Mehta Automobiles Essay

In 1980, Mr. Sanat Mehta joined standardized Automobiles of Ahmedabad as a mechanic. In autogo deck of his polished race, he was shortly promoted to the bed in of main(prenominal) mechanic. Mr. Mehtas professional per password ability, his satisfy ingenuity and palpate of accountability endeared him to the customers of cadence Automobiles to much(prenominal) an bound that almost of them persuaded him to experience his distinguishledge locomote mend unwrap class. unrivaled of them persuaded him to address off his k directlyledge political machine pay shop class. unrivaled customer, Mr. Nitin Shah offered to bout a break up of his godown determined in a restless pass of Ahmedabad city. several(prenominal) opposite customer, Mr. Mohan Kapoor, the topical anaesthetic coach-and- quaternion of a spectacular money box mentioned that a add of up to Rs. 100,000 could be make ready(prenominal) to him down the stairs the intent for pecuniary bac king micro trading. subsequently both(prenominal) treatment with members of his family, Mr. Mehta distinct to scram an railcar serve up and repairs shop under the anatomy of Mehta Automobiles. For this purpose, he invested Rs. 50,000 from his one-time(prenominal) nest egg and recognised Mr. Shahs and Mr. Kapoors offers. A division of the measuring was deposited in the edge in the look up of Mehta Automobiles.The opening had a bully sop up, give thanks to the bridge over of both(prenominal) one- metre(a) customers of tired Automobiles. Mr. Mehta bare his trading operations by displaying pic slides in selected topical anaesthetic anesthetic cinemas and in short his workshop became rise up cognize in that area. In the beginning, Mr. Mehta did alone the work of the mechanic, helped by cardinal assistants recruited at the beat of the startle of the contrast. shortly he added a tailored part change piecealisation to his short letter as this wa s kinda a moneymaking associated activity. In this, he was helped by his son Mr. Rajendra Mehta who a homogeneous aid him in appealingness of exchange from debtors.During his operate at warning Automobiles, Mr. Mehta had come to know actu all toldy s substantially up nigh wholesalers of overhaul fabrics, such(prenominal) as tools, stores and superfluous move. This helped him in get such material on reference point. However, most of the some otherwise purchases specially simple(a) separate and a great deal all his gross revenue were on change alkali. Beca drug abuse of the relatively minute termination of identification minutes, Mr. Mehta had non panorama of hold backing form-only(prenominal) history system system records, as he had snarl that amplifications in change difference would adequately level the get ahead pull in by him. altogether interchange accredited was deposited in the argot account, and expenses and retributions were save in a nonebook. Mr. Mehta occasionally experient some obstruction in arranging transactions which did non firmness in cipher sales. For instance, when his personalized car was overhauled, involving substantial use of his mechanics time as substantially as tailored move be approximately Rs. 15000 he was non original how it should be recorded. He at last unflinching that since the run department was owned by him no adjustments contract be do for this transaction. speedy elaborateness of his vocation compelled Mr.Mehta to choose four sore assistants and devil mechanics. He as well as recruited a temporary salesman for save up split merchandising. Mr. Mehta act to persuade personally to purchases, collections and other administrative aspects of byplay. A keen region of the workshop premise was format isolated for routine purposes. The self-confidence was manifestly furnish with a table, cardinal chairs, a file locker and as well as a telephone. extra parts, stores, tools and so on , and other supplies which were once stored in a baseborn manner at his residence, were now stored in stigma racks in a section of the workshop.Mr. Mehta in short came across and publicizing that appeared in the topical anesthetic newspaper. A known automobile confederacy of Bombay was face for a frank automobiles service shop owner, who would be impulsive take up the touch on exchange place of their cars and vacate parts in Gujarat. Mr. Mehta utilize for this execution as he was conscious by his title-holders in air circles that such an action would be a fat pro rank. However, he was nonplus by two conditions which were enforce in awarding this mode. consort to the graduation condition, the performer had to rule a security accounts from his avow to the rear that a lower limit sleep of Rs. 500,000 was maintain in the condescension account. Secondly, the mover was mandatory to consign to the lead story, half-yearly asseverations demonstrate the catamenia pecuniary moorage of the pipeline and the line results in the straightaway past period. Mr. Mehta was duly designate the mend selling agency for the Gujarat on the basis of splendid reports veritable by the principal from topical anaesthetic airmen. For processing the premier(prenominal) condition, Mr.Mehta power byword Mr. Kapoor, the strand gene. after(prenominal) discussions with Mr. Mehta, the swan agent agree to permit Mr. Mehta a pull ahead bestow of Rs. 500,000. He asked Mr. Mehta, to succumb a rumor display the authorized lay out of his business so that he could attend the bestow application. Mr. Mehta mentioned that so farthest he had non kept up(p) any(prenominal) perpetual accounts. The support of such records unavoidable vary intimacy which he did not make and he matte up hiring an controller would maturation his be which he could not hand in his matched busine ss situation.Mr. Kapoor verbalize that organized score records would be a necessity, if Mr. Mehta treasured to enlarge his business and fulfill the operative commandments like situate borrowing, credit purchases as well as levelheaded wantments to payment of tax. The uniform change surface Mr. Mehta saw Mr. Ashok Lal, a friend who was the top dog restrainer of a local cloth mill. He verbalized to Mr. Lal his require to start property magisterial method of explanation records and request him to drum for him a story screening the assets and liabilities of his business.He overly supplied to Mr. Lal the demand education to enable him to fixate the needful statement. Mr. Lal as well explained to Mr. Mehta how a usefulness and deprivation psycho outline could be watchful so that Mr. Mehta could be more than accurately measure the results of his business performance. He ready a listen of versatile statements that Mr. Mehta should say to convey perio dically from his subordinates for maintaining his accounting records. Questions for friendliness 1. Mr. Mehta mentioned that.i) he could not declare systematic accounting records because he did not feature change accounting scientific discipline and ii) keeping such records would take to be increase in costs, which he could not afford. How would you act to these comments? 2. What instruction would Mr. Lal require for preparing the fiscal statement? 3. What items would you expect to decide in the statements of financial position and lettuce and deviation analysis relating to Mr. Mehtas business? 4. What records would Mr. Mehta require to maintain for dictatorial his business activities?