WellStore Enterprise was incorporated by three friends, Vardhman, Gautam, and Aseemon 1 April 2011. To commence the activities, each friend introduced Rs.20,000 in cash. In addition, WellStore borrowed Rs.40,000 from the Maharashtra Cooperative Bank, giving a three-year payable date note. The note was dated 1 April 2011, and indicated an interest payable half yearly at the rate of 8% per annum. As the necessary funds were available, Vardhman made arrangements for a place of work. The shop premise was taken on a rent of Rs. 2,000 per month. As on 31 March 2012, the net profit of the firm was determined to be Rs. 20,000 after providing for rent and all other administrative and selling expenses and one payment of interest. Each friend even withdrew Rs. 4,000 in cash to meet their day-to-day expenses. Question a. What were the different sources of cash and amounts to start WellStore Enterprise? Question b. Prepare a capital account of each friend individually, and in total for the firm as a whole, as on 31 March 2012.
WellStore Enterprise was incorporated by three friends, Vardhman, Gautam, and Aseemon
1 April 2011. To commence the activities, each friend introduced Rs.20,000 in cash. In addition,
WellStore borrowed Rs.40,000 from the Maharashtra Cooperative Bank, giving a three-year
payable date note. The note was dated 1 April 2011, and indicated an interest payable half yearly
at the rate of 8% per annum.
As the necessary funds were available, Vardhman made arrangements for a place of work. The
shop premise was taken on a rent of Rs. 2,000 per month.
As on 31 March 2012, the net profit of the firm was determined to be Rs. 20,000 after providing
for rent and all other administrative and selling expenses and one payment of interest. Each friend
even withdrew Rs. 4,000 in cash to meet their day-to-day expenses.
Question a. What were the different sources of cash and amounts to start WellStore
Enterprise?
Question b. Prepare a capital account of each friend individually, and in total for the firm as a whole, as on 31 March 2012.
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