DANCING freakzzzzzzzz

Mr. Malhotra had a son who did not get very good marks in his board
exams in 2003. He could not get admission into any college. He also did
not urge to study further. He was a good dancer and had been learning
different form of dances from an institute of Shamak Davar located
very far from his house form past 5 years. Mr. Malhotra was worried
about the future if his son. One day he asked his son as to what he
wanted to do? Rahul was the only son of his father. Rahul told his dad
frankly that he wants to be in business and that too a business that he is
interested in & which he can expand in future if he wanted to. His
father was very much aware of his talent as he had been attending his
shows with the whole crew of Shamak Davar from past 5 years. After
talking to his son in detail, MR. Malhotra was convinced about the
capability of his son to run a business like this & according to him it was
a good idea as there wasn’t any such institute within the range of 5 km
from there locality.

Mr. Malhotra had many houses in the city. He sold one his houses for
Rs. 5, 00,000. They started to search hall in a locality where there are
more schools, colleges, tuitions centers basically where there were more
of youth. Ultimately they found one, but the landlord asked for security
deposit of Rs. 60000 and a monthly rent of Rs 1500. Mr. Malhotra gave
Rs. 3, 00,000 as grant and Rs. 2, 00,000 as loan to his son. The
agreement was signed with the landlord on the 15th of June 2002. The
security deposit was paid and the possession was taken. It was agreed
that the rent will be paid on the 7th of each month starting from the
month of July, 2003. He got the hall furnished for Rs. 25,000 and
electric fittings costing Rs. 15,000 were also installed. He also got a
telephone installed, paying a security deposit of Rs. 5000 to M.T.N.L. He
got the electricity connection paying another security of Rs. 3,000. The
hall was ready by 29th of June 2003. He purchased goods (cds, cassettes,
albums etc) worth Rs. 50,000 cash and for Rs. 15,000 on credit. The hall
was opened for business on 1st of July and a bank account was opened
with Punjab national bank depositing Rs. 70,000. The shop was
registered in the name of ‘Dancing freaks’. He also bought a music
system for Rs. 90000 with additional speakers and woofers on the very
1st day. He made all the fees on cash basis and purchased cds, cassettes
etc both on cash and credit basis. The payment for purchases and to the
creditors was through cheques. The entire fees earned through students
were deposited into the bank the next day, after retaining some money
for petty expenses. The business picked up in 3 months time. By the
September 2003 he was well established. Then he employed an
instructor at a monthly salary of Rs. 3000. He also decided to withdraw
Rs. 4000 for his personal use every month and also to pay back the loan
of his father. He paid back Rs. 60000 in the month of December, 2003
and then another Rs. 40000 in the month of March, 2004. All drawings
were by cheque. The payment of petty expenses was made in cash while
the other expenses were paid by cheque. He also used some of the
stationary Rs. 350 for maintaining accounting record.

CASH DEPOSITED IN THE 12,15,000

PUNJAB NATIONAL
BANK
6,20,000
CASH PURCHASES
DURING THE YEAR
3,40,000
CHEQUES PAID TO THE
SUPPLIERS OF GOODS
42,500
PETTY CASH EXPENCES
INCURRED DURING THE
PERIOD
15,000
SALARY TO INSTRUCTER
BY CHEQUE FOR 5
MONTHS 20,200

ELECTRICITY BILLS 15,300

PAID
1,00,000
TELEPHONE BILLS PAID
12,000
MAT PAID TO FATHER

RENT PAID DURING 8

MONTHS
THE CLOSING BALANCES OF VARIOUS ACCOUNTS WERE AS
FOLLOWS

CASH IN HAND 25,200

ELECTRICITY BILLS OUTSTANDING 1,400
AMOUNT DUE TO CREDITORS 92,800

FURNITURE AND FITTINGS ARE TO BE DEPRICIATED AT 10%

P.A THE ESTIMATE USEFUL LIFE OF THE MUZIC SYSTEM IN
10 YEARS AND ITS SCRAP VALUE IS 10% OF THE COST.