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MODULE - 3
UNIT – 1
FINAL ACCOUNTS OF JOINT STOCK COMPANIES
Question 6
Statement of Profit and Loss
for the year ended 31-03-2018
Particulars Note No. ` In Lakhs
I. Revenue from Operations 260
II. Other Income 6
III. Total Revenue (I + II) 266
IV. Expenses
Cost of Materials Consumed 50
Changes in Inventories 6
Employee Benefit Expenses 10
Finance Costs 15
Depreciation and Amortization Expense 40
Other Expenses 90
V. Total Expenses 211
V. Profit Before Tax 55
VI. Tax Expense @ 30% 16.5
VII. Profit for the Period 38.5
Question 7
Notes to Accounts
1. Revenue from Operations
Particulars ` in 000’s
Sales 2,730
From other Operating Revenues 60
Less: Excise Duty (185)
2,605
2. Other Income
Particulars ` in 000’s
Interest Income 20
Dividents from Companies 10
Net gain on sale of investments 4
Rental income (15-1) 14
48
Question 8
Notes to Accounts
Employee Benefit Expenses
Particulars ` in lacs
Salaries 250
Wages including outstanding 200
Contribution to PF 200
Contribution to Gratuity 72
Staff welfare expenses 150
Expenses on ESPP 28
900

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Finance Costs
Particulars ` in lacs
Interest expense 25
Brokerage 5
Interest on debentures 6
36
Question 9
Ananya Ltd
Balance Sheet as at 31-03-2018
Particulars Note `
No.
I. Equity and Liabilities
(1) Shareholders Funds:
(a) Share Capital 69,93,000
(b) Reserves and Surplus 26,47,400
(2) Non-Current Liabilities
(a) Long term Borrowings 16,97,000
(3) Current Liabilities
(a) Trade payables 14,00,000
(b) Other current liabilities 2,00,000
(c) Short term Provisions 3,25,500
Total 1,32,62,900
II. Assets
(1) Non Current Assets
(a) Fixed Assets
(i) Tangible Assets 74,75,000
(ii) Intangible Assets 4,00,000
(2) Current Assets
(a) Inventories 17,50,000
(b) Trade Receivables 14,00,000
(c) Cash and Cash Equivalents 19,39,000
(d) Short-term Loans and Advances 2,98,900
Total 1,32,62,900

Essays and Problems

Question 1
Statement of Profit and Loss of Microns Ltd. for the year ended 31-03-2018
Particulars Note No. ` In Lakhs
I. Revenue from Operations 1 7,57,200
II. Other Income 2 700
III. Total Income 7,57,900

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IV. Expenses:
Purchase of stock on trade 2,50,000
Changes in Inventories 3 28,000
Employee Benefits Expenses 4 9,000
Finance Costs 5 20,000
Depreciation and Amortization Expense 6 35,000
Other Expenses 7 47,500
V. Total Expenses 3,89,500
V. Profit Before Tax 3,68,400
VI. Tax Expense @ 30% 1,10,520
VII. Profit for the Period 2,57,880
⎡ 2,57,880 ⎤
VIII. Basic Earnings per share ⎢ 1,00,000 ⎥ 2.58
⎣ ⎦

Notes to Accounts
1. Revenue from Operations
Particulars `
Sales 7,50,000
Add: Other operating/revenues (Trading commission) 8,000
Less: Excise Duty 800
7,57,200

2. Other Income
Particulars `
Transfer fees received 700
700

3. Changes in Inventory
Particulars `
Opening stock 68,000
Less: Closing stock 40,000
28,000

4. Employee Benefits Expense

Particulars `
Salaries and Wages 9,000
9,000

5. Finance costs
Particulars `
Interest expenses 12,000
Other Borrowing cost 4,000
Debenture interest 4,000
20,000

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6. Depreciation and Amortization Expenses
Particulars `
Plant and equipments (@ 20%) 20,000
Building (@ 5%) 10,000
Furniture and fittings (@ 10%) 5,000
35,000

7. Other Expenses
Particulars `
Discount 8,000
Advertisement 4,000
Bad debt 3,500
Commission 12,000
Rentals 3,000
Dealer aids 7,000
Distribution freight 4,000
Power and fuel 1,000
Transit insurance 1,000
Provision for bad debt (10% of 40,000) 4,000
47,500

Question 2
Bharath Ltd
Balance Sheet as at 31-03-2015
Particulars Note `
No.
I. Equity and Liabilities
(1) Shareholders Funds:
(a) Share Capital 1 2,50,000
(b) Reserves and Surplus 3 1,10,000
(2) Non-Current Liabilities
(a) Long term Borrowings (Bank Loan) 82,000
(3) Current Liabilities
(a) Trade payables 4 1,04,000
(b) Other current liabilities 1,000
(Unclaimed Dividend)
(c) Short term Provisions 5 30,000
Total 5,77,000
II. Assets
(1) Non-Current Assets
(a) Fixed Assets 1,20,000
(i) Tangible Assets
(ii) Intangable Assets

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(2) Current Assets

(a) Inventories (stock) 2,90,000
(b) Trade Receivables (Debtors) 1,42,000
(c) Cash and Cash Equivalents 11,000
(d) Other Current Assets 14,000
(Prepaid expense)
Total 5,77,000

Notes to Accounts
1. Share Capital
Particulars `
Authorised capital:
50,000 shares of ` 10 each 5,00,000
Issued and paid up capital 25,000 shares of ` 10 each 2,50,000

2. Surplus
Particulars `
Opening Balance 26,000
Add: Profit for the period 64,000
Less: Transfer to Reserves (30,000)
Less: Proposed Dividend (25,000)
Less: Corporate Dividend Tax @ 20% of 25,000 (5,000)
Closing balance 30,000

3. Reserves and Surplus

Particulars `
General Reserve (50,000 + 30,000) 80,000
Surplus Account (Note 2) 30,000
1,10,000

4. Trade payables
Particulars `
Sundry creditors 88,000
Bills payable 16,000
1,04,000

5. Short term Provisions

Particulars `
Proposed Dividend 25,000
Proposed CDT 5,000
30,000

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6. Tangible Assets
Particulars `
Plant and Machinery 29,000
Land and Building 91,000
1,20,000

Question 3
DELL Ltd
Statement of profit and Loss
for the year ending
31-03-2018
Particulars Note `
No.
I. Revenue from Operations 3,50,000
II. Other Income (Discount) 5,000
III. Total Income 3,55,000
IV. Expenses
Purchases 2,45,000
Changes in Inventories 1 (7,000)
Employee Benefits Expense 2 57,500
Depreciation and Amortisation expenses 3 5,083
Other Expenses 4 12,000
Total Expenses 3,12,583
V. Profit before Tax (III – IV) 42,417
VI. Tax Expense 21,209
VII. Profit after Tax 21,208

Notes to Accounts
1. Changes in Inventories
Particulars `
Opening stock 75,000
Less: Closing stock 82,000
(7,000)
2. Employee Benefits Expense
Particulars `
Wages 50,000
Salaries 7,500
57,500

3. Depreciation and Amortisation Expense

Particulars `
Depreciation on Plant and Machinery 2,900
Amortisation on patent and trade marks 483
Depreciation on furniture 1,700
5,083

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4. Other Expenses
Particulars `
Rent 4,950
Sundry Expenses 7,050
12,000

DELL Ltd
Balance sheet as at 31-03-2018
Particulars Note `
No.
I. Equity and Liabilities
(1) Shareholders Funds:
(a) Share Capital 1 1,00,000
(b) Reserves and Surplus 42,738
(2) Current Liabilities
(a) Trade payables (Creditors) 17,500
(b) Short-term provisions (Provision for tax) 21,209
Total 1,81,447
II. Assets
(1) Non-Current Assets
(a) Fixed Assets
(i) Tangible Assets 2 41,400
(ii) Intangable Assets 3 4,347
(2) Current Assets
(a) Inventories (stock) 82,000
(b) Trade Receivables (Debtors) 37,500
(c) Cash and Cash Equivalents 16,200
Total 1,81,447

Notes to Accounts
1. Reserves and Surplus
Particulars `
General Reserve 15,500
Surplus Account:
Opening Balance 15,030
Add: Profit for the year 21,208
Less: Dividends paid (9,000) 27,238
42,738

2. Tangible Assets
Particulars `
Plant and Machinery 29,000
Less: Depreciation 2,900 26,100
Furniture and Fittings 17,000
Less: Depreciation 1,700 15,300
41,400

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3. Intangible Assets
Particulars `
Patent and Trade Marks 4,830
Less: Amortisation 483 4,347

Essays and Problems

Question 4
Supermax Ltd.
Statement of Profit and Loss for the year
ended 31.03.2014
Particulars Note `
No.
I. Revenue from Operations 1 3,26,200
II. Other Income (Discount received) 2,200
III. Total Income 3,28,400
IV. Expenses
Purchases 2,20,000
Changes in inventories 2 29,000
Employee Benefit Expenses 3 30,700
Finance cost (Bank interest) 850
Other Expenses 4 13,950
Total Expenses 2,94,500
V. Profit before Tax (III–IV) 33,900
VI. Tax Expense 2,500
VII. Profit after Tax 31,400

Notes to Accounts
Note 1. Revenue from Operatons
Particulars `
Sales 3,30,000
Less: Sales Returns 3,800
3,26,200

Note 2. Changes in Inventories

Particulars `
Opening stock 51,000
Less: Closing stock 22,000
29,000

Note 3. Employee Benefit Expenses

Particulars `
Wages 12,000
Salaries 18,700
30,700

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Note 4. Other Expenses
Particulars `
General expenses 1,800
Travelling expenses 3,200
Advertising 1,550
Rent and Taxes 4,900
Bad Debt 2,500
13,950

Supermax Ltd.
Balancesheet
Particulars Note `
No.
I. EQUITY AND LIABILITIES
(1) Shareholders Funds:
(a) Share Capital 80,000
(b) Reserves and Surplus 1 33,957
(2) Non-Current Liabilities
(a) Long term Borrowings 75,000
(3) Current Liabilities
(a) Trade payables 55,500
(b) Short term provisions 2 16,943
Total 2,61,400
II. ASSETS
(1) Non-current Assets
(a) Fixed Assets
(i) Tangible Assets 1,93,000
(2) Current Assets
(a) Inventories (Stock) 22,000
(b) Trade Receivables (Debtors) 45,000
(c) Cash and Cash Equivalents (cash) 1,400
Total 2,61,400
There is a difference of ` 11,000 in the B/s total given in the text book due to
change in the treatment of preliminary expenses. Right answer is ` 2,61,400.
Notes to Accounts
Note 1. Reserves and Surplus
Particulars `
Reserve Fund (23,000 + 10,000) 33,000
Surplus Account:
Balance at the beginning 5,000
Add: Profits for the period 31,400
36,400
Less: Transfer to reserve fund (10,000)
Less: Proposed dividend 26,400
⎛ 15 ⎞
⎜ 80,000 × ⎟ (12,000)
⎝ 100 ⎠
Less: Corporate Dividend (2,443) 11,957
⎛ 20.358 ⎞
Tax ⎜12,000 × 100 ⎟
⎝ ⎠
Less: Preliminary expenses (11,000)
33,957

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Note 2. Short Term Provisions
Particulars `
Provision for taxation 2,500
Proposed dividend 12,000
Provision for Corporate Dividend Tax 2,443
16,943

Note 3. Tangible Assets

Particulars `
Buildings 95,000
Plant and Machinery 98,000
1,93,000

Question 5
Nocil Ltd.
Statement of Profit and Loss
for the year ended 31.03.2018
Particulars Note `
No.
I. Revenue from Operations 3,70,000
II. Other Income 1 10,000
III. Total Income 3,80,000
IV. Expenses
Purchases 1,22,000
Changes in inventories 2 (94,000)
Employee Benefit Expenses 3 1,00,000
Depreciation and Amortisation Expenses (3,00,000 × 10100 ) 30,000
Other Expenses 4 22,000
Total Expenses 1,80,000
V. Profit before Tax 2,00,000
VI. Tax Expense 50,000
VII. Profit after Tax 1,50,000
Notes to Accounts
Note 1. Other Income
Particulars `
Interest Received 5,000
Add: Interest accrued 5,000
10,000

Note 2. Changes in Inventories

Particulars `
Closing stock 1,26,000
Less: Opening stock 32,000
(94,000)

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Note 3. Employee Benefit Expenses
Particulars `
Wages 18,000
Salaries 82,000
1,00,000

Note 4. Other Expenses

Particulars `
Office Expenses 10,000
Rent and Taxes 12,000
22,000
Nocil Ltd.
Balance sheet as 31.03.2018
Particulars Note `
No.
I. EQUITY AND LIABILITIES
(1) Shareholders Funds
(a) Share Capital 5,00,000
(b) Reserves and Surplus 1 3,14,821
(2) Non-Current Liabilities –––
(3) Current Liabilities
(a) Trade payables 1,00,000
(b) Short term provisions 2 1,10,179
Total 10,25,000
II. ASSETS
(1) Non-current Assets
(a) Fixed Assets
(i) Tangible Assets (3,00,000 – 30,000) 2,70,000
(ii) Intangible Assets (Good will) 2,60,000
(b) Non Current Investments 2,00,000
(2) Current Assets
(a) Inventories (Stock) 1,26,000
(b) Trade Receivables (Debtors) 34,000
(c) Cash and Cash Equivalents 1,30,000
(d) Other Current Assets (Interest accrued) 5,000
Total 10,25,000
Notes to Accounts
Note 1. Reserves and Surplus
Particulars `
General Reserve 1,25,000
Surplus Account 1,00,000
Add: Profit for the period 1,50,000
2,50,000
Less: Proposed divided (50,000)
⎛ 20.358 ⎞
Less: Corporate Dividend Tax ⎜ 50,000 × 100 ⎟ (10,179) 1,89,821
⎝ ⎠
3,14,821

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Note 2. Short Term Provisions
Particulars `
Provision for taxation 50,000
Proposed dividend 50,000
Provisions for Corporate Dividend Tax 10,179
1,10,179

Question 6
Sreeram Ltd
Statement of Profit and Loss
for the year ended 31-03-2018
Particulars Note `
No.
I. Revenue from Operations 36,17,000
II. Other Income 1 36,500
III. Total Income 36,53,500
IV. Expenses
Purchases 12,32,500
Changes in Inventories 2 (43,000)
Employee Benefits Expense 3 13,93,000
Finance costs 4 1,11,000
Depreciation and Amorisation Expense 5 1,20,000
Other Expenses 6 4,40,000
Total Expenses 32,53,500
V. Profit before Tax (III – IV) 4,00,000
VI. Tax Expense @ 30% (1,20,000)
VII. Profit after Tax 2,80,000
Notes to Accounts
1. Other Income
Particulars `
Transfer Fees 6,500
Rental Income 30,000
36,500

2. Changes in Inventories
Particulars `
Opening stock 6,65,000
Less: Closing stock (7,08,000)
(43,000)

3. Employee Benefit Expenses

Particulars `
Wages 13,68,000
Add: Outstanding 25,000
13,93,000

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4. Finance costs
Particulars `
Interest on bank OD 91,000
Interest on Debentures 10,000
Outstanding debenture interest 10,000
1,11,000
Note 5. Derpeciation and Amortisation Expenses
Particulars `

Plant and Machinery (7,50,000 × 5100 ) 37,500

Engineering Tools (1,50,000 × 20100 ) 30,000

Furniture and Fixtures (1,50,000 × 10 100 ) 15,000

Patent (3,75,000 × 10 100 ) 37,500

1,20,000

Note 6. Other Expenses

Particulars `
Carriage inwards 57,500
Discount and Rebates 30,000
Advertisement 15,000
Rent 55,000
Repairs to building 46,500
Preliminary expenses 10,000
Commission and Brokerage 67,500
Business Expenses including outstanding 92,000
Bad Debts (25,500 + 16,000) 41,500
Provision for doubtful debts [10% of (2,66,000 – 16,000)] 25,000
4,40,000

Sreeram Ltd.
Balance sheet as at 31.03.2018
Particulars Note `
No.
I. EQUITY AND LIABILITIES
(1) Shareholders Funds
(a) Share Capital 1 19,90,000
(b) Reserves and Surplus 2 60,440
(2) Non-Current Liabilities
(a) Long term Borrowings (Debentures) 5,00,000

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(3) Current Liabilities

(a) Trade payables
(Sundry creditors) 2,40,500
(b) Other Current Liabilities 3 8,28,000
(d) Short term provisions 4 4,06,560
Total 40,25,500
II. ASSETS
(1) Non-Current Assets
(a) Fixed Assets
(i) Tangible Assets 5 22,37,500
(ii) Intangible Assets 6 7,12,500
(2) Current Assets
(a) Inventories (stock) 7,08,000
(b) Trade Receivables 7 3,59,500
(c) Cash and Cash Equivalents 8 28,000
Total 40,25,500
Notes to Accounts
Note 1. Share Capital
Particulars `
Authorised capital (5,00,000 × ` 10) 50,00,000
Issued capital (2,00,000 × ` 10) 20,00,000
Less: Calls unpaid (5,000 × 2) (10,000)
19,90,000

Note 2. Reserves and Surplus

Particulars `
Debenture Redemption Reserve 50,000
General Reserve 7,000
Surplus Account:
Opening Balance 67,000
Add: Profit for the period 2,80,000
Less: Transfer to reserves @ 25% (2,80,000 × 2.5100 ) (7,000)
Less: Proposed equity dividend (12% of 1,90,00,000) (2,38,800)
Less: Dividend Distribution Tax (20% of 2,38,800) (47,760)
Less: Debenture Redemption Reserve (10% of 5,00,000) (50,000) 3,440
60,440

Note 3. Other Current Liabilities

Particulars `
Bank overdraft 7,57,000
Outstanding expenses (25,000 + 36,000) 61,000
Interest acrued on debentures 10,000
8,28,000

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Note 4. Short-term provisions
Particulars `
Provision for tax 1,20,000
Proposed equity dividend 2,38,800
Dividend Distribution Tax 47,760
4,06,560
Note 5. Tangible Assets
Particulars `
Land 12,50,000
Plant and Machinery (7,50,000 – 37,500) 7,12,500
Furniture and Fixtures (1,50,000 – 15,000) 1,35,000
Engineering Tools (1,50,000 – 30,000) 1,20,000
22,37,500
Note 6. Intangible Assets
Particulars `
Goodwill 3,75,000
Patent (3,75,000 – 37,500) 3,37,500
7,12,500

Note 7. Trade Receivables

Particulars `
Sundry Debtors (2,66,000 – 16,000) 2,50,000
Less: Provision for bad debt (25,000)
Bills Receivables 1,34,500
3,59,500
Note 8. Cash and Cash Equivalents
Particulars `
Bank balance 20,000
Cash balance 8,000
28,000

Question 7 Wintage Ltd.

Statement of Profit and Loss
for the year ended 31.03.2018
Particulars Note `
No.
I. Revenue from Operations 10,50,000
II. Other Income 1 16,050
III. Total Income (I + II) 10,66,050
IV. Expenses
Purchases 7,35,000
Changes in Inventory 2 (21,000)
Employee Benefit Expenses 3 1,72,500
Depreciation and Amortisation Expenses 8,700
Other Expenses 97,500
Total Expenses 9,92,700
V. Profit Before Tax (III – IV) 73,350
VI. Tax Expense 13,668
VII. Profit after Tax 59,682

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Notes to Accounts
Note 1. Other Income
Particulars `
Discount 15,000
Reserve for discount on creditors 1,050
16,050

Note 2. Changes in Inventories

Particulars `
Opening stock 2,25,000
Less: Closing stock 2,46,000
(21,000)

Note 3. Employee Benefit Expense

Particulars `
Productive wages 1,50,000
Salaries 22,500
1,72,500

Note 4. Other Expenses

Particulars `
Rent (14,850 + 1,350) 16,200
Discount 21,000
General Expenses (51,150 – 1,125) 50,025
Bad debt 4,650
Add: Provision on for bad debt 5,625 10,275
97,500
Wintage Ltd.
Balance sheet as 31.03.2018
Particulars Note `
No.
I. EQUITY AND LIABILITIES
(1) Shareholders Funds
(a) Share Capital 3,00,000
(b) Reserves and Surplus 1 51,967
(2) Current Liabilities
(a) Trade payables (52,500 – 1,050) 51,450
(b) Other Current Liabilities
(Outstanding rent) 1,350
(d) Short term provisions 2 85,883
Total 4,90,650

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II. ASSETS
(1) Non-Current Assets
(a) Fixed Assets
(i) Tangible Assets (87,000 – 8,700) 78,300
(2) Current Assets
(a) Inventories (stock) 2,46,000
(b) Trade Receivables (1,12,500 – 5,625) 1,06,875
(c) Cash and Cash Equivalents
(Cash at bank) 48,600
(d) Short term Loans and Advances 9,750
(Loan to MD)
(e) Other current assets 1,125
(Prepaid insurance)
Total 4,90,650
Notes to Accounts
Note 1. Reserves and Surplus
Particulars `
Reserves (46,500 + 2,984) 49,484
Surplus Account:
Opening balance 45,000
Add: Profit for the period 59,682
Less: Transfer to reserves (2,984)
Less: Dividend paid (27,000)
Less: Proposed Dividend (60,000) 2,483
less: Dividend Distribution Tax @ 20.358% (12,215)
51,967
Note 2. Short term Provisions
Particulars `
Provision for tax 13,668
Proposed dividend 60,000
Provision for CDT 12,215
85,883

Question 8
Federal Trading Company Ltd.
Statement of Profit and Loss
for the year ended 31.03.2018
Particulars Note `
No.
I. Revenue from Operations 1 1,76,200
II. Other Income 2 1,406
III. Total Income 1,77,606
IV. Expenses
Purchases (1,00,000 – 4,000) 96,000
Changes in inventories (30,000 – 40,000) (10,000)
Employee Benefit Expenses 3 22,600
Finance costs 4 5,000
Other Expenses 5 15,681
Total Expenses 1,29,281
V. Profit before Tax (III – IV) 48,325
VI. Tax Expense @ 30% 14,498
VII. Profit after Tax (V – VI) 33,827

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Notes to Accounts
Note 1. Revenue from Operations
Particulars `
Sales 1,80,000
Less: Retunrs (5,000)
Other Operating Revenue (Commission) 1,200
1,76,200

Note 2. Other Income

Particulars `
Discount received 1,000
Provision for discount on trade payables 406
1,406

Note 3. Changes in Inventories

Particulars `
Productive wages 20,000
Salaries 2,600
22,600

Note 4. Finance costs

Particulars `
Interest on debentures 2,500
Interest on debentures outstanding 2,500
5,000

Note 5. Other Expenses

Particulars `
Carriage inward 1,500
Carriage outward 900
Discount 1,200
Rent (1,650 + 150) 1,800
General expenses (5,500 – 1,000) 4,500
⎛ 5 ⎞
Provision for bad debt ⎜ 49,000 × 100 ⎟ 2,450
⎝ ⎠
Provision for discount on tade receivables ⎛⎜ 46,550 ×
2 ⎞
⎟ 931
⎝ 100 ⎠
Preliminary expenses written off 2,400
15,681

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Federal Trading Company Ltd.
Balance sheet as 31.03.2018
Particulars Note `
No.
I. EQUITY AND LIABILITIES
(1) Shareholders Funds
(a) Share Capital 1 1,98,000
(b) Reserves and Surplus 2 15,281
(2) Non-Current Liabilities
(10% debentures) 50,000
(3) Current Liabilities
(a) Trade payables 3 19,894
(b) Other Current Liabilities 4 2,650
(c) Short term provisions 5 40,344
Total 3,26,169
II. ASSETS
(1) Non-Current Assets
(a) Fixed Assets
(i) Tangible Assets 6 2,37,750
(2) Current Assets
(a) Inventory 40,000
(b) Trade Receivables 7 45,619
(c) Cash and Cash Equivalents 800
(d) Other Current Assets 8 2,000
Total 3,26,169
There is a difference of ` 4,800 in B/S Total given in the text book due to
change in the treatment of preliminary expenses. The right answer is ` 3,26,169.
Notes to Accounts
Note 1. Share capital
Particulars `
Subscribed and fully paid up capital 1,90,000
(1,900 shares of @ 100 each)
Subscribed but not fully paid up capital:
100 shares of ` 100 each 10,000
Less: Calls in Arrears 2,000 8,000
1,98,000

Note 2. Reserves and Surplus

Particulars `
Debenture Redemption Fund 10,000
General Reserve 5,000
Surplus Account 12,000
Add: Profit for the period 33,827
45,827

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Less: Transfer to reserves 5,000

Interim Dividend 9,900
Proposed dividend 19,800
(1,98,000 × 10%)
Corporate Dividend Tax 6,046
(29,700 × 20.358%) 5,081
20,081
Less: Preliminary expenses (4,800)
15,281
Note 3. Trade payables
Particulars `
Trade payables 20,300
Less: 2% provision for discount 406
19,894

Note 4. Other Current Liabilities

Particulars `
Rent Outstanding 150
Interest on Debentures outstanding 2,500
2650

Note 5. Short Term Provisions

Particulars `
Provision for Income Tax 14,498
Proposed dividend 19,800
Corporate Dividend Tax 6,046
40,344

Note 6. Tangible Assets

Particulars `
Buildings 1,50,000
Plant and Machinery 87,750
2,37,750

Note 7. Trade Receivables

Particulars `
Trade Receivables 50,000
Less: Advance for expenses (1,000)
Less: Provision for bad debt (2,450)
(5% of 46,550)
Less: Provision for discount (2% of 46,550) (931)
45,619

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Note 8. Other current Assets
Particulars `
Advance for expenses 1,000
Insurance prepaid 1,000
Total 2,000

Question 9
Appolo Trading Company Ltd
Statement of Profit and Loss
for the year ended 31.03.2018
Particulars Note `
No.
I. Revenue from Operations 41,50,000
II. Other Income –––
III. Total Income 41,50,000
IV. Expenses
Purchase of stock in trade 18,50,000
Changes in Inventory (7,50,000 – 9,50,000) (2,00,000)
Employee Benefit Expenses 1 11,82,050
Finance costs 2 3,60,000
Depreciation and Amortisation expenses 4,95,000
Other Expenses 3 1,02,950
Total Expenses 37,90,000
V. Profit before Tax (III – IV) 3,60,000
VI. Tax Expenses 1,80,000
VII. Profit after Tax (V – VI) 1,80,000

Notes to Accounts
Note 1. Employee Benefit Expenses
Particulars `
Wages 9,79,800
Salaries 2,02,250
11,82,050

Note 2. Finance Costs

Particulars `
Interest on Debentures 1,80,000
Add: Outstanding 1,80,000
3,60,000

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Note 3. Other Expenses
Particulars `
Bad Debt 21,000
Add: New provision 43,500
64,600
Less: Old provision 35,000 29,600
General Expenses 68,350
Share issue expenses written off 5,000
1,02,950

Appolo Trading Company Ltd.

Balance sheet as 31.03.2018
Particulars Note `
No.
I. EQUITY AND LIABILITIES
(1) Shareholders Funds
(a) Share Capital 1 39,25,000
(b) Reserves and Surplus 2 2,76,392
(2) Non-Current Liabilities
Long term borrowings (12% debentures) 30,00,000
(3) Current Liabilities
(a) Trade payables 3 7,70,000
(b) Other Current Liabilities 1,80,000
(Debenture interest outstanding)
(c) Shortterm provisions 4 4,96,108
Total 86,47,500
II. ASSETS
(1) Non-Current Assets
(a) Fixed Assets
(i) Tangible Assets 5 58,77,000
(ii) Intangible Assets (Goodwill) 2,50,000
(2) Current Assets
(a) Inventories 9,50,000
(b) Trade Receivables 6 8,26,500
(c) Cash and Cash Equivalents 7,44,000
Total 86,47,500
Note: There is a difference of ` 45,000 in the B/S total given in the text book due to
change in the treatment of preliminary expenses. The right answer is ` 86,47,500.
Notes to Accounts Note 1. Share Capital
Particulars `
Subscribed and fully paid up capital 39,00,000
(39,000 shares of ` 100)
Subscribed but not fully paid up capital
1,000 shares of ` 100 each 1,00,000 25,000
Less: Calls in arrear 75,000 39,25,000

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Note 2. Reserves and Surplus
Particulars `
General Reserve (2,50,000 + 9,000) 2,59,000
Surplus Account 6,00,000
Add: Profit for the period 1,80,000
7,80,000
Less: Transfer to Reserves (9,000)
Less: Interim dividend (3,92,500)
Less: Proposed dividend
[15% of 39,25,000 – 3,92,500] (1,96,250)
Less: Corporate Dividend Tax
(5,88,750 × 20.358%) (1,19,858) 62,392
Less: Share issue expenses (45,000)
2,76,392

Note 3. Trade payables

Particulars `
Trade payables 4,00,000
Bills payable 3,70,000
7,70,000

Note 4. Short term provisions

Particulars `
Provision for Income Tax 1,80,000
Proposed dividend 1,96,250
Corporate dividend tax 1,19,858
4,96,108

Note 5. Tangible Assets

Particulars `
Premises 30,72,000
Plant (33,00,000 – 4,95,000) 28,05,000
58,77,000

Note 6. Trade Receivables

Particulars `
Trade Receivables 8,70,000
Less: New provision 43,500
8,26,500

Note 7. Contingent Liabilities

Particulars `
Workmen’s Compensation Fund 25,000

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Question 10
Big & Co. Ltd.
Statement of Profit and Loss
for the year ended 31.03.2018
Particulars Note `
No.
I. Revenue from Operations 4,25,000
II. Other Income (Discount Received) 3,150
III. Total Income 4,28,150
IV. Expenses
Purchases 3,00,000
Changes in Inventory (50,000 – 91,500) (41,500)
Employee Benefit Expenses 1 1,05,400
Depreciation and Amortisation expenses 2 13,785
Other Expenses 3 34,190
Total Expenses 4,11,875
V. Profit Before Tax 16,275
VI. Tax Expense –––
VII. Profit after Tax 16,275
Notes to Accounts
Note 1. Employee Benefit Expenses
Particulars `
Wages (70,000 + 5,200) 75,200
Salaries (18,500 + 1,200) 19,700
Bonus 10,500
1,05,400

Note 2. Depreciation and Amortization Expenses

Particulars `
Depreciation on plant and Machinery 12,075
Depreciation on furniture 1,710
13,785

Note 3. Other Expenses

Particulars `
Discount Allowed 4,200
Insurance (6,720 – 1,680) 5,040
Rent (6,000 + 600) 6,600
General expenses 8,950
Printing and Stationery 2,400
Advertising 3,800
Bad debt 3,200
34,190

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Big & Co. Ltd.
Balance sheet as at 31.03.2018
Particulars Note `
No.
I. EQUITY AND LIABILITIES
(1) Shareholders Funds
(a) Share Capital 1 2,45,000
(b) Reserves and Surplus 2 32,751
(2) Non-Current Liabilities –––
(3) Current Liabilities
(a) Trade payables (Creditors) 35,200
(b) Other Current Liabilities 3 7,000
(c) Short term borrowings 15,700
(d) Short term provisions 4 14,744
Total 3,50,395
II. ASSETS
(1) Non-Current Assets
(a) Fixed Assets
(i) Tangible Assets 1 83,815
(2) Current Assets
(a) Inventories 91,500
(b) Trade Receivables 38,700
(c) Cash and Cash Equivalents 1,34,700
(d) Other Current Assets (Prepaid insurance) 1,680
Total 3,50,395
Notes to Accounts
Note 1. Share Capital
Particulars `
Authorised Capital (5,000 × 100) 5,00,000
Subscribed and paid up capital
(2,50,000 – 5,000) 2,45,000

Note 2. Reserves and Surplus

Particulars `
Reserve 25,000
Surplus Account: 6,220
Add: Profit for the period 16,275
22,495
Less: Proposed dividend 12,250
10,245
Less: Corporate dividend tax 2,494 7,751
(12,250 × 20.358%)
32,751

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Note 3. Other Current Liabilities
Particulars `
Outstanding Wages 5,200
Outstanding Salary 1,200
Outstanding Rent 600
7,000

Note 4. Short term Provisions

Particulars `
Proposed dividend 12,250
Corporate Dividend Tax 2,494
14,744

Note 5. Tangible Assets

Particulars `
Plant and Machinery (80,500 – 12,075) 68,425
Furniture (17,100 – 1,710) 15,390
83,815

Note: The amount of rent in the question is ` 6,000, not ` 6,600.

Question 11
Bangalore Manufacturing Co. Ltd.
Statement of Profit and Loss
for the year ended 31.03.2018
Particulars Note `
No.
I. Revenue from Operations 10,37,500
II. Other Income
III. Total Income 10,37,500
IV. Expenses
Purchases 4,62,500
Changes in Inventories (1,87,500 – 2,52,000) (64,500)
Employee Benefit Expenses 1 2,48,250
Depreciation and Amortisation expenses 2 90,900
Finance costs 3 45,000
Other Expenses 4 99,250
Total Expenses 8,81,400
V. Profit Before Tax (III – IV) 1,56,100
VI. Tax Expense 62,500
VII. Profit after Tax (V – VI) 93,600

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Notes to Accounts
Note 1. Employee Benefit Expenses
Particulars `
Wages 2,12,000
Salaries 36,250
2,48,250

Note 2. Depreciation and Amortisation Expenses

Particulars `
Depreciation on Plant and Machinery 90,000
Depreciation on fixtures 900
90,900

Note 3. Finance costs

Particulars `
Debenture Interest Paid 22,500
Add: Outstanding 22,500
45,000

Note 4. Other Expenses

Particulars `
Rent 12,000
General expenses 12,250
Preliminary expenses 2,500
Freight and Duty 32,750
Directors fees 14,350
Bad debt 5,275
Add: New Provision (5% of 2,17,500) 10,875
16,150 7,400
Less: Old Provision 8,750
Commission paid 18,000
99,250

Bangalore Manufacturing Co. Ltd.

Balance Sheet as 31.03.2018
Particulars Note `
No.
I. EQUITY AND LIABILITIES
(1) Shareholders Funds
(a) Share Capital 1 11,31,250
(b) Reserves and Surplus 2 91,706
(2) Non-Current Liabilities
(6% Debentures) 7,50,000

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(3) Current Liabilities
(a) Trade payables 2,20,000
(b) Other Current Liabilities
(Debenture interest outstanding) 22,500
(d) Short term provisions 3 1,34,394
Total 23,49,850
II. ASSETS
(1) Non-Current Assets
(a) Fixed Assets 4 15,77,100
(i) Tangible Assets
(ii) Intangible Assets (Good will) 62,500
(2) Current Assets
(a) Current Investments 1,50,000
(Govt. Securities)
(b) Inventories 2,52,000
(c) Trade Receivables
(2,17,500 – 10,875) 2,06,625
(d) Cash and Cash Equivalents
(95,750 + 5,875) 1,01,625
Total 23,49,850
Notes to Accounts
Note 1. Share Capital
Particulars `
Equity share Capital 11,50,000
Less: Calls in arrear 18,750
11,31,250

Note 2. Reserves and Surples

Particulars `
General Reserve (62,500 + 25,000) 87,500
Surplus Account: 36,250
Add: Profit for the year 93,600
1,29,850
Less: Transfer to reserves (25,000)
Less: Interim divident paid (18,750)
Less: Proposed dividend (56,562)
Less: Corporate dividend tax @ 20.358% (15,332) 14,206
Less: Preliminary expenses (10,000)
91,706
Note 3. Short-term provisions
Particulars `
Proposed dividend 56,562
corporate dividend tax 15,332
Provision for tax 62,500
1,34,394

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Note 4. Tangible Assets
Particulars `
Plant and Machinery (9,00,000 – 90,000) 8,10,000
Fixtures (18,000 – 900) 17,100
Building 7,50,000
15,77,100

Note: There is a difference of ` 10,000 in the B/S total given in the text book
due to change in the treatment of preliminary expenses. The right answer
is ` 23,49,850.

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