Ram and Rajesh were passionate nature lovers during their college days. After working in an MNC for five years, they started a business on 01 Jan 2021 with a capital of 600,000/-. They borrowed loan of 50,000 from HDFC at an interest rate of 11% pa. The business focused on services related to trekking and mountaineering. They registered their business at a cost of 4500/-. They got an office space at a rent of 6000 per month, payable at the beginning of each month. They had to give a rent deposit of Rs. 60,000 to get this office space. They appointed a part time front office staff for 8000 per month payable at the end of the month. They purchased two desktops and furniture at a total cost of 2,00,000/-.During the first year of operations they could generate a revenue of 3,00,000 out of which 50,000 is yet to be collected from their clients. They paid rent for all 12 months. They also paid 20,000 for advertisement. They paid other operating expenses of 30,000.

Compute the following for their first year of operation: Ignore depreciation and taxes.

Total revenue, list of expenses, total expenses, Profit made during the year

Compute the value of the following at the end of the year:

Value of each assets, value of each liabilities, cash balance, total assets, total liabilities, total equity.

Also comment on their financial performance.

Answer rating: 100% (QA)

Total Revenue The total revenue generated during the first year is 300000 INR List of Expenses a Rent 6000 INRmonth 12 months 72000 INR b Office space ... View the full answer