case 1 final
TRANSCRIPT
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8/8/2019 CASE 1 Final
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Group 3:
AliaKalpesh
NiranjanRitika
Subhag
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ABOUTy Lee Nicholas has b een th e pri ncipal stak ehold er of
World.Com Adv ertisi ng .
y This compa ny has b een prop ering since th e last 10 years.
y How e v er, Lee Nicholas had d ecided h e now wa n ts tosell th e busi ne ss.
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Particulars Debit CreditCash 9,700 A/R 14,100 Prepaid Expenses 2,600 Building 2,21,300 Accumulated Depreciation 68,600
A/P 13,000 Salary PayableUnearned Service Revenue 56,700 Common Stock 50,000 Retained Earnings 60,400 Dividends 9,000
Service Revenue 12,300 Rent ExpenseSalary Expense 3,400 Utilities Expense 900 Depreciation ExpenseSupplies Expense
2,61,000 2,61,000
World.com Advertising Inc.Trial Balance
As On January 31, 2012
Particulars Debit CreditCash 9,700 A/R 14,100 Prepaid Expenses 2,600 Building 2,21,300 Accumulated Depreciation 68,600
A/P 13,000 Salary PayableUnearned Service Revenue 56,700 Common Stock 50,000 Retained Earnings 60,400 Dividends 9,000
Service Revenue 12,300 Rent ExpenseSalary Expense 3,400 Utilities Expense 900 Depreciation ExpenseSupplies Expense
2,61,000 2,61,000
World.com Advertising Inc.Trial Balance
As On January 31, 2012
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TRIAL BALANCE DID NOT INCLUDE
M on thl y re v en ue of $3,800 :
Date Particulars Debit Credit
Cash 3,800
Revenue 3,800
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M on thl y expen ses of $1,100
Date Parti c ars Debit Credit
Expen se s 1,100
Ca s 1,100
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LEDG
ERS
CASH A/C :
D e r icul r Amt( De i t) D te r t icul r Amt(C re i t)
Op ening l nce 9,700 Ex pen e 1,100
Revenue 3,800
13,500 Tota l 13,500
balance
12,400
Tota l
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EXPEN SE A/C:
Dat e a rt icul a r Amt( De i t) Dat e a rt icul a r Amt(C re i t)
Op ening a lance 0
Ex pen e 1,100
Tota l 1,100 tota l 1,100
balance 1,100
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R EVENUE A/C:
Dat e art icular Amt( De i t) Dat e art icular Amt(C re i t)
Opening a lance 12,300
revenue 3, 00
Tota l 16,100 tota l 16,100
balance 16,100
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Particulars Debit CreditCash 12,400A/R 14 ,100Prep aid pen s es 2 , 00Bu ildi ng 2 ,2 1, 00Accumu lat ed eprec iatio n 68,600
A/P 13 ,000Sala ry Pa yabl eUne a rned Serv ice Revenue 56 , 00Co mm o n Sto ck 50 ,000Re tai ned a rn ings 60,400Divid ends 9 ,000
Serv ice Revenue 16 ,100Ren t pens eSala ry pens e 3,400Utiliti es pen s e 9 00Deprec iatio n pens eExpen s e
2, 4,8 2, 4,8
rld .com dvertising nc .rial alance
As n anuary , 2012
1,1
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R evenuesServ ice 16 ,100Total R evenues 16 ,100
Exp enses
Sala ry Expen s e 3,400U tiliti es 9 00
S pp li es 1,100Total Exp enses 5 ,400
Net ncome/Loss 10 ,700
World .com Advertising nc .ncome Statement
Month E nded anuary 1, 2012
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Beginning
Balance 60,400
Add Net Inco me 10, 0071,100
Le ss D ivid ends -9 ,000
E nding R etained E arnings 62 ,100
orld .com d ertising nc .State m ent of R etained E arningsM onth E nded anuary 1, 2012
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E xpectatio n of Nicholas:Nicholas expects at l east th e amou n t of capital i n v ested b y
him which eq uals th e total amou n t of ow ne rs eq uit y .This amou n ts to 1,12,100
Our Willi ngne ss:The most w e thi nk World.com Adv ertisi ng Inc. shall go
for is 20 tim es th e mo n thl y ne t incom e.This amou n ts to 2,14,000
How e v er, Our sta nd in neg otiati ng would b e for th e amou n t of