine Cafe.
The Monthly rent of the cafe was $1,500.

 They borrowed a loan of $21,000 from a local bank and they also
invested $35,000 of partnership funds to purchase equipments
amounting $53,200 and food & beverages amounting $2,800.

 They have paid $1,428 for local operating license(valid upto one
year). They also paid $1,400 for a new cash register.
 On 1st November, They have opened the restaurant in which Mr.
Antoine was the cook, Mrs. Antoine and Mrs. Landers waited for
customers.

 The Restaurant operated through out the winter season but was
not very successful.

 On 31st March,2010 , Mrs. Antoine discovered that Mr. Antoine

and Mrs. Landers had Disappeared. Mrs. Antoine concluded that
the partnership was dissolved.

 Mrs Antoine decided to continue operating the cafe. She realised

that accounting need to be done as of march 30 and for that she
called Donald Simpson, the Accountant.
 Mrs. Antoine founded that the cash register had contain $311
and checking account balance was $1,030.

 Ski Instructors were having their run up accounts amounting to

$870 , which were paid in full.

 The Lone Pine Cafe owed suppliers amount totalling $1,583.

 Depreciation on Assets were realised to $2,445.

 Food and Beverages on hand were estimated to be worth $2,430.

 The partnership had also repaid $2,100 of the bank loan.

 Accounting information is data about a business
entity’s transactions.

 Partners capital – $16,000 each

 Bank loan - $ 21,000
 Local operating licence - $ 1,428
 Purchased equipment - $ 53,200
 Food and Beverages -$ 2,800
 Cash Register - $ 1,400
 Rent of cafe -$ 1,500 per month
 Depreciation on Assets - $ 2,445
 Living Accommodation was available at cafe
 Mr. Antoine was the cook , Mrs. Antoine and
Mrs. Landers waited for the customers.
 Clothes of Mr. Antoine
 Donald Simpson (Accounting Help)
 Cafe was not running successfully.
 Assets Amt. ($) Liabilities Amt. ($)

Fixed Assets Owner’s Equity

Equipments 53,200 Mr. Antoine 16,000
Operating Licence 1,428 Mrs. Antoine 16,000
Mrs Landers 16,000
Current Assets
Food & Beverages 2,800 Bank Loan 21,000
Cash Register 1,400
Checking A/C 10,172

Total Assets 69,000 Total Liabilities 69,000

 Assets Amt. ($) Liabilities Amt. ($)

Fixed Assets Owner’s Equity

Equipment 50,755 Mr. Antoine 11,915
(53,200-2,445)
Operating Licence 833 Mrs. Antoine 11,915
(W.N -1)
Mrs. Landers 11,915
Current Assets
Cash Register 1,181 Bank Loan 18,900
(311+870) (21,000-2,100)
Checking A/C 1,030 Creditors 1,583
Food & Beverages 2,430

Total Assets 56,979 Total Liabilities 56,979

1,428 * 5/12 = 595
(Operating licence of 5 months valued $595 is over)

1,428 - 595 = 833

(Remaining balance of $833 will be transferred to Balance
sheet)
 If the partnership was dissolved on March 30,
2010, had the partners received their
proportional share of equity ? Why ?

 Answer : Yes, they would have received the

following mentioned amount in equal
proportion
 Assets were valued as (Assumed) :-
Equipment $ 50,000
Operating Licence $ 833
Cash Register $ 1,181
Checking Account $ 1,030
Food & Beverages $ 2,000

 Liabilities / Expenses

Bank Loan $ 18,900

Creditors $ 1,500
Dissolution expense $ 5,000

 After deducting Liabilities & Expenses from Assets :

Amount to be shared amongst 3 partners equally : $ 29,644

 Mrs. Antonie can also work as an individual owner for the future and can
hire the new staff to manage the business efficiently on their own.

 In the recent time, the organisation is not very successful to attract more
revenue but in future if she does modifying & can make staff work
efficiently then this entity can turn into profitive organisation also.
Thank You