FINANCIALACCOUNTINGFOR MANAGEMENT

SANJAY INDUSTRIES LTD.

Balance Sheet and Income Statement
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Thefollowing isthetrialbalancebfSanjay Industries Ltd. ason31stMarch2006.
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Further information
1. Outstanding rent amounted to Rs. 7,200 while outstanding salaries Rs. 8,100 at the end
the year.
2. Makeaprovisionfordoubtful debts amountingto Rs. 4,590.
3. Stockon31stMarch2006was valuedat Rs. 7,92,000.
4. Depreciateplant,& machinery @ 14%andfurniture & fittings @18%.
5. Amortisepatents& trademarks@5%.
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CHAPTER3 MEASUREMENTOF PROFITAND FINANCIALPOSITiON: III CORPORATE ENTITIES
6. Provide for remuneration@ 10%ofthenetprofitsbeftr:;ax.
7. Make aprovisionfor incometax@35%.
8. The BoardofDirectors proposes a dividend @ 10% for the yearended 31st March 2006 after
transferto GeneralReserve @5%ofprofitaftertax.
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Required
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1. Preparethe following financial statementsofSanjayIndustriesLtd.:
a. Profit and loss account fortheyearended31stMarch2006. NP,
b. Profit and loss appropriation account fortheyearended31st March2006.
c. Balancesheetas on 31stMarch2006. , ,?'o3
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2. Brieflycommentupontheperformanceofthecompany.
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SANGEETA UDHYOG LTD.
BalanceSheetand IncomeStatement
The following is thetrialbalanceofSangeetaUdhyogLtd.ason 3]st March2006.
....
Stock, 1 stApril2005 14,91,360
Wages 8,77,920
Debtors &creditors 13,15,200 7,37,760
Furniture 40,000
Purchases&sales 57,45,680 93,59,200
Carriage inwards 39,280
Returns 1,01,12() 78,480
Advance paymentofincometax 1,14,320
Bankloan-Secured-Longterm 4,00,000
Manufacturingexpenses 1,53,920
Intereston loan 36,000
Profit&lossaccount, 1 stApril 2005 69,440
Cash-in-hand 15,360
Leaseholdfactorybuilding 13,13,680
.Plant&machinery . 10,27,200
Loosetools 1,00,000
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Carriageoutwards 74,080
Sharecapital 32,00,000
Calls-in-arrear 8,000
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FINANCIALACCOUNTING FOR MANAGEMENT
Rates & electricity-factory
96,000
1,04,000
10,000
Further infQrmation
1. Theauthorised sharecapital ofthecompanyconsistsof4,00,000equitysharesofRs. 10each.
2. ThestockwasvaluedatRs, 9,98,720and loosetoolsatRs. 80,000,
3. Wages Rs. 15.120andofl\cesalariesRs. 9,600aredue.
4. Bankloanwas takenon 1-04-2005 oninterest@ 15%p.a. o/s t..Mt -,...
5. Depreciation is to be provided on:
1. Plant& Machinery@ 14%;
2. Furniture@ 18%.
6. Write offone-thirdPreliminaryExpenses.
7. Provide Rs. 68,000onDebtorsforDoubtful Debts.
8. Provide furtherRs. 24,960fordiscounton debtors.
9. Makeaprovisionfor incometax @ 35%.
10. Transfer10%ofnet profitsto GeneralReserve.
.. 11. TheDirectors @ 10%peranm!lTh{or theyearended31stMarch2006.
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Required ...... cr\rC2
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1. Prepare the following financial statementsofSangeetaUdhyog Ltd.: ,?./
a. Profit and loss account fortheyearended31stMarch2006.
b. and loss approprialion account fortheyearended31stMarch 2006.
c. Balance sheet as on31stMarch 2006.
2..Brieflycommentupon theperformanceofthecompany.
PUSHPA ENGINEERING COMPANY LTD.
Balance Sheet and Profit and Loss Account
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TheaccountantofPushpa Engineering Company Ltd. hasprepared thefollowing trial baJanceofthe
companyas 01131stMarch, 2006.
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CHAPTER 3 MEASUREMENTOF PROFIT AND FINANCIAL POSITION: III CORPORATE ENTITIES
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bentures- secured 15,00,000
General reserve
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Bank uvtlluldft-ABN Amro ured 15,28,600
Sundry creditors 14,61,400
Sales 1,44,68,500
Rent 1,20,000
Other income 25,500
Profit & Ale 2,68,000
Calls-in-arrears 40,000
Stock,
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6,87,300
Stock, 1-04-2005-raw materials
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9,73,000
! Raw materials purchased 59,29,700
....""'.,'" and discounts 1,20,800
Carriage "'VVCl'U'"
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Rates, taxes and insurance 2,20,200
, Wages 52,19,800
I Coal and fuel 2,52,000
Furniture and fixtures 6,50,000
Freehold land 52,00,000
Plant & Machinery 29,50,000
Er'\,III.",,,,,nng tools
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Patterns 14,35,000
Goodwill 15,00,000
Sundry debtors 10,64,000
Bills receivables 5,38,000
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Advertisement 60,000
Commission 2,70,000
General expenses
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Bank Amro Bank ,70,000
Cash in hand 70,000
Interest 3,64,000
Preliminary expenses 40,000

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Further information
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1. Authorisedequitysharecapitalofthe companyis Rs. 100 lacsdividedinto 1 sharesof
Rs. 10 each.Thecompanyhas issued7,00,000shares.
FINANCIAL ACCOU!'J'nNG FOR MANAGEMENT
2. The closing stocks of finished goods and raw materials were valued at Rs. 12,40,000 and
Rs. 15,92,000 respectively.
3. The closing stocks of engineering tools was valued at Rs. 5,32,000.
4. Outstanding liabilities for wages and general expenses: Rs. 1,00,000 each.
5. Depreciation to be charged: plant and machinery @ 14%, patterns @ 20%, furniture & fixtures
@ 18%.
6. Provide 2% on debtors as doubtful debts after writing otT Rs.86,000 as bad debts.
7. Write off preliminary expenses Rs. 20,000.
8. Provide income tax @ 35%.
9. Create debenture redemption reserve ofRs. 3,00,000.
10. Dividend @ 10% on equity proposed by the board of directors.
Required
1. Prepare the following financial statements ofPushpa Engineering Company Ltd.:
a. Balance sheet as at 31 st March 2006.
b. Profit and loss aCGount for the year ended 31 st March 2006.
c. Profit and loss appropriation account for the year ended 31 st March 2006.
2. Briefly comment upon the performance of the company.
(Hint: Debenture redemption reserve is appropriated out of profits just like general reserve for the
..... "'llr"','"'''... of meeting the debenture redemption liability.)
MAHESH FOODS LTD. '
Balance Sheet and Profit and Loss Account
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Share capital 24,00,000
Ch in hand 37,200
Repairs & maintenance-plant 51,600
General reserve 6,00,000
Profit and loss account 10,60,000
Raw materials inventory, 31032006 16,02,000
Plant and machinery 25,80,000
Sundry creditors 18,40,000
Land 4,80,000
i Furniture 73,200
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