Answer: Mitali Mehta & Associates

ASSETS:
Fixed Assets:
Equipment/software (net) 3,65,000
(2,70,000 + 1,10,000-15000)
Current Assets
Cash 66,000
Rent Deposit 60,000

Office supplies 42,000

(50000+9000-17000)
Accounts receivable 70,000 238000
6,03,000
LIABILITIES

Mitali’s equity 3,00,000

Retained earnings 46,000
Loan 2,00,000
current liabilities
Accounts payable 55,000
Interest payable 2,000
6,03,000

Mitali Mehta & Associates Statement of Income February 2 - March 31, 2012

Revenue (4,00,000+70,000) 4,70,000

Office supplies expense (9000+50000-42000) 17,000
Rent (February, March 2012) 60,000
Salaries 3,30,000
Interest expense 2,000
Depreciation (2,70,000/ 3=90,000 p.a.= 7500 p.m) 15,000
Net Income 46,000

1
Working note:

Cash Statement
Cash &Bank Receipts:
Equity capital 3,00,000
+Father’s loan 2,00,000
+Recd. from clients 4,00,000 9,00,000
Less: Cash & bank payments:
Rent Deposit 60,000
Rent for Feb. & March 60,000
Equipment & SW from last employer 2,70,000
Office supply 50,000
Additional office supply 9,000
Salary & other exp 3,30,000
Additional Purchase of Equip. 55,000 8,34,000
Closing Balance 66,000

Cash Flow Statement

Net Profit 46,000
+Depreciation 15,000
Cash flow from operating activity before 61,000
changes in working capital
Increase in Accounts receivable -70,000
Increase in Office Supplies -42,000
Increase in Accounts Payable 55,000
Increase in Interest Payable 2,000
Cash flow from operating activity 6,000
Purchase of Equipment and software -3,80,000
Rent Deposit -60,000
Cash flow from Investing activity -4,40,000
Equity capital 3,00,000
Father’s loan 2,00,000
Cash flow from Financing activity 5,00,000
A+B+C 66,000
+ Opening Cash and Cash Equivalents 0
= Closing Cash and Cash Equivalents 66,000