kim fuller ppt
TRANSCRIPT
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05/01/2305/01/23 11:56 AM11:56 AM GHPIBM (Dept. of MBA), SPUGHPIBM (Dept. of MBA), SPU 11
Good After-noon!!!!Good After-noon!!!!Welcome to the Session !!!!Welcome to the Session !!!!
Thank you for switching off your mobile phone.Thank you for switching off your mobile phone.
As presentation contains some auto scroll slides, As presentation contains some auto scroll slides, Please pay complete attention to the session to Please pay complete attention to the session to
avoid unnecessary repetition.avoid unnecessary repetition.
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05/01/2305/01/23 11:56 AM11:56 AM GHPIBM (Dept. of MBA), SPUGHPIBM (Dept. of MBA), SPU 22
Kim FullerKim FullerA Case Study in Managerial AccountingA Case Study in Managerial Accounting
Get Set And…..
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05/01/2305/01/23 11:56 AM11:56 AM GHPIBM (Dept. of MBA), SPUGHPIBM (Dept. of MBA), SPU 33
Prepared ByPrepared By
Nirav PatelNirav PatelDhaval DaveDhaval DaveMehul RathodMehul RathodNeeta PithiyaNeeta PithiyaPooja ShekhawatPooja ShekhawatRajendra ThakareRajendra ThakareRajul PatelRajul Patel
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05/01/2305/01/23 11:56 AM11:56 AM GHPIBM (Dept. of MBA), SPUGHPIBM (Dept. of MBA), SPU 44
INTRODUCTIONINTRODUCTION-By Nirav Patel-By Nirav Patel
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05/01/2305/01/23 11:56 AM11:56 AM GHPIBM (Dept. of MBA), SPUGHPIBM (Dept. of MBA), SPU 55
Kim Fuller, who was working in a large Kim Fuller, who was working in a large chemical firm as a District Sales Engineer.chemical firm as a District Sales Engineer.
He learned that company had developed a He learned that company had developed a use for the recycled material in pulverized use for the recycled material in pulverized form.form.
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05/01/2305/01/23 11:56 AM11:56 AM GHPIBM (Dept. of MBA), SPUGHPIBM (Dept. of MBA), SPU 66
In November 2006, he checked for initial In November 2006, he checked for initial cost of the business. cost of the business.
For that he bought a truck, three trailers, For that he bought a truck, three trailers, two grinding machine & supplies and parts two grinding machine & supplies and parts to run and maintain the business. to run and maintain the business.
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05/01/2305/01/23 11:56 AM11:56 AM GHPIBM (Dept. of MBA), SPUGHPIBM (Dept. of MBA), SPU 77
He also purchased a computer, a He also purchased a computer, a warehouse, accounting software. warehouse, accounting software.
He also invested his savings of $75,000. He also invested his savings of $75,000.
He borrowed $90,000 from his two sisters He borrowed $90,000 from his two sisters and a brother for down payment of and a brother for down payment of $50,000 for warehouse.$50,000 for warehouse.
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05/01/2305/01/23 11:56 AM11:56 AM GHPIBM (Dept. of MBA), SPUGHPIBM (Dept. of MBA), SPU 88
He also hired a truck driver and grinding He also hired a truck driver and grinding machine workers. machine workers.
He took help of his neighbour for learning He took help of his neighbour for learning & purchasing of accounting software.& purchasing of accounting software.
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05/01/2305/01/23 11:56 AM11:56 AM GHPIBM (Dept. of MBA), SPUGHPIBM (Dept. of MBA), SPU 99
He obtained enough knowledge for He obtained enough knowledge for recording transactions from his neighbour. recording transactions from his neighbour.
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05/01/2305/01/23 11:56 AM11:56 AM GHPIBM (Dept. of MBA), SPUGHPIBM (Dept. of MBA), SPU 1010
ACCOUNTING & NON-ACCOUNTING & NON-ACCOUNTING INFORMATIONACCOUNTING INFORMATION
-By Dhaval Dave-By Dhaval Dave
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05/01/2305/01/23 11:56 AM11:56 AM GHPIBM (Dept. of MBA), SPUGHPIBM (Dept. of MBA), SPU 1111
In this case there are the following classification are available on the In this case there are the following classification are available on the basis of accounting and non-accounting information:basis of accounting and non-accounting information:
Accounting InformationAccounting Information::Owned capital was of $75,000 from his Owned capital was of $75,000 from his savings.savings.
Acquired used truck and 3 trailers, Acquired used truck and 3 trailers, grinding machine, machine part, grinding machine, machine part, personal computer for total of $65,000.personal computer for total of $65,000.
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05/01/2305/01/23 11:56 AM11:56 AM GHPIBM (Dept. of MBA), SPUGHPIBM (Dept. of MBA), SPU 1212
Borrowed $90,000 from two sisters and Borrowed $90,000 from two sisters and brother for down payment of building. brother for down payment of building.
Warehouse of $162,000 and paid Warehouse of $162,000 and paid $50,000 as its down payment.$50,000 as its down payment.
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05/01/2305/01/23 11:56 AM11:56 AM GHPIBM (Dept. of MBA), SPUGHPIBM (Dept. of MBA), SPU 1313
Non-Accounting InformationNon-Accounting Information::Fuller think to start a business of plastic Fuller think to start a business of plastic bottles.bottles.
In Nov 2006, he started to find out the In Nov 2006, he started to find out the cost involved in setting up the business.cost involved in setting up the business.
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05/01/2305/01/23 11:56 AM11:56 AM GHPIBM (Dept. of MBA), SPUGHPIBM (Dept. of MBA), SPU 1414
Found a warehouse.Found a warehouse.
Approval of mortgage from bank for Approval of mortgage from bank for balance of building.balance of building.
Learnt maintaining books of accounts for Learnt maintaining books of accounts for bank dealings, tax returns and general bank dealings, tax returns and general management of the company.management of the company.
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05/01/2305/01/23 11:56 AM11:56 AM GHPIBM (Dept. of MBA), SPUGHPIBM (Dept. of MBA), SPU 1515
List out the purchased items, debts and List out the purchased items, debts and other information in Accounting Software.other information in Accounting Software.
Fuller signed contract with two bottling Fuller signed contract with two bottling companies and started business by companies and started business by hiring grinding machine workers and a hiring grinding machine workers and a truck driver. truck driver.
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05/01/2305/01/23 11:56 AM11:56 AM GHPIBM (Dept. of MBA), SPUGHPIBM (Dept. of MBA), SPU 1616
OPENING OPENING BALANCE SHEETBALANCE SHEET
-By Neeta Pithiya-By Neeta Pithiya
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05/01/2305/01/23 11:56 AM11:56 AM GHPIBM (Dept. of MBA), SPUGHPIBM (Dept. of MBA), SPU 1717
Kim Fuller Ltd. Kim Fuller Ltd. Balance SheetBalance Sheet
as of 31as of 31stst December 2007 December 2007
Assets Amount Liabilities & O.E Amount
Current Assets: Owner's Equity 75,000
Cash/Bank 50,000 Current Liabilities:
Stock 2,000 Family Loan 90,000
Mortgage Loan (Against Ware house) 112,000
Non-Current Assets:
Fixed Assets 63,000
Ware House 162,000
Total 277,000 Total 277,000
Figures in $Figures in $
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05/01/2305/01/23 11:56 AM11:56 AM GHPIBM (Dept. of MBA), SPUGHPIBM (Dept. of MBA), SPU 1818
STRENGTHSSTRENGTHS-By Mehul Rathod-By Mehul Rathod
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05/01/2305/01/23 11:56 AM11:56 AM GHPIBM (Dept. of MBA), SPUGHPIBM (Dept. of MBA), SPU 1919
Excellent location for the business.Excellent location for the business.
Accounting assistance from a neighbour.Accounting assistance from a neighbour.
He researched the entire element before He researched the entire element before starting the business.starting the business.
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05/01/2305/01/23 11:56 AM11:56 AM GHPIBM (Dept. of MBA), SPUGHPIBM (Dept. of MBA), SPU 2020
Ready raw material was available which Ready raw material was available which were cheaper so, he can grab high profit were cheaper so, he can grab high profit due to low total cost.due to low total cost.
He managed to get the borrowed capital He managed to get the borrowed capital from his relatives on relaxable interest from his relatives on relaxable interest rates in comparison to bank interest rate.rates in comparison to bank interest rate.
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05/01/2305/01/23 11:56 AM11:56 AM GHPIBM (Dept. of MBA), SPUGHPIBM (Dept. of MBA), SPU 2121
WEAKNESSESWEAKNESSES-By Rajendra Thakare-By Rajendra Thakare
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05/01/2305/01/23 11:56 AM11:56 AM GHPIBM (Dept. of MBA), SPUGHPIBM (Dept. of MBA), SPU 2222
Because of heavy debt creditor would Because of heavy debt creditor would not like to give him loan.not like to give him loan.
Borrowed capital is more than the owned Borrowed capital is more than the owned capital which result into more interest capital which result into more interest payment.payment.
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05/01/2305/01/23 11:56 AM11:56 AM GHPIBM (Dept. of MBA), SPUGHPIBM (Dept. of MBA), SPU 2323
He invested a huge sum of amount into He invested a huge sum of amount into purchasing the warehouse, which results purchasing the warehouse, which results into less working capital.into less working capital.
He has taken big amount of mortgage He has taken big amount of mortgage loan which result into more interest loan which result into more interest payment. payment.
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05/01/2305/01/23 11:56 AM11:56 AM GHPIBM (Dept. of MBA), SPUGHPIBM (Dept. of MBA), SPU 2424
TRANSACTIONSTRANSACTIONS-By Pooja Shekhawat-By Pooja Shekhawat
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05/01/2305/01/23 11:56 AM11:56 AM GHPIBM (Dept. of MBA), SPUGHPIBM (Dept. of MBA), SPU 2525
Following Transactions were occurred Following Transactions were occurred during the year:during the year:
Purchased raw material worth $1,000.Purchased raw material worth $1,000.Carriage inward $50.Carriage inward $50.Paid wages to workers and truck driver Paid wages to workers and truck driver $1,000.$1,000.Depreciation on Fixed Assets @10%, Depreciation on Fixed Assets @10%, $6,300.$6,300.Purchased accounting software $100.Purchased accounting software $100.
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05/01/2305/01/23 11:56 AM11:56 AM GHPIBM (Dept. of MBA), SPUGHPIBM (Dept. of MBA), SPU 2626
Interest payable for mortgage loan @5%, Interest payable for mortgage loan @5%, $5,600.$5,600.Interest payable to the relatives for the Interest payable to the relatives for the borrowed loan @3%, $2,700.borrowed loan @3%, $2,700.Ware house building appreciated @10%, Ware house building appreciated @10%, $16,200.$16,200.Sales made worth $4,000 (cost price Sales made worth $4,000 (cost price $2,500).$2,500).Closing Stock at the end of year $500.Closing Stock at the end of year $500.
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05/01/2305/01/23 11:56 AM11:56 AM GHPIBM (Dept. of MBA), SPUGHPIBM (Dept. of MBA), SPU 2727
ANALYSIS STATEMENTANALYSIS STATEMENT-By Pooja Shekhawat-By Pooja Shekhawat
OpeningOpening ........
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05/01/2305/01/23 11:56 AM11:56 AM GHPIBM (Dept. of MBA), SPUGHPIBM (Dept. of MBA), SPU 2828
INCOME STATEMENTINCOME STATEMENT-By Rajul Patel-By Rajul Patel
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05/01/2305/01/23 11:56 AM11:56 AM GHPIBM (Dept. of MBA), SPUGHPIBM (Dept. of MBA), SPU 2929
Receipt Amount
Sales Revenue 4000
Appreciation on Building 16200
(a) Total (a) Total 20200Expenses Amount
Wage Paid 1000
Depreciation on Fixed Assets 6300
Interest on Mortgage Loan 5600
Interest on Relative's loan 2700
Carriage Inward 50
(b) Total (b) Total 15650
Net Income (a-b) 4550
Figures in $Figures in $Income Statement for the year ended 2007-08Income Statement for the year ended 2007-08
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05/01/2305/01/23 11:56 AM11:56 AM GHPIBM (Dept. of MBA), SPUGHPIBM (Dept. of MBA), SPU 3030
CLOSING CLOSING BALANCE SHEETBALANCE SHEET
-By Rajul Patel-By Rajul Patel
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05/01/2305/01/23 11:56 AM11:56 AM GHPIBM (Dept. of MBA), SPUGHPIBM (Dept. of MBA), SPU 3131
Kim Fuller Ltd. Kim Fuller Ltd. Balance SheetBalance Sheet
as of 31as of 31stst December 2007 December 2007
Assets AmountLiabilities &
O.E AmountCurrent Assets:Closing Stock 500 Owner's Equity 77050Cash/Bank 51850 Other Liabilities 210300Non-Current Assets:Fixed Assets 63000(-) Depreciation 6300 56700Warehouse 162000(+) Appreciation 16200 178200Accounting Software 100Total 287350 287350
Figures in $Figures in $
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05/01/2305/01/23 11:56 AM11:56 AM GHPIBM (Dept. of MBA), SPUGHPIBM (Dept. of MBA), SPU 3232
SUGGESTIONSSUGGESTIONS-By Nirav Patel-By Nirav Patel
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05/01/2305/01/23 11:56 AM11:56 AM GHPIBM (Dept. of MBA), SPUGHPIBM (Dept. of MBA), SPU 3333
Though Kim Fuller showed some quick decision making Though Kim Fuller showed some quick decision making skill by starting the business at right time, but also skill by starting the business at right time, but also showed immaturity by purchasing warehouse building at showed immaturity by purchasing warehouse building at such an early statesuch an early state
Suppose, if he had taken warehouse on rent for a period Suppose, if he had taken warehouse on rent for a period of 20 years & cost price is $162,000. Then he had to pay of 20 years & cost price is $162,000. Then he had to pay $8100$8100** every year which provides him more working every year which provides him more working capital for day to day operations.capital for day to day operations.
* Rent = * Rent = Property AmountProperty Amount = = $162,000$162,000 = $8100 Per Year. = $8100 Per Year.Time PeriodTime Period 20 20
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05/01/2305/01/23 11:56 AM11:56 AM GHPIBM (Dept. of MBA), SPUGHPIBM (Dept. of MBA), SPU 3434
We are thankful to Mr. Ashish Mehta for his We are thankful to Mr. Ashish Mehta for his valuable suggestions and providing an valuable suggestions and providing an opportunity to prove ourselves .opportunity to prove ourselves .
- Team- Team
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05/01/2305/01/23 11:56 AM11:56 AM GHPIBM (Dept. of MBA), SPUGHPIBM (Dept. of MBA), SPU 3535
Thank you!!!!!Thank you!!!!!