Unit – 4
Final Accounts
FINAL ACCOUNTS OF A SOLE PROPRIETOR
Final Accounts is always the end of every financial year.
Final Accounts is prepared by all types of business organization.
Final Accounts is mainly prepared to find out profit or loss of the year.
Final Accounts include all the transactions of year but in total form.
What is given in the problem?
Trail Balance
Adjustments
What is to be prepared?
Trading Account
Profit & Loss Account
Balance Sheet
Trading Account for the year ended………………………
Dr. Cr.
To Opening Stock To Purchase XX Less: Purchase Return (XX) To Carriage Inward To Carriage Outward To Freight Inward To Octroi Duty To Custom Duty To Import Duty To Wages To Salary to Work Manger To Factory Rent, Rate and Taxes To Factory Insurance To Power & Fuel To Lighting & Heating To Coal & Coke To Oil Water & Gas Charges To Manufacturing Expense To Gross Profit c/d | XX
XX XX XX XX XX XX XX XX XX XX | By Sales XX Less: Sales Return (XX) By Goods Distributed Free Sample By Goods withdrawn by Proprietor By Goods Lost by Fire By Closing Stock |
XX
XX
XX XX XX |
| XXX |
| XXX |
Profit and Loss Account for the year ended…………
To Office Expenses To Salaries To Printing & Stationery To Postage & Telegram To Telephone Expenses To Sundry Expenses To General Expenses To Trade Expenses To Legal Charge To Bank Charge To Electricity Charges To Rent, Rate and Taxes To Audit Fees To Interest To Insurance To Advertisement To Commission To Discount Allowed To Carriage Outward To Travelling Expense To Packing Expenses To Bad Debts To Depreciation To Loss by Fire To Provided Fund Contribution To Unproductive Wages To Interest on Capital To Net Profit c/d | XX XX XX XX XX XX XX XX XX XX XX XX XX XX XX XX XX XX XX XX XX | By Gross Profit b/d By Rent Received By Commission Received By Discount Received By Dividend Received By Interest Received By Interest on Investment By Interest on Drawing By Bad Debt Recovery | XX XX XX XX XX XX XX XX XX |
| XXX |
| XXX |
Balance Sheet as on year ended…………………
Liabilities | Rs. | Assets | Rs. |
Capital XX Less: Drawing (XX) Add: Interest on Capital XX Less: Interest on Drawing (XX) Add/Less: NP/NL (XX) Sundry Creditors Bills Payable Bank Loans Bank Overdraft Outstanding Expenses Pre- Received Income Provided Fund Reserve |
XX XX XX XX XX XX XX XX XX | Goodwill Land & Building Plant & Machinery Furniture & Fixture Motor Vehicle Free Hold Premises Lease Hold Premises Office Equipment Patent Rights Trade Mark Loose Tools Investment Sundry Debtors Closing Stock Bill Receivable Prepaid Expenses Outstanding Expenses Advance to Work Provident Fund Investment Insurance Claim Cash in Hand/ Cash at Bank | XX XX XX XX XX XX XX XX XX XX XX XX XX XX XX XX XX XX XX XX XX |
| XXX |
| XXX |
Particulars | Journal Entries | Effects |
1.] Closing Stock | Closing Stock A/c Dr. To Trading Account | a.] Trading Account Cr. Side b.] Balance Sheet Assets Side |
2.] Depreciation on Assets | Depreciation A/c Dr. To Assets A/c | a.] Less From Assets Side b.] Profit & Loss A/c Dr. Side |
3.] Goods sold on credit but not recorded | Debtors A/c Dr. To Sales A/c | a.] Add to Debtors b.] Add to Sale |
4.] Goods purchase on credit but not recorded | Purchase A/c Dr. To Creditors A/c | a.] Add to Purchase b.] Add to Creditors |
5.] Goods distributed as free sample | Advertisement A/c Dr. To Trading A/c | a.] Profit & Loss A/c Dr. Side b.] Trading A/c Cr. Side |
6.] Goods withdraw by partners for personal use | Drawing A/c Dr. To Trading A/c | a.] Less From Capital b.] Trading A/c Cr. Side |
7.] Goods Loss by fire and Insurance company admitted claim | Insurance A/c Dr. Loss by Fire A/c Dr. To Trading A/c | a.] Balance Sheet Assets Side b.] Profit & Loss A/c Dr. Side c.] Trading A/c Cr. Side |
8.] Interest on Capital | Interest on Capital A/c Dr To Capital A/c | a.] Profit & Loss A/c Dr. Side b.] Add to Capital |
9.] Interest on Drawing | Drawing A/c Dr. To Interest on Capital | a.] Less from Capital b.] Profit & Loss Cr. Side |
10.]Outstanding Expenses | Expenses A/c Dr. To Outstanding Exp. | a.] Add to Expenses b.] Balance Sheet Liabilities Side |
11.] Prepaid Expenses | Prepaid Expense A/c Dr To Expenses A/c | a.] Balance Sheet Assets Side b.] Less from Expenses |
12.] Outstanding Income | Outstanding Income A/c Dr To Income A/c | a.] Balance Sheet Assets Side b.] Add to Income |
13.] Pre- received Income | Income A/c Dr. To Pre- Received Income | a.] Less from Insurance b.] Balance Sheet Liabilities Side |
Formula of Debtors
Particulars | Rs. | Rs. |
Debtors (Trail Balance) (+/-) Any other adjustment (-) Bad Debts | XX XX XX |
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(%) * | XXX |
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(-) R.D.D (Adjustment) | (XX) | XXX |
Profit & Loss Account
Particulars | Rs. | Rs. |
To Bad Debts (Trail Balance) (+) Bad Debts (Adjustment) (+) R.D.D (Adjustment) (-) R.D.D (Trial Balance) | XX |
XXX |
1.] Pass the journal entries of each & every adjustment. Except Bad Debts & R.D.D
2.] Put the dots on common items from Journal Entry & Trail Balance
3.] Finish the formula of Debtors
4.] Post each & every items of Trail Balance into Trading A/c and Profit & Loss and Balance Sheet. But while posting doted item posted in inner column and leave one line blanks.
5.] Effects of Journal Entries:
a.] Effect of doted items:
Role: Dr……………………………. Cr. = Add
Cr……………………………. Cr. = Add
Dr……………………………..Cr. = Less
b.] Effect of Ledger Item
Role: Same Account
Same Side
Opposite Side
c.] Effect of Remaining Item
Role: Dr = Asset Expenses
Cr = Liability Income
6.] Closing
RECTIFICATION OF ERRORS
When the trial balance tallies it provides us only with the proof of the arithmetical accuracy of the ledger accounts. However, there may still be some errors present. Some errors affect the trial balance while some do not. When the trial balance does not tally, it is a clear indication of the presence of errors. We need to identify and locate these errors. Thus, after locating them Rectification of Errors is also necessary.
On the basis of rectification of errors, we can classify the errors into the following two broad categories:
Errors not affecting the Trial Balance
Errors affecting the Trial Balance
The errors need to be categorized in these categories because we can usually rectify the errors not affecting the trial balance by passing a rectification journal entry. While the errors affecting the trial balance affect only one account and for these, we cannot pass a journal entry. However, we can pass a journal entry only by opening a Suspense A/c.
All the errors in accounts can be classified into two parts:
1. Errors of principle
2. Clerical errors
1. Errors of principle: When the amounting principle of capital and revenue is violated, it is called an error of principle. For e.g. A purchase of asset is considered as an expense or an expense is considered as an asset. The trial balance will tally in presence of this mistakes.
2. Clerical errors: These are the errors which are committed in ordinary accounting work and these can be further classified as:
a) Errors of omission: When a transaction is fully or partly omitted from the book it is called an error of omission.
b) Errors of commission: When an amount is posted in the wrong A/c or a wrong amount is posted or on wrong side of correct amount or there is totaling mistake or balancing mistake it is called error of commission.
Compensating errors: This is a set of two errors (mistakes) where one mistake automatically compensates another mistake. It is called compensating errors. The trial balance will tally in presence of such errors.
These errors affect two or more accounts simultaneously. Thus, these are two-sided errors. We can rectify these by passing a journal entry giving the correct debit and credit to the accounts. In order to rectify an error, we need to cancel the effect of wrong debit or credit by reversing it and restore the effect of correct debit or credit.
When there is short debit or excess credit in an account we need to debit the concerned account. Whereas, when there is short credit or excess debit in an account we need to credit the concerned account.
Complete omission to record an entry in the journal or the subsidiary books, incorrect recording of transactions in the books, complete omission of posting and errors of principle are the examples of these errors.
These errors affect only one account. Thus, these are one-sided errors. We can rectify these errors by giving an explanatory note in the account or by passing a journal entry with the help of Suspense A/c. When we detect an error before posting to the ledger, we can correct it by simply crossing the wrong amount, writing the correct amount above it and initializing it. Similarly, we can also correct an error in the ledger account.
Errors of casting, errors of carrying forward the balances, errors of balancing the accounts, errors of posting the wrong amount in the correct account, error of posting in the correct account on the wrong side, omitting to show an account in the trial balance, posting in wrong side with wrong amount are the examples of errors affecting the Trial Balance.
When the trial balance does not tally due to the one-sided errors in the books, an accountant puts the difference between the debit and credit side of the trial balance on the shorter side as the Suspense A/c. As and when we locate and rectify the errors, the balance in the Suspense A/c reduces and consequently becomes zero. Thus, we cannot categorize the Suspense A/c. It is a temporary account and can have debit or credit balance depending upon the situation.
While using the Suspense A/c to rectify the one-sided errors, the accountant needs to follow the following steps:
- Identification of the account with the error.
- Ascertainment of the excess debit or credit or short debit or credit in the above account.
- In case of short debit or excess credit in an account, we need to debit the concerned account. Whereas, in case of short credit or excess debit in an account we need to credit the concerned account.
- Pass the necessary journal entry by debiting or crediting the Suspense A/c.
MANUFACTURING ACCOUNTS
The term ‘Final Accounts’ is a broader term. The four following financial statements are prepared for the preparation of final accounts of a Manufacturing Proprietor:
- Manufacturing account: It shows the Cost of Goods Produced.
- Trading account: It shows gross profit/loss of the business.
- Profit & loss account: It shows the net profit/loss of the business.
- Balance sheet: It shows the financial position of the business.
Out of the above four statements, manufacturing account if prepared first, trading, profit & loss accounts are prepared, together, and balance sheet is prepared, independently. Here, it is very necessary to remember that these accounts are not prepared in the ledger rather than on the plain sheets or papers. These papers are filed for future reference. The method of preparing these accounts is different from other accounts like personal, real, nominal accounts.
As stated above, the term ‘final accounts’ refer to manufacturing account, trading account, profit & loss account and balance sheet. Balance sheet is a statement but even then it is included in final accounts. Now, here the question arises that why they are named final accounts?
Every businessman is, ultimately, interested to know the final result of the business. These are called final accounts because they are the last accounts, prepared at the end of the year. They serve the ultimate purpose of keeping accounts. Their purpose is to analyze the effect of variousincomesandexpensesduringtheyearandtheresultantprofitorloss.
Manufacturing, Trading, profit & loss account and balance sheet, all these together, are called as final accounts. Final result of Manufacturing account is transferred to Trading account. Final result of trading is known through Profit and Loss Account. Financial position is reflected by Balance Sheet. These are, usually, prepared at the close of the year hence known as final accounts.
Final balances of all the accounts in the ledger are transferred to trial balance. From trial balance, expenses and income accounts are transferred to manufacturing account, trading account and profit and loss account.
Accounts, with balances, which are to be carried forward to the next year, are shown in the balance sheet. The balance sheet constitutes the final stage of accounting.
Final accounts have to be prepared, every year, in every business. Final accounts are prepared, after all the accounts have been completely written and trial balance is extracted. Before preparing final accounts, it becomes necessary to examine whether all the expenses and incomes for the year for which accounts are prepared have been duly provided for and included in the accounts. Circumstances and items are common where adjustments, at the end of the accounting period, are to be made. In such items, no cash is involved hence no record has been kept till year-end.
Form of Final Accounts: There is a standard format of final accounts only in the case of a limited company. There is no fixed prescribed format of financial accounts in the case of a proprietary concern and partnership firm.
Cycle of Final Accounts
Transactions |
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Trial Balance |
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Final Accounts |
- MANUFACTURING ACCOUNT
The manufacturing entities generally prepare a separate Manufacturing Account as a part of Final accounts in addition to Trading Account, Profit and Loss Account and Balance Sheet. The objective of preparing Manufacturing Account is to determine manufacturing costs of finished goods for assessing the cost effectiveness of manufacturing activities. Manufacturing costs of finished goods are then transferred from the Manufacturing Account to Trading Account.
Purpose: A manufacturing account serves the following functions:
- It shows the total cost of manufacturing the finished products and sets out in detail, with appropriate classifications, the constituent elements of such cost. It is, therefore, debited with the cost of materials, manufacturing wages and expenses incurred directly or indirectly on manufacture.
- It provides details of factory cost and facilitates reconciliation of financial books with cost records and also serves as a basis of comparison of manufacturing operations from year to year.
- The Manufacturing Account may also be used for various other purposes. For example, if the output is carried to the Trading Account at market prices, it discloses the profit or loss on manufacture. Similarly, it may also be used to fix the amount of production of profit sharing bonus when such schemes are in force.
Manufacturing Costs:
Manufacturing costs are classified into : + Raw Material Consumed + Direct Manufacturing Wages + Direct Manufacturing Expenses + Direct Manufacturing Cost + Indirect Manufacturing expenses or + Manufacturing Overhead Total Manufacturing Cost |
Raw Material consumed is arrived at after adjustment of opening and closing Inventory of raw materials:
Raw Material Consumed = Opening inventory of Raw Materials + Purchases – Closing inventory of Raw Materials |
If there remain unfinished goods at the beginning and at the end of the accounting period, cost of such unfinished goods (also termed as Work-In-Process) is shown in the Manufacturing Account –
Opening inventory of Work-in-Process is posted to the debit of the Manufacturing Account and closing inventory of Work-in-Process is posted to the credit of the Manufacturing Account.
Direct Manufacturing Expenses
Direct manufacturing expenses are costs, other than material or wages, which are incurred for a specific product or saleable service.
Examples of direct manufacturing expenses are (i) Royalties for using license or technology if based on units produced, (ii) Hire charge of the plant and machinery used on hire, if based on units produced, etc.
When royalty or hire charges are based on units produced, these expenses directly vary with production.
Indirect Manufacturing Expenses or Overhead Expenses
These are also called Manufacturing overhead, Production overhead, Works overhead, etc. Overhead is defined as total cost of indirect material, indirect wages and indirect expenses.
Overhead = Indirect Material + Indirect Wages + Indirect Expenses
Indirect material means materials which cannot be linked directly with the units produced, for example, stores consumed for repair and maintenance work, small tools, fuel and lubricating oil, etc.
Indirect wages are those which cannot be directly linked to the units produced, for example, wages for maintenance works, holding pay, etc.
Indirect expenses are those which cannot be directly linked to the units produced, for example, training expenses, depreciation of plant and machinery, depreciation of factory shed, insurance premium for plant and machinery, factory shed, etc.
Accordingly, indirect manufacturing expenses comprise indirect material, indirect wages and indirect expenses of the manufacturing division.
By-Products
In most manufacturing operations, the production of the main product is accompanied by the production of a subsidiary product which has a value on sale. For example, the production of hydrogenated vegetable oil is accompanied by the production of oxygen gas and the production of steel yields scrap. The subsidiary product is termed as a by-product because its production is not consciously undertaken but results out of the production of the main product. It is usually very difficult to ascertain the cost of the product. Moreover, its value usually forms a very small percentage of the main product.
By-product is a secondary product. This is produced from the same raw materials, which are used for producing the main product and without incurring any additional expenses from the same production process in which the main product is produced. Some examples of by-product are given below:
(i) Molasses is the by-product in sugar manufacturing;
(ii) Butter milk is the by-product of a dairy which produces butter and cheese, etc.
By-products generally have insignificant value as compared to the value of main product. They are generally valued at net realizable value, if their costs cannot be separately identified. It is often treated, as “Miscellaneous income” but the correct treatment would be to credit the sale value of the by-product to Manufacturing Account so as to reduce to that extent, the cost of manufacture of main product.
Format of Manufacturing Account
Particulars | Units | Amount Rs. | Particulars | Units | Amount Rs. |
To Opening Work-in-process To Raw Material Consumed: Opening inventory Add: Purchases Less: Closing inventory To Direct Wages To Direct expenses: Prime cost To Factory overheads: Royalty Hire charges To Indirect expenses: Repairs & Maintenance Depreciation Factory cost |
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| By Sale of Scrap By-products at net realizable value By Closing Work-in- Process By Trading A/c (Cost of production) |
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The following general rules may be observed.
- The Manufacturing Account should have columns showing the quantities and values. Frequently, all the quantities are not given and the quantities applicable to one or more of the items would have to be worked out. For example, if the question does not state the total number of items sold, the quantity can be worked out by adding opening inventory and units manufactured and deducting closing inventory. It is, therefore, useful to have quantity columns in the account so that it can be seen that both sides balance.
- The Manufacturing Account will show the quantity of raw materials in inventory at the beginning and at the end of the year and the purchases during the year. As regards finished goods, it will only show the quantity manufactured and, as regards work-in-progress, the opening and closing amounts.
- The Trading Account will show the quantities of finished goods manufactured and sold and the opening and closing inventory. It will not show the quantity of raw materials or work-in-progress.
- For determining the value of closing inventory, in the absence of specific instruction to the contrary, it must be assumed that sales have been on “first in-first out” basis, that is, the closing inventory consists as far as possible of goods produced during the year, the opening inventory being sold out.
It may be mentioned here that nowadays no manufacturing business entity prepares manufacturing account as part of its final set of accounts. Even the items of manufacturing account are shown either in trading account (in case of non-corporate entities) or in Statement of profit and loss (in case of corporate entities).
The procedure of preparation of Trading Account, Profit and Loss Account and Balance Sheet has already been studied by students in the 11th standard. Students should refer the same for attempting the problems based on the preparation of complete set of final accounts of a sole proprietor.
2. TRADING ACCOUNT
Particulars | Amount | Particulars | Amount |
To Opening Stock Finished Goods |
| By Sales |
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To Purchases |
| Less : Return Inward |
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Less : Return Outward |
| By Goods distributed as free samples |
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To Carriage Inward |
| By Goods lost by fire |
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To Freight |
| By Goods lost in Accident |
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To Dock Charges |
| By Goods lost by theft |
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To Custom Duty |
| By Goods withdrawn by Proprietor |
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To Wages Productive |
| By Closing Stock Finished Goods |
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To Manufacturing Wages |
| By Gross Loss c/d |
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To Wages & Salaries |
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To Import Duty |
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To Coal/Coke/Gas/ Motive Power/Oil/ Water /Grease |
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To Royalty on Purchase/Production |
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To Factory Rent & Rates |
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To Factory Insurance |
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To Works Manager's Salary |
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To Primary Packaging |
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To Gross Profit c/d |
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Total |
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3. PROFIT & LOSS ACCOUNT
Particulars | Amount | Particulars | Amount |
To Salaries To Salaries & Wages To Rent & Rates To Insurance To Electricity/Lighting To Telephone, Postage To Printing & Stationery To Travelling Expenses of Salesman To Depreciation on Assets To Loading Charges To Audit Fees To Entertainment Exp. To Repairs / Renewals / Maintenance |
| By Gross Profit b/d By Commission Received By Discount Received/ Earned By Interest Received By Dividend Received By Rent Received By Sundry/Miscellaneous Receipts By Profit on Sale of Asset By Net Loss transferred to Balance Sheet
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To Interest on Loan To Sundry/Miscellaneous Expenses To Conveyance To Loss by Fire To Loss by Theft To Loss in Accident To Goods distributed as free sample To Commission Allowed/ Given To Discount allowed To Allowances To Advertisement To Carriage Outward To Sale Charges To Bad Debts To Export Duty To Taxes To General Expenses To Trade Expenses To Legal Charges To Professional Charges To Bank Charges To Solicitor's Fees To Secondary Packing Charges To Loss on sale of Fixed Assets To Net Profit transferred to Balance Sheet |
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Total |
| Total |
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4. BALANCE SHEET
Particulars | Amount | Particulars | Amount |
Capital Bank Loan |
| Goodwill |
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Loan from Relatives |
| Patents |
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Bills Payable |
| Copyrights |
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Bank Overdraft |
| Trade Marks |
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Sundry Creditors |
| Furniture & Fittings |
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Less: Provision for Discount on Creditors |
| Less: Depreciation |
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Outstanding Expenses |
| Plant & Machinery |
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Income received in Advance |
| Less: Depreciation |
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Provision for Taxes |
| Land & Building |
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| Less: Depreciation |
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| Premises |
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| Less: Depreciation |
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| Equipment |
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| Less: Depreciation |
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| Delivery/Motor Van |
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| Less: Depreciation |
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| Loose Tools/Spare Parts |
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| Less: Depreciation |
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| Investments |
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| Sundry Debtors |
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| Less: Bad Debts |
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| Less: R.D.D |
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| Less: Provision for Discount on Debtors |
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| Bills Receivable |
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| Cash In Hand |
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| Cash at Bank |
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| Loans & Advances |
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| Prepaid Expenses |
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| Income Receivable |
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| Closing Stock |
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Total |
| Total |
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Sometimes, it is seen that after preparation of trial balance, but, prior to preparation of final accounts, it may be noticed some business transactions have been, completely or partially, omitted to be recorded or entered wrong. Besides this, there are some incomes or expenses, which are related to the next year but have been received or paid during the current year. Before preparing trading and profit & loss accounts, adjustment entries are necessary in these accounts.
Transactions omitted relate to the current year must be entered in books. If a transaction entered is not related to the current year, fully or partly, that portion of income or expense must be excluded. This process is made through adjustment entries in the books of accounts. If we ignore to make the necessary adjustments, the trading, profit & loss accounts do not show the true profit or loss and in consequence balance sheet fails to depict true financial position of the business. This situation defeats the very purpose of final accounts. Hence, adjustment entries play an important role in presenting correct picture of accounts.
Final Accounts are prepared, normally, for a complete period. It must be kept in mind that expenses and incomes for the relevant accounting period are to be taken, while preparing final accounts. If an expense has been incurred but not paid during the period, a liability for the unpaid amount should be created, before finding out the operating result and financial position of a concern. In order to prepare the final accounts on mercantile system of accounting, all expenses and incomes relating to the period, whether incurred or not, received or not, should be brought into the books. For doing this, a concern is required to pass certain entries at the end of the year to adjust the various items of incomes and expenses. Such entries are called adjusting entries.
Accounting Treatment: Trading and Profit and Loss and Balance sheet, together, are called as final accounts. Item appearing in the trial balance appears only once in final accounts, either on the debit or credit. Any adjustment entry requires two postings, debit and credit for the same amount. Important point is students should do the posting (debit and credit) in the concerned accounts, simultaneously. Care is to be exercised that the amount is the same for the total debit and credit.
The following is the summary of important adjustments, which are, normally made at the end of accounting period:
Sr No | Adjustment | Effect 1 | Effect 2 |
1 | Closing Stock- Raw Materials | Less from RC- Mfg A/c | BS- Asset Side |
| Closing Stock- Work In Progress | Mfg A/c- Cr Side | BS- Asset Side |
| Closing Stock- Finished Goods | Trading A/c- Cr Side | BS- Asset Side |
2 | Outstanding Expenses or Payable | Add to Expense | BS- Liability Side |
3 | Prepaid Expense | Less from Expenses | BS- Asset Side |
4 | Outstanding Income or Receivable | Add to Income | BS- Asset Side |
5 | Income received in Advance | Less from Income | BS- Liability Side |
6 | Depreciation on Assets used in Mfg | Less from Asset in BS | Mfg A/c Dr Side |
| Depreciation on Office Assets | Less from Asset in BS | P/L A/c Dr Side |
7 | Interest on Capital | P & L A/c Dr Side | Add to Capital in BS |
8 | Interest on Drawings | P & L A/c Cr Side | Less from Capital in BS |
9 | Bad or Doubtful Debts | P & L Dr Side (Formula) | Less From Debtors |
10 | Provision/Reserve for Doubtful Debts (RDD) | P & L Dr Side (Formula) | Less From Debtors |
11 | Provision for Discount on Debtors | Add to Discount (P & L Dr Side) | Less From Debtors |
12 | Provision for Discount on Creditors | Add to Discount (P & L Cr Side) | Less From Creditors |
13 | Unrecorded Sales | Add to Debtors | Add to Sales |
14 | Unrecorded Purchases | Add to Creditors | Add to Purchases |
15 | Uninsured Goods lost by Fire/theft | P & L Dr Side | Trading A/c Cr Side |
16 | Insured Goods lost by Fire/theft | P & L Dr Side- Actual Loss Amount
BS Asset Side - Insurance Claim Receivable | Trading A/c Cr Side- Amount of Goods Lost |
17 | Goods Distributed as Free Samples | P & L Dr Side | Trading A/c Cr Side |
18 | Goods taken for Personal use by proprietor | Add to Drawings | Trading A/c Cr Side |
19 | Bills Receivable Dishonoured | Less from Bills Receivable | Add to Debtors |
20 | Bills Payable Dishonoured | Less from Bills Payable | Add to Creditors |
21 | Interest on Loan Payable | Add to Loan Liability Side | P & L Dr Side |
22 | Interest on Investment Receivable | Add to Investment Asset Side | P & L Cr Side |
‘Closing Entries’ are essential to ascertain the correct operating results. Accounts relating to expenses and incomes are to be closed to find out the operating profit. So, balances in the expenses and income accounts have to be transferred to Manufacturing, Trading and Profit and Loss Accounts. Process of closing expenses and income accounts is done through closing entries.
‘My balance sheet is not tallied, though I have made all the adjustment entries, correctly’ – this is the common statement often heard from the students, coming out of the examination hall.
Follow the following to tips to avoid this situation:
Entry appearing in Trial balance finds place at one place only, debit or credit.
Give a special identification (giving reference to the adjustment number in the problem), while reading the trial balance, against the entry, which requires adjustment. You would not forget to do the adjustment as the symbol reminds you to do adjustment! This is ‘Time Management’ too.
All adjustment entries have to be made at two places for the same amount. Students think that they can make entries at their convenience. This is a wrong approach. Once you debit, make credit for the same amount, simultaneously. Students know the adjustment entry, yet they do not make both the adjustments (changes) at the same time.
After making the adjustment, before you move to the next entry, check, again, that adjustment has been done at both the places for the same amount.
Do not forget to check that the debit amount and credit amount are the same.
Once you follow meticulously, your balance sheet would always tally.
INTRODUCTION TO SCHEDULE VI OF COMPANIES ACT, 1956
Note: Schedule VI of Companies Act, 1956 is now Schedule III of Companies Act, 2013
1. Section 129 of companies act 2013, provides for preparation of financial statements.
2. 2(40) to include balance sheet, profit and loss account/income and expenditure account, cash flow statement, statement of changes in equity and any explanatory note annexed to the above.
3. New section 129 corresponds to existing section 210. It provides that the financial statements shall give a true and fair view of the state of affairs of the company and shall comply with the accounting standards notified under new section 133.
4. It is also provided that the financial statements shall be prepared in the form provided in new schedule III of Companies Act, 2013.
5. It may be noted that in the new schedule III the provisions for preparation of balance sheet and statement of profit and loss have been given which are on the same lines as in the existing schedule VI.
6. Further, in the new Schedule III detailed instructions have been given for preparation of consolidated financial statements as consolidation of accounts of subsidiary companies is now made mandatory in section 129.
7. It may be noted that for the first time a provision has been made in the new section 129(3)that if a company has one or more subsidiaries it will have to prepare a consolidated financial statement of the company and of all the subsidiaries in the form provided in the new schedule III of Companies Act, 2013.
8. The company has also to attack along with its financial statement, a separate statement containing the salient features of the financials of the subsidiary companies in such form as may prescribed by the rules.
9. It is also provided that if the company has interest in any associate company or a joint venture the accounts of that company as well as joint venture shall be consolidated.
10. For this purpose associate company has been defined in new section 2(6) company has significant influence i.e. it has. 20% of the total share capital of the company or has control on the business decision under an agreement.
11. The Central Government has power to exempt any companies from complying with any of the requirements made under the section.
4.18 GENERAL INSTRUCTION FOR PREPARATION OF BALANCE SHEET AND STATEMENT OF PROFIT AND LOSS OF A COMPANY(section 129) | |||||||
GENERAL INSTRUCTIONS | (1) Where compliance with the requirements of the Act including Accounting Standards as applicable to the companies require any change in treatment or disclosure including addition, amendment, substitution or deletion in the head or sub-head or any changes, in the financial statements or statements forming part thereof, the same shall be made and the requirements of this Schedule shall stand modified accordingly.(2) The disclosure requirements specified in this Schedule are in addition to and not in substitution of the disclosure requirements specified in the Accounting Standards prescribed under the Companies Act, 2013. Additional disclosures specified in the Accounting Standards shall be made in the notes to accounts or by way of additional statement unless required to be disclosed on the face of the Financial Statements. Similarly, all other disclosures as required by the Companies Act shall be made in the notes to accounts in addition to the requirements set out in this Schedule. (3) (i) Notes to accounts shall contain information in addition to that presented in the Financial Statements and shall provide where required a) narrative descriptions or disaggregation’s of items recognized in those statements; and b) Information about items that do not qualify for recognition in those statements. (ii) Each item on the face of the Balance Sheet and Statement of Profit and Loss shall be cross-referenced to any related information in the notes to accounts. In preparing the Financial Statements including the notes to accounts, a balance shall be maintained between providing excessive detail that may not assist users of financial statements and not providing important information as a result of too much aggregation (4) (i) Depending upon the turnover of the company, the figures appearing in the Financial Statements maybe rounded off as given below:—
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(ii) Once a unit of measurement is used, it shall be used uniformly in the Financial Statements.(5) Except in the case of the first Financial Statements laid before the Company (after its incorporation) the corresponding amounts (comparatives) for the immediately preceding reporting period for all items shown in the Financial Statements including notes shall also be given. (6) For the purpose of this Schedule, the terms used herein shall be as per the applicable | |||||||
Accounting Standards. | Note: —this part of Schedule sets out the minimum requirements for on the face of the Balance Sheet, and the Statement of Profit and Loss (hereinafter referred to as —Financial Statements || for the purpose of this Schedule) and Notes. Line items, sub-line items and sub-totals shall be presented as an addition or substitution on the face of the Financial Statements when such presentation is relevant to an understanding of the company’s financial position or performance or to cater to industry/sector-specific disclosure requirements or when required for compliance with the amendments to the Companies Act or under the Accounting Standards. | ||||||
Name of the Company
Balance Sheet as at
| Notes | Current Year | Previous Year |
(in Rs.) | (in Rs.) | ||
EQUITY AND LIABILITIES |
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Shareholders Fund |
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Share Capital | 1 |
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Reserves & Surplus | 2 |
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Money Received against Warrants |
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Share Application Money pending allotment |
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Non-current Liabilities |
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Long Term Borrowings | 3 |
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Deferred Tax Liabilities (Net) | 4 |
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Other Long Term Liabilities | 5 |
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Long Term Provisions | 6 |
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Current Liabilities |
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Short Term Borrowings | 7 |
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Trade Payables | 8 |
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Other Current Liabilities | 9 |
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Short Term Provisions | 10 |
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Total |
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ASSETS |
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Non-current Assets |
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Fixed Assets | 11 |
|
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Tangible Assets |
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Intangible Assets |
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Capital Work-in-Progress |
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Intangible Assets under development |
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Non-current Investments | 12 |
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Deferred Tax Assets (Net) |
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Long Term Loans & Advances | 13 |
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Other Non-current Assets | 14 |
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Current Assets |
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Current Investments | 15 |
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Inventories | 16 |
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Trade Receivables | 17 |
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Cash and Cash Equivalents | 18 |
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Short Term Loans & Advances | 19 |
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Other Current Assets | 20 |
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Total |
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Significant Accounting Policies |
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The accompanying notes are an integral part of the financial statements |
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GENERAL INSTRUCTIONS FOR PREPARATION OF BALANCE SHEET
| PARTICULARS |
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|
1. | When an asset shall be classified as current? | If it satisfies any of the given criteria | (a) it is expected to be realised, or is intended for sale or consumption, in the company’s normal operating cycle; or (b) it is held primarily for the purpose of being traded; or (c) it is expected to be realised within twelve months after the reporting date; or (d) it is cash or cash equivalent unless it is restricted from being exchanged or used to settle a liability for at least twelve months after the reporting date. |
2. | When an asset shall be classified as Non Current ? |
| Asset other than Current Asset shall be classified as non current |
| Operating Cycle | Time between The acquisition of assets for processing And Their realisation in cash or cash equivalents | Where the normal operating cycle cannot be identified: It is assumed to have a duration of 12 months |
| When liability shall be classified as current ? | If it satisfies any of the given criteria | (a) It is expected to be settled in the company normal operating cycle; or (b) It is held primarily for the purpose of being traded; or (c) It is due to be settled within twelve months after the reporting date; or (d)The company does not have an unconditional right to defer settlement of the liability for least twelve months after the reporting cm Terms of a liability that could, at the option the counterparty, result in its settlement by the issue of equity instruments do not affect its classification. |
| When an liability shall be classified as Non Current ? |
| Liability other than Current liability shall be classified as Non-Current. |
| When receivable shall be classified as a “trade receivable” ? | If it is in respect of the amount due on account of goods sold or services rendered | In The Normal Course Of Business |
| When payable shall be classified as a “trade payable” ? | If it is in respect of the amount due on account of goods purchased or services received | In The Normal Course Of Business |
1 | Share Capital | For each Class of Share Capital(Different classes of preference shares to be treated separately) | a. The number and amount of shares authorized. b. The number of shares issued, subscribed and fully paid, and subscribed but not fully paid. c. Par value per share. d. A reconciliation of the number of shares outstanding at the beginning and at the end of the reporting period. e. The rights, preferences and restrictions attaching to each class of shares including restrictions on the distribution of dividends and the repayment of capital. f. Shares in respect of each class in the company held by its holding company or its ultimate holding company including shares held by or by subsidiaries or associates of the holding company or the ultimate holding company in aggregate. g. Shares in the company held by each shareholder holding more than 5 per cent, shares specifying the number of shares held. h. Shares reserved for issue under options and contracts/commitments for the sale of shares/disinvestment, including the terms and amounts. i. For the period of five years immediately preceding the date as at which the Balance Sheet is prepared. i. Aggregate number and class of shares allotted as fully paid-up pursuant to contract(s) without payment being received in cash. Ii. Aggregate number and class of shares allotted as fully paid-up by way of bonus shares. Iii. Aggregate number and class of shares bought back. j. Terms of any securities convertible into equity/preference shares issued along with the earliest date of conversion in descending order starting from the farthest such date. k. Calls unpaid (showing aggregate value of calls unpaid by directors and officers). l. Forfeited shares (amount originally paid-up). |
2 | Reserves and Surplus | Shall be classified as | 1) Capital Reserves; 2) Capital Redemption Reserve; 3) Securities Premium Reserve; 4) Debenture Redemption Reserve; 5) Revaluation Reserve; 6) Share Options Outstanding Account; 7) Other Reserves(specify the nature and purpose of each reserve and the amount in respect thereof); 8) Surplus i.e., balance in Statement of Profit and Loss disclosing allocations and appropriations such as dividend, bonus snares and transfer to/from reserves, etc.; (Additions and deductions since last balance sheet to be shown under each of the specified heads); |
Reserve specifically represented | By earmarked investments shall be termed as a “fund”. | ||
Debit balance of statement of profit and loss | Shall be shown as a negative figure under the head “Surplus”. Similarly, the balance of “Reserves and Surplus”, after adjusting negative balance of surplus, if any, shall be shown under the head “Reserves and Surplus” even if the resulting figure is in the negative. | ||
3. | Long-Term Borrowings | Shall be classified as | 1) Bonds/debentures; 2) Term loans: (i) from banks. (ii) from other parties 3) Deferred payment liabilities; 4) Deposits; 5) Loans and advances from related parties; 6) Long term maturities of finance lease obligations; 7) Other loans and advances (specify nature) |
Shall be further sub-classified as | SECURED AND UNSECURED (Nature of security shall be specified separately in each case) | ||
Where loans have been guaranteed by directors or others | The aggregate amount of such loans under each head shall be disclosed. | ||
|
| Bonds/debentures (along with the rate of interest and particulars of redemption or conversion, as the case maybe) | Shall be stated in descending order of maturity or conversion, starting from farthest redemption or conversion date, as the case may be. Where bonds/debentures are redeemable by instalments, the date of maturity for this purpose must be reckoned as the date on which the first instalment becomes due. |
Particulars of any redeemed bonds/debentures | Which the company has power to reissue shall be disclosed | ||
Shall state | Terms of repayment of term loans and other loans | ||
Shall specify | Period and amount of continuing default as on the balance sheet date in repayment of loans and interest(separately in each case) | ||
4. | Other Long-term Liabilities | Shall be classified as | (1) Trade payables; (2) Others. |
5. | Long-term provisions | Shall be classified as | 1) Provision for employee benefits; 2) Others (specify nature). |
6. | Short-term borrowings | Shall be classified as | 1) Loans repayable on demand; (i) from banks. (ii) from other parties. (2) Loans and advances from related parties; (3) Deposits; (4) Other loans and advances (specify nature). |
Borrowings shall further be sub-classified as | Secured and unsecured(Nature of security shall be specified separately in each case) | ||
Where loans have been guaranteed by directors or others | The aggregate amount of such loans under each head shall be disclosed. | ||
Shall specify | Period and amount of continuing default as on the balance sheet date in repayment of loans and interest (separately in each case) | ||
7. | Other current liabilities | Shall be classified as | 1) Current maturities of long-term debt; 2) Current maturities of finance lease obligations; 3) Interest accrued but not due on borrowings; 4) Interest accrued and due on borrowings; 5) Income received in advance; 6) Unpaid dividends; 7) Application money received for allotment of securities and due for refund and interest accrued thereon. Share application money includes advances towards allotment of share capital. The terms and conditions including the number of shares proposed to be issued, the amount of premium, if any, and the period before which shares shall be allotted shall be disclosed. It shall also be disclosed whether the company has sufficient authorised capital to cover the share capital amount resulting from allotment of shares out of such share application money. Further, the period for which the share application money has been pending beyond the period for allotment as mentioned in the document inviting application for shares along with the reason for such share application money being pending shall be disclosed. Share application money not exceeding the issued capital and to the extent not refundable shall be shown under the head Equity and share application money to the extent refundable, i.e., the amount in excess of subscription or in case the requirements of minimum subscription are not met, shall be separately shown under “Other current liabilities”; 8) Unpaid matured deposits and interest accrued thereon; 9) Unpaid matured debentures and interest accrued thereon; 10) Other payables (specify nature). |
8 | Short-term provisions | Shall be classified as | 1) Provision for employee benefits 2) Others (specify nature). |
9. | Tangible assets | Classification shall be given as | 1) Land; 2) Buildings; 3) Plant and Equipment; 4) Furniture and Fixtures; 5) Vehicles; 6) Office equipment; 7) Others (specify nature). |
| Under lease shall be separately specified | Under each class of asset | |
| A reconciliation of the gross and net carrying amounts of each class of assets at the beginning and end of the reporting period | Showing additions, disposals, acquisitions through business combinations and other adjustments and the related depreciation and impairment losses/reversals shall be disclosed separately. | |
|
| Where sums have been written-off on a reduction of capital or revaluation of assets or where sums have been added on revaluation of assets, every balance sheet subsequent to date of such write-off, or addition | Shall show the reduced or increased figures as applicable and shall by way of a note also show the amount of the reduction or increase as applicable together with the date thereof for the first five years subsequent to the date of such reduction or increase. |
10 | Intangible assets | Classification shall be given as | 1) Goodwill; 2) Brands /trademarks; 3) Computer software; 4) Mastheads and publishing titles; 5) Mining rights; 6) Copyrights, and patents and other intellectual property rights, services and operating rights; 7) Recipes, formulae, models, designs and prototypes; 8) Licences and franchise; 9) Others (specify nature). |
A reconciliation of the gross and net carrying amounts of each class of assets at the beginning and end of the reporting period | Showing additions, disposals, acquisitions through business combinations and other adjustments and the related depreciation and impairment losses/reversals shall be disclosed separately. | ||
Where sums have been written-off on a reduction of capital or revaluation of assets or where sums have been added on revaluation of assets, every balance sheet subsequent to date of such write-off, or addition | Shall show the reduced or increased figures as applicable and shall by way of a note also show the amount of the reduction or increase as applicable together with the date thereof for the first five years subsequent to the date of such reduction or increase. | ||
11. | Non-current investments | Shall be classified as trade investments and other investments and further classified as | 1) Investment property; 2) Investments in Equity Instruments; 3) Investments in preference shares; 4) Investments in Government or trust securities; 5) Investments in debentures or bonds; 6) Investments in Mutual Funds; 7) Investments in partnership firms; 8) Other non-current investments (specify nature). Under each classification, details shall be given of names of the bodies corporate indicating separately whether such bodies are (i) subsidiaries, (ii) associates, (iii) joint ventures, or (iv) controlled special purpose entities in whom investments have been made and the nature and extent of the investment so made in each such body corporate (showing separately investments which are partly-paid). In regard to investments in the capital of partnership firms, the names of the firms (with the names of all their partners, total capital and the shares of each partner) shall be given. |
Investments carried at other than at cost | Should be separately stated specifying the basis for valuation thereof; | ||
The following shall also be disclosed | 1) Aggregate amount of quoted investments and market value thereof; 2) Aggregate amount of unquoted investments; 3) Aggregate provision for diminution in value of investments. | ||
12. | Long-term loans and advances | Loans and advances shall be classified as: | 1) Capital Advances; 2) Security Deposits; 3) Loans and advances to related parties (giving details thereof); 4) Other loans and advances (specify nature). |
The above shall also be separately sub-classified as: | 1) Secured, considered good; 2) Unsecured, considered good; 3) Doubtful. | ||
Allowance for bad and doubtful loans and advances | Shall be disclosed under the relevant heads separately. | ||
Loans and advances due by directors or other officers of the company or any of them either severally or jointly with any other persons or amounts due by firms or private companies respectively in which any director is a partner or a director or a member | Should be separately stated. | ||
13. | Other non-current assets | Shall be classified as | 1) Long-term Trade Receivables (including trade receivables on deferred credit terms); 2) Others (specify nature); 3) Long term Trade Receivables, shall be sub-classified as: |
| (i) Secured, considered good; (ii) Unsecured, considered good; (iii) Doubtful Allowance for bad and doubtful debts shall be disclosed under the relevant heads separately. Debts due by directors or other officers of the company or any of them either severally or jointly with any other person or debts due by firms or private companies respectively in which any director is a partner or a director or a member should be separately stated. | ||
14. | Current Investments | Shall be classified as | 1) Investments in Equity Instruments; 2) Investment in Preference Shares; 3) Investments in Government or trust securities: 4) Investments in debentures or bonds; 5) Investments in Mutual Funds; 6) Investments in partnership firms; 7) Other investments (specify nature). |
Under each classification | Details shall be given of names of the bodies corporate indicating separately whether such bodies are: (i) subsidiaries, (ii) associates, (iii) joint ventures, or (iv) controlled special purpose entities in whom investments have been made and the nature and extent of the investment so made in each such body corporate (showing separately investments which are partly paid). In regard to investments in the capital of partnership firms, the names of the firms (with the names of all their partners, total capital and the shares of each partner) shall be given. | ||
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| Following shall also be disclosed: | 1) The basis of valuation of individual investments 2) Aggregate amount of quoted investments and market value thereof; 3) Aggregate amount of unquoted investments; 4) Aggregate provision made for diminution in value of investments |
15. | Inventories | Inventories shall be classified as: | 1) Raw materials; 2) Work-in-progress; 3) Finished goods; 4) Stock-in-trade (in respect of goods acquired for trading); 5) Stores and spares; 6) Loose tools; 7) Others (specify nature) |
Goods-in-transit | Shall be disclosed under the relevant sub-head of inventories | ||
Mode of valuation | Shall be stated | ||
16. | Trade Receivables | Shall separately state shall be sub-classified as | Aggregate amount of Trade Receivables outstanding for a period exceeding six months from the date they are due for payment |
1) Secured, considered good; 2) Unsecured, considered good; 3) Doubtful. Allowance for bad and doubtful debts shall be disclosed under the relevant heads separately. Debts due by directors or other officers of the company or any of them either severally or jointly with any other person or debts due by firms or private companies respectively in which any director is a partner or a director or a member should be separately stated. | |||
17. | Cash and cash equivalents | Shall be classified as | 1) Balances with banks; 2) Cheques, drafts on hand; 3) Cash on hand; 4) Others (specify nature) |
Earmarked balances with banks (for example, for unpaid dividend) | Shall be separately stated | ||
Balances with banks to the extent held as margin money or security against the borrowings, guarantees, other commitments | Shall be disclosed separately. | ||
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| Repatriation restrictions, if any, in respect of cash and bank balances | Shall be disclosed separately. |
Bank deposits with more than twelve months maturity | Shall be disclosed separately. | ||
18. | Short-term loans and advances | Shall be classified as: | 1) Loans and advances to related parties (giving details thereof); 2) Others (specify nature). |
Above shall also be sub-classified as | 1) Secured, considered good; 2) Unsecured, considered good; 3) Doubtful. | ||
Allowance for bad and doubtful loans and advances | Shall be disclosed under the relevant heads separately | ||
Loans and advances due by directors or other officers of the company or any of them either severally or jointly with any other person or amounts due by firms or private companies respectively in which any director is a partner or a director or a member | Shall be separately stated | ||
19. | Other current assets (specify nature) | An all-inclusive heading | Which incorporates current assets that do not fit into any other asset categories |
20. | Contingent liabilities (to the extent not | Shall be classified as | 1) Claims against the company not acknowledged as debt; |
| Provided for) commitments (to the extent not provided for) | Shall be classified as | 2) Guarantees; 3) Other money for which the company is contingently liable. 1) Estimated amount of contracts remaining to be executed on capital account and not provided for; 2) Uncalled liability on shares and other investments partly paid; 3) Other commitments (specify nature). |
| Notes | Current Year | Previous Year |
(in Rs.) | (in Rs.) | ||
Continuing Operations |
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REVENUE | 2 |
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Revenue from Operations |
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Less : Excise Duty |
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Revenue from Operations (Net) | 21 |
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Other Income | 22 |
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Total Revenue |
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EXPENSES |
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Cost of Materials Consumed | 23 |
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Purchases of Stock-in-Trade | 24 |
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(Increase)/Decrease in Inventories of FG/WIP/Stock-in-trade | 25 |
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Employee Benefit Expenses | 26 |
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Finance Cost | 27 |
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Depreciation & Amortisation Expenses | 28 |
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Other Expenses | 29 |
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Total Expenses |
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Profit Before Exceptional and Extraordinary Items & Tax |
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Exceptional Income / Expenses |
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Profit Before Extraordinary Items & Tax |
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Prior Period Items |
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Extraordinary Items |
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Profit Before Tax |
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Provision for Taxation | 30 |
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Profit/(Loss) for the period from continuing operations |
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Discontinuing Operations |
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Profit/(Loss) from Discontinuing operations |
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Tax expense of Discontinuing operations |
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Profit/(Loss) from Discontinuing operations after Tax |
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Profit/(Loss) for the period |
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Earnings per Share | 3 |
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Basic EPS (in Rs.) |
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Diluted EPS (in Rs.) |
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Details to be disclosed in the notes
a. Amount of “Revenue from operations” will be divided in –
i. Sale of products (including excise duty)
Ii. Sale of services
Iii. Other operating revenues
b. Finance cost will be distributed in –
i. Interest
Ii. Dividend on redeemable preference shares
Iii. Exchange Differences regarded as an adjustment to borrowing costs, and
Iv. Other borrowing costs (if any)
c. Other Income will be distributed in –
i. Interest Income,
Ii. Dividend Income, and
Iii. Other non-operating income
d. Other Comprehensive Income shall be classified into –
i. Items that will not be reclassified to profit or loss
1. Changes in revaluation surplus
2. Remeasurements of the defined benefit plans
3. Equity Instruments through Other Comprehensive Income
4. Fair value changes relating to own credit risk of financial liabilities designated at fair value through profit or loss
5.Share of Other Comprehensive Income in Associates and Joint Ventures, to the extent not to be classified into profit or loss, and
6. Others
Ii. Items that will be reclassified to profit or loss
1. Exchange differences in translating the financial statements of a foreign operation;
2. Debt instruments through Other Comprehensive Income;
3. The effective portion of gains and loss on hedging instruments in a cash flow hedge;
4. Share of other comprehensive income in Associates and Joint Ventures, to the extent to be classified into profit or loss; and
5. Others
e. Employees benefit expense
i. Salaries and wages,
Ii. Contribution to provident and other funds,
Iii. Share-based payments to employees
Iv.staff welfare expenses
f. Depreciation and amortisation expense,
g. Interest Income,
h. Interest Expense,
i. Dividend Income,
j. Net gain or loss on sale of investments,
k. Net gain or loss on foreign currency transaction and translation (other than considered as finance cost),
l. Payment to the auditor as
i. Auditor
Ii. For taxation matters
Iii. For company law matters
Iv. For other services
v. For reimbursement of expenses
m. Amount of expenses incurred on corporate social responsibility activities,
n. Details of items of exceptional nature
o. Any other expense or income which exceeds higher of Rs. 10,00,000 or 1% of revenue from operations.
Particulars | Current Year | Previous Year |
1. SHARE CAPITAL |
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Authorised Share Capital : |
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--- Equity Shares of Rs.-- each |
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Issued Subscribed and Paid Up Capital : |
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--- Equity Shares of Rs.-- each |
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Less: Calls unpaid by Directors & Officers |
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Less: Calls unpaid by Others |
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Less: Shares Forfeited : |
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Add: Forfeited Shares Reissued |
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Total |
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2. RESERVES & SURPLUS |
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Capital Surplus |
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As per last Balance Sheet |
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Add : Additions during the year |
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Less : Transfer / Adjustment during the year |
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Profit & Loss Account |
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As per last Balance Sheet |
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Add : Transfer from General Reserves |
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Add : Transfer from Capital Reserves |
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Add : Transfer from Special Sources |
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Add : Transfer from Other Reserves |
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Add : Other Additions |
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Less : Transfer to General Reserves |
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Less : Transfer to Statutory Reserves |
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Less : Transfer to Capital Reserves |
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Less : Transfer to Capital Redemption Reserves |
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Less : Transfer to Debenture Redemption Reserves |
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Less : Transfer to Other Reserves |
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Less : Appropriation for Interim Dividend |
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Less : Appropriation for Final Dividend |
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Less : Appropriation for Preference Dividend |
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Less : Appropriation for Special Dividend |
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Less : Appropriation for Dividend Distribution Tax on Equity Dividend |
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Less : Appropriation for Dividend Distribution Tax on Preference Dividend |
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Less : Other Deductions(Misc/Preliminary Exps not w/off) |
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Surplus / (Deficit) during the year |
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Total |
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3. LONG TERM BORROWINGS |
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Secured |
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Bonds |
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Debentures |
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Loans from Banks |
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Loans from Financial Institutions |
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Loans from related parties |
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Loans from Other |
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Secured Deposits |
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Loan from Subsidiaries |
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Loan from Directors |
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Loan from Managers |
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Loan taken for Fixed Assets |
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Hire Purchase Instalment Payable |
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Other Secured Borrowings |
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Unsecured |
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Bonds |
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Debentures |
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Loans from Banks |
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Loans from Financial Institutions |
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Loans from related parties |
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Loans from Other |
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Unsecured Deposits |
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Loan from Subsidiaries |
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Loan from Directors |
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Loan from Managers |
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Loan taken for Fixed Assets |
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Hire Purchase Instalment Payable |
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Other Secured Borrowings |
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Total |
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4. DEFERRED TAX ASSET / LIABILITIES |
|
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Deferred Tax Liabilities |
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Branch Profit Tax |
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Others |
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Deferred Tax Assets |
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Fixed Assets |
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Others |
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Total |
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5. OTHER LONG TERM LIABILITIES |
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Trade Payables |
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Other Long Term Liabilities |
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Total |
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|
|
6. LONG TERM PROVISIONS |
|
|
Provision for Employee Related Liabilities |
|
|
Employee Health Insurance |
|
|
Other Long Term Provisions |
|
|
Others |
|
|
|
|
|
Total |
|
|
|
|
|
7. SHORT TERM BORROWINGS |
|
|
Secured |
|
|
Bonds |
|
|
Debentures |
|
|
Loans from Banks |
|
|
Loans from Financial Institutions |
|
|
Loans from related parties |
|
|
Loans from Other |
|
|
Secured Deposits |
|
|
Loan from Subsidiaries |
|
|
Loan from Directors |
|
|
Loan from Managers |
|
|
Loan taken for Fixed Assets |
|
|
Hire Purchase Installment Payable |
|
|
Other Secured Borrowings |
|
|
|
|
|
Unsecured |
|
|
Bonds |
|
|
Debentures |
|
|
Loans from Banks |
|
|
Loans from Financial Institutions |
|
|
Loans from related parties |
|
|
Loans from Other |
|
|
Unsecured Deposits |
|
|
Loan from Subsidiaries |
|
|
Loan from Directors |
|
|
Loan from Managers |
|
|
Loan taken for Fixed Assets |
|
|
Hire Purchase Instalment Payable |
|
|
Other Secured Borrowings |
|
|
Total |
|
|
|
|
|
8. TRADE PAYABLES |
|
|
|
|
|
Creditors for Materials |
|
|
Creditors for Expenses |
|
|
Other Creditors |
|
|
|
|
|
Total |
|
|
|
|
|
9. OTHER CURRENT LIABILITIES |
|
|
Current Maturity of Long Term Debt |
|
|
Current Maturity of Finance Lease Obligation |
|
|
Interest Accrued but not Due |
|
|
Interest Accrued and Due |
|
|
Advances Received |
|
|
Unclaimed / Unpaid Amounts |
|
|
Share Application Money Refundable |
|
|
Other Payables |
|
|
|
|
|
Total |
|
|
|
|
|
10. SHORT TERM PROVISIONS |
|
|
Provision for Employee Related Liabilities |
|
|
Provision for Employees |
|
|
Provision for Dividend |
|
|
Provision for Dividend Distribution Tax |
|
|
Provision for Statutory Liabilities |
|
|
Other Short Term Provisions |
|
|
|
|
|
Total |
|
|
|
|
|
11. FIXED ASSETS |
|
|
Tangible |
|
|
Land & Building |
|
|
Add: Additions |
|
|
Less: Deductions |
|
|
Less: Depreciation |
|
|
|
|
|
Plant & Machinery |
|
|
Add: Additions |
|
|
Less: Deductions |
|
|
Less: Depreciation |
|
|
|
|
|
Furniture |
|
|
Add: Additions |
|
|
Less: Deductions |
|
|
Less: Depreciation |
|
|
|
|
|
Other Assets, etc |
|
|
Add: Additions |
|
|
Less: Deductions |
|
|
Less: Depreciation |
|
|
|
|
|
Intangible Assets |
|
|
Goodwill |
|
|
Brands / Trademarks |
|
|
Computer Software |
|
|
Mastheads and publishing titles |
|
|
Copyrights |
|
|
Patents |
|
|
Other intellectual property rights, |
|
|
Services & operating rights |
|
|
Less: Amortization |
|
|
|
|
|
Total Assets |
|
|
|
|
|
12. NON CURRENT INVESTMENTS |
|
|
A. Quoted Investments |
|
|
1. Trade Investments |
|
|
In Government Securities of Local Authorities |
|
|
In Debt Securities |
|
|
In Equity Securities |
|
|
In Preference Securities |
|
|
Other Investments |
|
|
|
|
|
2. Non-Trade Investments |
|
|
In Government Securities of Local Authorities |
|
|
In Debt Securities |
|
|
In Equity Securities |
|
|
In Preference Securities |
|
|
Other Investments |
|
|
|
|
|
3. Other Investments |
|
|
Investments in Associates |
|
|
Investments in Joint Venture |
|
|
Investments in Subsidiaries |
|
|
Investments in Controlled Special Purpose Entities |
|
|
|
|
|
B. Unquoted Investments |
|
|
1. Trade Investments |
|
|
In Government Securities of Local Authorities |
|
|
In Debt Securities |
|
|
In Equity Securities |
|
|
In Preference Securities |
|
|
In Mutual Funds |
|
|
In Property |
|
|
Other Investments |
|
|
|
|
|
2. Non-Trade Investments |
|
|
In Government Securities of Local Authorities |
|
|
In Debt Securities |
|
|
In Equity Securities |
|
|
In Preference Securities |
|
|
In Mutual Funds |
|
|
In Property |
|
|
Other Investments |
|
|
|
|
|
3. Other Investments |
|
|
Investments in Associates |
|
|
Investments in Joint Venture |
|
|
Investments in Subsidiaries |
|
|
Investments in Controlled Special Purpose Entities |
|
|
Investment in Capital of Partnership Firm |
|
|
|
|
|
Less : Provision for Diminution in Non-current Investments |
|
|
|
|
|
Total |
|
|
|
|
|
13. LONG TERM LOANS & ADVANCES |
|
|
Capital Advances |
|
|
Inter-Corporate Deposits |
|
|
Deposit with Statutory Authorities |
|
|
Other Security Deposits |
|
|
Given to Subsidiaries |
|
|
Given to Associates |
|
|
Given to Directors |
|
|
Given to Other Related Parties |
|
|
Given to Suppliers |
|
|
Given to Employees |
|
|
Other Long Term Loans & Advances |
|
|
Total |
|
|
14. OTHER NON-CURRENT ASSETS |
|
|
Long Term Trade Receivables |
|
|
|
|
|
Other Non-Current Assets |
|
|
Total |
|
|
|
|
|
15. CURRENT INVESTMENTS |
|
|
A. Quoted Investments |
|
|
1. Trade Investments |
|
|
In Government Securities of Local Authorities |
|
|
In Debt Securities |
|
|
In Equity Securities |
|
|
In Preference Securities |
|
|
Other Investments |
|
|
|
|
|
2. Non-Trade Investments |
|
|
In Government Securities of Local Authorities |
|
|
In Debt Securities |
|
|
In Equity Securities |
|
|
In Preference Securities |
|
|
Other Investments |
|
|
|
|
|
3. Other Investments |
|
|
Investments in Associates |
|
|
Investments in Joint Venture |
|
|
Investments in Subsidiaries |
|
|
Investments in Controlled Special Purpose Entities |
|
|
|
|
|
B. Unquoted Investments |
|
|
1. Trade Investments |
|
|
In Government Securities of Local Authorities |
|
|
In Debt Securities |
|
|
In Equity Securities |
|
|
In Preference Securities |
|
|
In Mutual Funds |
|
|
In Property |
|
|
Other Investments |
|
|
|
|
|
2. Non-Trade Investments |
|
|
In Government Securities of Local Authorities |
|
|
In Debt Securities |
|
|
In Equity Securities |
|
|
In Preference Securities |
|
|
In Mutual Funds |
|
|
In Property |
|
|
Other Investments |
|
|
|
|
|
3. Other Investments |
|
|
Investments in Associates |
|
|
Investments in Joint Venture |
|
|
Investments in Subsidiaries |
|
|
Investments in Controlled Special Purpose Entities |
|
|
Investment in Capital of Partnership Firm |
|
|
|
|
|
Less : Provision for Diminution in Non-current Investments |
|
|
|
|
|
Total |
|
|
|
|
|
16. INVENTORIES |
|
|
Raw materials |
|
|
Work in progress |
|
|
Finished goods |
|
|
Stock in trade (in respect of goods acquired for trading) |
|
|
Stores & Spares |
|
|
Loose Tools |
|
|
Others (Specify) |
|
|
Consumables |
|
|
Packing materials |
|
|
|
|
|
Total |
|
|
|
|
|
17. TRADE RECEIVABLES |
|
|
Secured - Considered Good |
|
|
Outstanding for more than six months |
|
|
Others |
|
|
|
|
|
Unsecured - Considered Good |
|
|
Outstanding for more than six months |
|
|
Others |
|
|
|
|
|
Unsecured - Considered Doubtful |
|
|
Outstanding for more than six months |
|
|
Others |
|
|
|
|
|
Other Trade Receivables |
|
|
Less : Provision for Doubtful Debts |
|
|
|
|
|
Total |
|
|
18. Cash & Cash Equivalents |
|
|
Cash in Hand |
|
|
Balance at Banks |
|
|
Total |
|
|
19. SHORT TERM LOANS & ADVANCES |
|
|
Given to Subsidiaries |
|
|
Given to Associates |
|
|
Given to Directors |
|
|
Given to Other Related Parties |
|
|
Given to Suppliers |
|
|
Given to Employees |
|
|
Other Long Term Loans & Advances |
|
|
Total |
|
|
|
|
|
20. OTHER CURRENT ASSETS |
|
|
Interest Accrued on Investments |
|
|
Unbilled Revenue |
|
|
Payment of Taxes |
|
|
Dividend Receivable |
|
|
Recoverable from government agencies |
|
|
Export Incentives Receivables |
|
|
Interest Income Accrued but Not Due |
|
|
Assets Held up Disposal |
|
|
Derivative Assets |
|
|
Prepaid Expenses |
|
|
Notes Receivable |
|
|
Claims Recoverable |
|
|
Other Receivables |
|
|
Total |
|
|
|
|
|
21. REVENUE FROM OPERATIONS |
|
|
Revenue from Sale of Products |
|
|
Export Sales |
|
|
Domestic Sales |
|
|
Revenue from Sale of Services |
|
|
Revenue from Contract |
|
|
Works Contract |
|
|
Revenue from Intangible Assets |
|
|
Patents Charges |
|
|
Revenue from Other Operations |
|
|
Other Income |
|
|
Total |
|
|
|
|
|
Less : Service Tax Collected |
|
|
Less : Other Duties & Taxes Collected |
|
|
Less : Inter Division Transfer |
|
|
Less : Brokerage Discounts & Rebates |
|
|
Less : Sales Return |
|
|
Less : Other Allowances & Deductions against Sales |
|
|
|
|
|
Total |
|
|
|
|
|
22. OTHER INCOME |
|
|
|
|
|
Rent Receipt |
|
|
Commission |
|
|
Dividend Income |
|
|
Interest Income |
|
|
Profit on sale of fixed assets |
|
|
Profit on sale of investment being securities chargeable to Securities Transaction Tax (STT) |
|
|
Profit on sale of other investment |
|
|
Profit on account of currency fluctuation |
|
|
Agriculture income |
|
|
Net gain / (loss) on sale of investment |
|
|
Other non operating income |
|
|
Other Income |
|
|
|
|
|
Total |
|
|
|
|
|
23. COST OF MATERIALS CONSUMED |
|
|
Raw Materials, Packing Materials, Stores & Spares |
|
|
Opening Stock |
|
|
Add: Purchases |
|
|
Add: Incidental Expenses on purchase |
|
|
Less: Purchase Returns |
|
|
Less: Closing Stock |
|
|
|
|
|
Total |
|
|
|
|
|
24. PURCHASE OF STOCK IN TRADE |
|
|
|
|
|
Traded Goods |
|
|
Finished Goods |
|
|
|
|
|
Total |
|
|
|
|
|
25. (INCREASE)/ DECREASE IN INVENTORIES |
|
|
Traded Goods |
|
|
Opening Stock |
|
|
Less: Closing Stock |
|
|
|
|
|
Finished Goods |
|
|
Opening Stock |
|
|
Less: Closing Stock |
|
|
|
|
|
Work in Progress |
|
|
Opening Stock |
|
|
Less: Closing Stock |
|
|
Total |
|
|
|
|
|
26. EMPLOYEE BENEFIT EXPENSES |
|
|
|
|
|
Salaries & Wages |
|
|
Overtime Wages |
|
|
Bonus |
|
|
Director’s Remuneration |
|
|
Managerial Remuneration |
|
|
Reimbursement of Medical Exp |
|
|
Leave Encashment |
|
|
Leave Travel Benefits |
|
|
Contribution to approved Superannuation fund |
|
|
Contribution to recognized Provident fund |
|
|
Contribution to recognized Gratuity fund |
|
|
Contribution to any other fund/ESI |
|
|
Any other benefit to employees in respect of which expenditure has been incurred. |
|
|
Gratuity |
|
|
Performance Pay |
|
|
Profit Share |
|
|
|
|
|
Total |
|
|
|
|
|
27. FINANCE COSTS |
|
|
|
|
|
Interest Expenses |
|
|
Other borrowing cost |
|
|
Net Loss / (Gain) on foreign currency transaction |
|
|
Forward cancellation |
|
|
Bank charges/Bank Guarantee Charges |
|
|
Total |
|
|
|
|
|
28. DEPRECIATION & AMORTISATION EXPENSE |
|
|
Depreciation Expense |
|
|
Amortization Expense |
|
|
Total |
|
|
29. OTHER EXPENSES |
|
|
|
|
|
Manufacturing & Service Cost |
|
|
Transportation charges/Freight |
|
|
Consumption of stores and spare parts: |
|
|
Oil |
|
|
Packing Materials |
|
|
Stores |
|
|
Other consumables |
|
|
Tools, Jigs & fixtures |
|
|
Power and fuel. (Electricity/Generator Exp) |
|
|
Repairs to buildings. |
|
|
Repairs to machinery |
|
|
Research & Development Expenditure |
|
|
Installation S/W |
|
|
Payment to Auditors |
|
|
As auditors - statutory audit |
|
|
For taxation matters |
|
|
For company law matters |
|
|
For management services |
|
|
For other services |
|
|
Reimbursement of expenses |
|
|
Selling/Marketing Expenses |
|
|
Sales promotion including publicity (other than advertisement) |
|
|
Advertisement |
|
|
Commission Paid |
|
|
Other Expenses |
|
|
Duties and taxes in respect of goods and services purchased |
|
|
Custom duty |
|
|
Countervailing duty |
|
|
Special additional duty |
|
|
Union excise duty |
|
|
Service tax |
|
|
VAT/ Sales tax |
|
|
Any other tax |
|
|
Rents |
|
|
Insurance |
|
|
Medical Insurance |
|
|
Life Insurance |
|
|
Key-man Insurance |
|
|
Other Insurance including factory, office, car, goods, etc |
|
|
Workmen and staff welfare expenses |
|
|
Entertainment |
|
|
Hospitality |
|
|
Conference |
|
|
Hotel, Boarding and Lodging |
|
|
Travelling expenses including foreign travelling |
|
|
Conveyance Expenses |
|
|
Telephone Expenses |
|
|
Guest House Expenses |
|
|
Club expenses |
|
|
Festival celebration expenses |
|
|
Scholarships |
|
|
Gift |
|
|
Donation |
|
|
Rates and taxes, paid or payable to Government or any local body (excluding taxes on income) |
|
|
Union Excise Duty |
|
|
Service Tax |
|
|
VAT/Sales Tax |
|
|
Cess |
|
|
Any other rate, tax, duty or cess |
|
|
Other Expenses |
|
|
Bad debts |
|
|
Provision for bad & doubtful debts |
|
|
Other Provisions |
|
|
|
|
|
30. PROVISION FOR TAX |
|
|
Tax Expense |
|
|
Deferred Tax expense |
|
|
Total |
|
|
