CHANDRAGUPT INSTITUTE OF MANAGEMENT PATNA
By Group – 5
Rajeshwari Komal (60030)
Suruchi Agrawal (60041)
Surabhi Priya (60039)
Kumar Ankit (60018)
Kumar Devashish (60019)
Kumar Rohit (60021) Xytech Inc.
Submitted by Group-5
In this case, there is a company named Xytech Inc. which has been started by three partners named Able, Baker and Cabot. Their product designs were very successful and led to rapid growth of the company resulting in more need of capital to extend the growth and size of the company. In this case, major financing transactions entered into by the company for the first 10 years of its incorporation were taken into consideration.
Here,…show more content… The journal entries for this is,
Dec.31 Able, Capital a/c…dr 18,000 Baker, Capital a/c…dr 18,000 Cabot, Capital a/c…dr 18,000 To Income summary 54,000
General Ledger: Notes Payable 100,000
Able, Capital Baker, Capital Cabot, Capital 18,000 18,000 18,000 18,000 18,000 18,000
Bal 82,000 Bal 82,000 Bal 82,000
100,000 100,000 100,000 Now, in the year 2001 the firm had faced some liquidity problem for the short term due to shortage of cash. To deal with the problem, Cabot came forward and provided a loan of $