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Priya and Anuradhn. school time friends, met at the school reunion. Priya had become a fashion designer and
had worked for a few years With a leading fashion designer Anuradha, after completing her MBA in marketing,
had work with a leading retail store, At the meeting they had a brief G,izession about setting up their own garments
store for teens and agreed to meet later and discuss the business prtvspccts. /
They met again sometime in January, 2014 and discussions decided to set up Parments store
exclusively for teenagers With a high disposable income and Who 10110"' latest fashion trends. They decided
to open first store in 15th April. 2014.
They decided to prod!tee sell clothes which were not expensive as it will give the customer Value for money
and, in the process their increase due to which the profit will also rise. They decided to open their
flagship Store on Park Street, Kolkata. The name decided was fresh fashions.
They discussed and finalized the business plan, Capa•a.' Fequirement and sources, etc. Priya was to design the
which was to be outsourced. Anuradha, besides
clothes and source the material besides identifying tailoring source,
looking after marketing, was to identify and rent a suitable place for the renovate it and take care of the legal
aspects. It was agreed that each Will initially contribute Rs, 5-00.000 towards capita;.
Anuradha employed Mr. Sengupta, an experience accountant, and requested him to draw ik partnership deed
and get the firm registered under the applicable laws. She gave him the term of partnership agreed bew-cen her and
Anuradha located a shop measuring 800 square feet finalized the rent entered into an agreement it was agreed
that rent for the shop will be Rs_ 15000 per month staning from 1st April, 2014, and in between period Will be
utilised for furnishing the shop. A security deposit equal to 6 months rent was to be given, which Anuradha paid
from her savings account. it was to be adjusted against her capital Contribution also, she paid security deposits of
Rs. 5000 Rs 2000 towards electricity and telephone respectively.
A bank account was opened with the State Bank of India in the name or fresh fashions in which they deposited
cheques Rs 5 lakh each. Anuradha was issued a cheque for the security deposits for rent, electricity and telephone
gisen by her shop renovation expense was Rs 350000 which was paid. A website was set up to attract male orders.
website designing and hosting expense came to Rs_ 100000. rent for website space was Rs. 20000 payable from 1st
April 2015 a computer and printer was purchased for Rs. 50000.
The firm took a term loan of Rs_ 10 lakhs from the repayable in 20 equal quarterly Installments. first
installment was to be paid on 30th June 2014, the bank granted the loan bearing interest @ 12% per annum. Loan
repayment and interest on the loan was as follows:-
June 30, 2014
se tember 30, 2014
December 31, 2014
Princi I (Rs_
It was decided that all the payment shall be made by cheques and also cash sale shall be deposited in the bank next
morning, at the end of the year, their transaction besides the above were as follows:-
Sales (credit sales being Rs.
Putvhased ( credit purchases being Rs.
Job work charges
Courier and postage
Travelling and conveyance
Repairs and maintenance
firm received bills of excbange of Rs. from the debtors during the year out of