undefined | unit 2 final accounts

UNIT -2

Final Accounts

Question Bank

Q1) Dinkar Ltd. The authorized capital of is Rs. Divided into shares of 50,00,000 rupees. 100 each. The company solicited 40,000 shares and accepted 36,000 shares. All calls were made and received properly, except for the 500 shares where the last call to Rs was made. 20 was not received. The company confiscated 200 shares that did not receive the final call. Shows how equity capital appears on a company's balance sheet according to the (revised) Schedule VI Part I of the Companies Act 1956. Also, prepare "Accounting Note" in the same way.

A1)

In the books of Dinkar Ltd

Balance Sheet as at __________

Particulars	Note No.	Amount (Rs.)
I. Equity and Liabilities Shareholders’ funds a) Share capital	1	35,90,000

Notes to Accounts:

Particulars	Amount (Rs.)		Amount (Rs.)
1. Share capital Authorised share capital 50,000 equity shares of Rs. 100 each Issued capital 40,000 equity shares of Rs. 100 each Subscribed and fully paid up capital 35,500 equity shares of Rs. 100 each fully paid Subscribed but not fully paid-up capital 300 equity shares of Rs. 100 each fully called up Less: Calls-in-arrears (300 x 20) Add: Share forfeiture A/c (200 shares x Rs. 80)		30,000 (6,000) 24,000 16,000	50,00,000
			40,00,000
			35,50,000 40,000
			35,90,000

Q2) Show the following items in the balance sheet of Amba Ltd. as per revised schedule

VI as on March 31, 2013:	Rs.
8% Debentures	10,00,000
Equity share capital	50,00,000
Securities premium	20,000
Preliminary expenses	40,000
Statement of Profit & Loss (cr.)	1,50,000
Discount on issue of 8% debentures (Amount to be written in next 4 years approx.)	40,000
Loose tools	20,000
Bank balance	60,000
Cash in Hand	38000

A2)

In the Books of Amba Ltd

*Balance Sheet as on 31st March, 2013

Particulars	Note No.	Amount (Rs.)
I. Equity and Liabilities
1. Shareholders’ Funds
a) Share capital		50,00,000
b) Reserve and surplus	1	1,30,000
2. Non-current Liabilities
a) Long-term borrowings	2	10,00,000
II. Assets
1. Non-current assets
a) Other non-current assets	3	30,000
2. Current assets
a) Inventories	4	20,000
b) Cash and cash equivalents	5	98,000
c) Other current assets	6	10,000

*Relevant items only

Notes to Accounts:

Reserve and surplus

Securities premium 20,000

Less: Preliminary expenses (40,000)

Statement of profit and loss

2. Long term borrowings

8% debentures

3. Other non-current assets

Discount on issue of 8% debentures ( of Rs. 40,000)

4. Inventory

Loose tools

5. Cash and cash equivalents

Bank balance

Cash in hand

6. Other current assets

Discount on issue of 8% debentures

(40000/4)

(20,000)

1,50,000

60,000

38,000

1,30,000

10,00,000

30,000

20,000

98,000

10,000

Important points:

Preliminary expenses are to be written-off completely in the year in which such expenses are incurred. They should be written-off first from securities premium and the balance if any, from statement of profit & loss.

Borrowing costs such as discount on issue of debentures could be written- off over loan

Q3) Sunfill Ltd as of March 31, 2013. On your balance sheet, display the following items according to the (revised) Schedule VI, Part I of the Companies Act 1956:

Particulars Amount (Rs.)

General Reserve (since 31 March 2012) 5,00,000

Statement of profit & loss (debit balance) for 2012-13 (3,00,000)

A3)

In the Books of Sunfill Ltd

*Balance Sheet as on 31st March, 2013

Particulars	Note No.	31st March 2012 (Rs.)	31st March 2013 (Rs.)
I. Equity and Liabilities 1. Shareholders’ Funds Reserve and surplus	1	2,00,000	5,00,000

Notes to Accounts:

Particulars	Amount (Rs.)
1. Reserve and surplus
General Reserve (1 April, 2012)	5,00,000
Less: Statement of profit and loss (Dr Balance)	(3,00,000)

	2,00,000

Q4) From the given particulars of Shine and Bright Co. Ltd. as at March 31, 2013, prepare balance sheet in accordance to the (revised) Schedule VI:

Particulars	Amount Rs.	Particulars	Amount Rs.
Preliminary expenses	2,40,000	Goodwill	30,000
Discount on Issue of shares	20,000	Loose Tools	12,000
10% Debentures	2,00,000	Motor vehicles	4,75,000
Stock in trade	1,40,000	Provision for tax	16,000
Cash at bank	1,35,000
Bills receivables	1,20,000

A4)

In the books of Shine & Bright Ltd

Balance Sheet as at 31st March, 2013

	Notes	Current Year	Previous Year
	Notes	(in Rs.)	(in Rs.)
EQUITY AND LIABILITIES
Non-current Liabilities
Long Term Borrowings	1	2,00,000

Current Liabilities
Short Term Borrowings	2	16,000

Total

ASSETS
Non-current Assets
Fixed Assets	3
Tangible Assets		4,75,000
Intangible Assets		30,000
Other Non-current Assets	4	2,60,000

Current Assets
Inventories	5	1,50,000
Trade Receivables	6	1,20,000
Cash and Cash Equivalents	7	1,35,000

Total

Notes to accounts:

Long Term Borrowings
10% Debentures		2,00,000
2. Short Term Borrowings
Provision for Taxation		16,000
3. Fixed Assets
Tangible
Motor Vehicle	4,75,000
Intangible
Goodwill	30,000	5,05,000
4. Other Non-current Assets
Preliminary expenses	2,40,000
Discount on Issue of shares	20,000	2,60,000
5. Inventories
Stock in Trade	1,40,000
Loose Tools	12,000	1,52,000
6. Trade Receivables
Bills Receivable		1,20,000
7. Cash and Cash Equivalents
Cash at Bank		1,35,000

*It has been assumed that discount on issue of debentures is not written-off in the next 12 months of the reporting period.

Q5) From the following particulars, prepare Statement of profit and loss for the year ending March 2013, as per the revised Schedule VI:

Balances	Rs.	Rs.
Plant and Machinery	1,60,000
Land	6,74,000
Depreciation on Plant and Machinery	16,000
Purchases (Adjusted)	4,00,000
Closing stock	1,50,000
Wages	1,20,000
Sales (Net)		10,00,000
Salaries	80,000
Bank overdraft		2,00,000
10% debentures (issued on 1st April, 2012)		1,00,000
Equity share capital– shares of Rs. 100 each (fully paid)		2,00,000
Preference share capital– 1,000; 6% shares of Rs. 100 each (fully paid)		1,00,000

	16,00,000	16,00,000

Additional information

(i) Equity dividend @ 10% declared on paid up capital.

(ii) Dividend on the preference share capital paid in full.

(iii) Rs. 2,00,000 transferred to general reserve.

A5)

Statement of Profit & Loss for the year ended 31st March, 2013

Particulars	Note No.	Amount (Rs.)
Income Revenue from operations (Sales) Total II. Expenses Cost of materials consumed (Adjusted purchase) Employees benefit expenses Finance cost Depreciation and amortization Total Profit before tax (I-II)	1	10,00,000
		10,00,000
		4,00,000 2,00,000 10,000 16,000
		6,26,000
		3,74,000

Notes to Accounts:

Particulars	Amount Rs.	Amount Rs.
Employee Benefit Expenses
(i) Wages	1,20,000
(ii) Salary	80,000	2,00,000

Q6) Given is the Trial Balance of Marathon Limited as on 31st March, 2012. You are required to prepare the Profit and loss Account and Balance Sheet on 31st March, 2012

		Dr.	Cr.
Authorized Share capital divided into 8,000, 6% preference shares of Rs100 each and 20,000 equity shares of Rs100 each			28,00,000
Subscribed Capital
5,000 6% preference shares of Rs100 each			5,00,000
Equity Share Capital			8,00,000
Capital Reserve			5,000
Purchases - Coco, Tea, Coffee		58,800
- Bakery products		36,200
Wages and Salary		15,300
Rent, Rates and Taxes		8,900
Laundry		750
Sales - Coco, Tea and Coffee			82,000
- Bakery products			44,000
Coal and Firewood		3,290
Carriage		810
Sundry Expenses		5,840
Advertising		8,360
Repair		4,250
Rent of Rooms			48,000
Receipt from Billiards			5,700
Miscellaneous Receipts			2,800
Discount Received			3,300
Transfer Fee			700
Freehold Land and Building		8,50,000
Furniture and Fittings		86,300
Stock on hand, 1st April, 2011
Coco, Tea, Coffee		12,800
Bakery products		5,260
Cash in Hand		2,200
Cash with Bank		76,380
Preliminary Expenses		8,000
2000, 8% debentures of Rs100 each			2,00,000
Profit and Loss Account			41,500
Sundry Creditors			42,000
Sundry Debtors		19,260
Investment		2,72,300
Goodwill at Cost		5,00,000
General Reserve			2,00,000
		19,75,000	19,75,000
	Additional information:
	Wages and Salaries outstanding Rs 4,280 Stock as on 31st march, 2012 Coco, Tea & Coffee Rs 22,500 Bakery Products Rs 16,400 3. Provide 5% depreciation on Furniture and Fittings and 2% on Land and Building

The equity capital on 1st April, 2011 stood at Rs 7, 20,000, that is 6,000 shares fully paid and 2,000 shares of Rs 60 paid. The directors made a call of Rs 40 per share on 1st October, 2011. A shareholder could not pay the call on 100 shares and his shares were then forfeited and reissued at Rs 90 per share as fully paid. The director proposes a dividend of 8% on equity shares, transferring any amount that may be required from general reserve. Ignore taxation.

A6)

In the books of Marathon and Limited

Balance Sheet as on 31st March, 2012

	Notes	Current Year
	Notes	(in Rs.)
EQUITY AND LIABILITIES
Shareholders Fund
Share Capital	1	13,00,000
Reserves & Surplus	2	1,75,745
Money Received against Warrants

Share Application Money pending allotment

Non-current Liabilities
Long Term Borrowings	3	2,00,000

Current Liabilities
Trade Payables	4	46,280
Short Term Provisions	5	1,10,000

Total		18,32,025

ASSETS
Non-current Assets
Fixed Assets	6
Tangible Assets		9,14,985
Intangible Assets		5,00,000
Non-current Investments		2,72,300

Current Assets
Inventories	7	38,900
Trade Receivables		19,260
Cash and Cash Equivalents	8	78,580
Other Current Assets	9	8,000

Total		18,32,025

Profit and Loss Account for the year ended on 31st March, 2012

Particulars	Notes	Amount (Rs)
I Revenue from Operations	10	1,79,700
II Other Receipts	11	6,800
III Total Revenue (I + II)		1,86,500
IV Expenses
Purchase of Stock in Trade	12	95,000
Change in Inventories of Finished Goods	13	(20,840)
Employee Benefit Expenses	14	19,580
Finance Costs	15	16,000
Depreciation and Amortization Expenses	16	21,315
Other Operating Expenses	17	32,200
Total expenses		1,63,255

V Profit(Loss) for the period (III-IV)		23,245
Balance from Previous Years		41,500
Transfer from General Reserve		29,255
Less: Proposed Dividend
- Preference Share Capital @6%		30,000
- Equity Share Capital @ 8%		64,000
Profit (Loss) carried to Balance Sheet		0

Notes to Accounts

Particulars	Current Year	Previous Year
1. SHARE CAPITAL
Authorised Share Capital :
20,000, Equity Shares of Rs.100 each	20,00,000
8,000, 6% Preference Shares of Rs. 10 each	8,00,000	28,00,000
Issued Subscribed and Paid Up Capital :
8,000, Equity Shares of Rs.100 each	8,00,000
5,000, 6% Preference Shares of Rs. 10 each	5,00,000
Total		13,00,000

2. RESERVES & SURPLUS
Capital Reserve		5,000
General Reserve	2,00,000
Less: Amount used to pay dividend(Equity + Preference)	(29,255)	1,70,745

Total		1,75,745

3. LONG TERM BORROWINGS
2,000, 8% Debentures of Rs 100 each		2,00,000

4. TRADE PAYABLES

Sundry Creditors		42,000
Wages & Salaries Outstanding		4,280

Total		46,280

5. SHORT TERM PROVISIONS
Interest on debentures		16,000
Proposed Dividend- Preference		30,000
Proposed Dividend- Equity		64,000

Total		1,10,000

6. FIXED ASSETS
Tangible
Freehold Land & Building	8,50,000
Less: Depreciation	(17,000)	8,33,000

Furniture	86,300
Less: Depreciation	(4,315)	81,985
		9,14,985
Intangible Assets
Goodwill		5,00,000

Total Assets		14,14,985

7. INVENTORIES
Coco, Tea & Coffee		22,500
Bakery Products		16,400

Total		38,900

8. Cash & Cash Equivalents
Cash in Hand		2,200
Balance at Banks		76,380

Total		78,580

9. OTHER CURRENT ASSETS
Preliminary & Formation Expense		8,000

10. REVENUE FROM OPERATIONS
Revenue from Sale of Products
- Coco, Tea & Coffee	82,000
- Bakery Products	44,000	1,26,000
Revenue from Sale of Services
- Rent of Rooms	48,000
- Receipt from Billiars	5,700	53,700

Total		1,79,700

11. OTHER INCOME

Miscellaneous Receipts		2,800
Discount Received		3,300
Transfer Fee		700

Total		6,800

12. PURCHASE OF STOCK IN TRADE

Coco, Tea and Coffee		58,800
Bakery Products		36,200

Total		95,000

13. (INCREASE)/ DECREASE IN INVENTORIES
Coco, Tea, Coffee
Opening Stock	12,800
Less: Closing Stock	(22,500)	(9,700)

Bakery Products
Opening Stock	5,260
Less: Closing Stock	(16,400)	(11,140)

Total		(20,840)

14. EMPLOYEE BENEFIT EXPENSES

Wages & Salaries		15,300
Add: Outstanding Wages and Salaries		4,280
		19,580
Total

15. FINANCE COSTS

Interest on Debentures		16,000

16. DEPRECIATION & AMORTISATION EXPENSE
Land & Building		17,000
Furniture & Fittings		4,315
Total		21,315

17. OTHER EXPENSES
Rent Rates and Taxes		8,900
Coal and Firewood		3,290
Laundry		750
Carriage		810
Repair		4,250
Sundry Expenses		5,840
Advertising Expense		8,360
Total		32,200

Q7) You are required to prepare financial statements from the following trial balance of Mehul Company Ltd. for the year ended 31st March, 2012

Mehul Company Ltd.

Trial Balance as at 31st March, 2012

Particulars	Rs	Particulars	Rs
Stock	68,000	Equity Shares Capital(Shares of Rs10 each)	2,50,000
Furniture & Fixtures	50,000	11% Debentures	50,000
Discount	4,000	Bank Loans	64,500
Loan to Directors	8,000	Bills Payable	12,500
Advertisement	2,000	Creditors	15,600
Bad Debts	3,500	Sales	4,26,800
Commission	12,000	Rent Received	4,600
Purchases	231,900	Transfer Fees	1,000
Plant and Machinery	86,000	Profit & Loss Appropriation Account	13,900
Rentals	2,500	Provision for Depreciation on Plant & Machinery	14,600
Current Account	4,500
Cash	800
Interest on Bank Loan	11,600
Preliminary Expenses	1,000
Wages	90,000
Consumables	8,400
Freehold Land	1,54,600
Tools and Equipments	24,500
Goodwill	26,500
Debtors	28,700
Bills Receivables	15,300
Dealer Aids	2,100
Transit Insurance	3,000
Trade Expenses	7,200
Distribution Freight	5,400
Debentures Interest	2,000
	8,53,500		8,53,500

Additional Information:

Closing stock as on 31st March, 2012, Rs 82,300

Depreciation on furniture & fixtures @5%, Freehold land @2% and Tools & Equipment’s @ 5% to be provided.

A7)

In the books of Mehul Company Ltd

Balance Sheet as on 31st March, 2012

Particulars	Note	Amount (Rs)
I Equity and Liabilities
1. Shareholders’ Fund
(a) Share Capital	1	2,50,000
(b) Reserve and Surplus	2	68,183
2. Non-Current Liabilities
(a) Long Term Liabilities	3	1,14,500
3. Current liabilities
(a) Trade Payables	4	28,100
TOTAL		4,60,783
II Assets
1. Non-Current Assets
(a) Fixed Assets
(i) Tangible Fixed Assets	5		2,93,683
(ii) Intangible Assets (Goodwill)			26,500
2. Current Assets
(a) Inventories			82,300
(b) Trade Receivables			28,700
(c) Cash and Cash Equivalents	6		5,300
(d) Short Term Loan and Advances	7		23,300
(e) Other Current Assets			1,000
TOTAL			4,60,783

Statement of Profit & Loss for the year ended 31st March, 2012

Particulars Notes	Amount (Rs)
I Revenue from Operations	4,26,800
II Other Receipts 8	5,600
III Total Revenue (I + II)	4,32,400
IV Expenses
Purchase of Stock in Trade 9	2,31,900
Change in Inventories of Finished Goods 10	(14,300)
Employee Benefit Expenses 11	90,000
Finance Costs 12	13,600
Depreciation and Amortization Expenses 13	6,817
Other Operating Expenses 14	50,100

Total Expenses	3,78,117
V Profit (Loss) for the Period (III-IV)	54,283
Balance from Previous Years	13,900
Profit (Loss) carried to Balance Sheet	68,183

Notes to Accounts:

Notes to the Financial Statements

Share Capital
Authorized Share Capital
25,000 equity shares of 10 each			2,50,000

Issued and subscribed
25,000 equity shares of 10 each			2,50,000
			2,50,000

2. Reserves & Surplus
Profit & Loss- Opening Balance			13,900
Add: Current Year’s Profit			54,283
			68,183
3. Long Term Borrowings
11% Debentures of 100 each			50,000
Bank Loan			64,500
			1,14,500
4. Trade Payables
Sundry Creditors			15,600
Bills Payables			12,500
			28,100
5. Tangible Assets
	Book Value	Depreciation	Net value
Freehold Land and Building	1,54,600	3,092	1,51,508
Furniture and Fixtures	50,000	2,500	47,500
Plant and Machinery	86,000	14,600	71,400
Tools and Equipment’s	24,500	1,225	23,275
	3,15,100	14,600	2,93,683
6. Cash and Cash Equivalents
Cash at Bank			4,500
Cash in Hand			800
			5,300
7. Short Term Loans and Advances
Loan to Directors			8,000
Bills Receivables			15,300
			23,300
8. Other Income
Rent Received			4,600
Transfer Fee			1,000
			5,600
9. Purchase of Stock in Trade Purchases			2,31,900
10. Change in Inventories of Finished Goods
Closing Stock			82,300
Less : Opening Stock			(68,000)
			14,300
11. Employee Benefit Expenses Wages				90,000
12. Finance Expenses Interest on Bank Charges				11,600
13. Depreciation and Amortization Expenses Freehold Land and Building				3,092
Furniture and Fixtures				2,500
Tools and Equipment’s				1,225
				6,817
14. Other Operating Expenses Consumables				8,400
Bad Debts				3,500
Discount				4,000
Rentals				2,500
Commissions				12,000
Dealer’s Aid				2,100
Transit Insurance				3,000
Trade Expenses				7,200
Distribution Freight				5,400
Advertisements				2,000
				50,100

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