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I. P. C. C.

- ACCOUNTANCY

J. K. SHAH CLASSES

CHAPTER-2

COMPANY FINAL ACCOUNTS

Ans.1.

Raul Ltd.
Balance Sheet as at 31 March, 20XX
Particulars

Note No.

A EQUITY AND LIABILITIES


1 Shareholders funds
(a) Share capital
(b) Reserves and surplus
(c) Money received against share warrants
2 Share application money pending allotment
3 Non-current liabilities
(a) Long-term borrowings
(b) Deferred tax liabilities (net)
(c) Other long-term liabilities
(d) Long-term provisions
4 Current liabilities
(a) Short-term borrowings
(b) Trade payables
(c) Other current liabilities
(d) Short-term provisions
TOTAL
B ASSETS
1 Non-Current Assets
(a) Fixed assets
(i) Tangible assets
(ii) Intangible assets
(iii) Capital work-in-progress
(iv) Intangible assets under development
(b) Non-current investments
(c) Deferred tax assets (net)
(d) Long-term loans and advances
(e) Other non-current assets
2 Current Assets
(a) Current investments
(b) Inventories
(c) Trade receivables
(d) Cash and cash equivalents
(e) Short-term loans and advances
(f) Other current assets
TOTAL

: 6 :

As at 31 March, 20XX As at 31 March, 20XX

2,00,000
1,57,000
------1,00,000
------------25,000
11,000
53,000
5,46,000

4,40,000
------------------------45,000
46,000
15,000
------5,46,000

I. P. C. C.- ACCOUNTANCY

J. K. SHAH CLASSES
Raul Ltd

Statement of Profit and Loss for the year ended 31 March, 20XX
" For the year ended "For the year ended
Particulars

Note No.

1 Revenue from operations

31 March, 20XX "

31 March, 20XX"

3,50,000

2 Other income

----

3 Total revenue

3,50,000

4 Expenses
(a) Cost of materials consumed

----

(b) Purchases of stock-in-trade

1,50,000

(c) Changes in inventories of finished goods,


work-in-progress and stock-in-trade
(d) Employee benefits expense

0
----

(e) Finance costs

10,000

(f) Depreciation and amortisation expense

38,000

(g) Other expenses

75,000

Total expenses

2,73,000

5 Profit / (Loss) before exceptional and


77,000

extraordinary items and tax (3 - 4)


6 Exceptional items

1,000

7 Profit / (Loss) before extraordinary items and tax

78,000
----

8 Extraordinary items

78,000

9 Profit / (Loss) before tax

10 Tax expense:
(a) Current tax expense

30,000

11 Profit for the period (PAT)

48,000

: 7 :

I. P. C. C.- ACCOUNTANCY

J. K. SHAH CLASSES
Raul Ltd.

Notes attached to and forming part of Accounts


Particulars

31st March 20XX 31st March 20XX

Note : 1 Share Capital


Authorised Capital
30,000 Equity shares of ` 10/- each

3,00,000
3,00,000

Issued, Subscribed and paid-up


20,000 Equity shares of ` 10/- each, fully paid up

2,00,000

(out of Above, 5000 Equity shares are issued as Bonus)


Reconciliation of Number of Shares
Shares at the beginning

15,000

Add: Issued during the year

5,000

Shares at the end

20,000
Total

2,00,000

Note : 2 Reserves and Surplus


Securities Premium

20,000

Less: Utilised for Bonus

20,000

Revaluation Reserve

----

----

Add: Transfer during the year

70,000

General Reserve

66,000

Less: Utilised for Bonus

30,000

Add: Transfer during the year

15,000

70,000

51,000

Surplus
Surplus as at the beginning

35,000

Add: Profit for the period

48,000

Less: Transfer to General Reserve

-15,000

Less: Proposed Interim Dividend

-9,000

Less: Proposed Equity Dividend (including DDT @ 15%)


Total

-23,000

36,000
1,57,000

Note : 3 Long Term Borrowings


10% Debentures

1,00,000

(secured against Plant and Machinery)


Total

: 8 :

1,00,000

I. P. C. C.- ACCOUNTANCY

J. K. SHAH CLASSES
Note: 4 Trade payables
Creditors

25,000
Total

25,000

Note: 5 Other Current Liabilities


Interest on Debentures outstanding

5,000

TDS payable

6,000
Total

11,000

Note : 6 Short Term Provisions


Proposed Equity Dividend

23,000

Provision for Tax

30,000
Total

53,000

Note : 7 Tangible Assets


Land (1,10,000 + 70,000)

1,80,000

Plant and Machinery at Cost

3,80,000

Less: Provision for Depreciation

1,20,000
Total

2,60,000
4,40,000

Note : 8 Inventories
Closing Stock

45,000
Total

45,000

Note : 9 Trade Receivables


Debtors
Due for more than six months

6,000

Other debts

40,000
Total

46,000
46,000

Note : 10 Cash and Cash Equivalents


Cash and Bank

15,000
Total

15,000

Note : 11 Finance Cost


Interest on Debentures

5,000

Add: Outstanding

5,000
Total

10,000
10,000

Note : 12 Other Expenses


Factory Expenses

40,000

Administration Expenses

15,000

Selling Expenses

20,000
Total

75,000

Note : 13 Exceptional Items


Profit on Sale of Machinery

1,000
Total

: 9 :

1,000

I. P. C. C.- ACCOUNTANCY

J. K. SHAH CLASSES
Existing number of Shares 15,000
Therefore Bonus shares issued 5,000
Bonus Amount ` 50,000
Journal Entry
Securities Premium A/c

Dr.

20,000

General Reserve A/c

Dr.

30,000

To Bonus to Equity Shareholders

50,000

Bonus to Equity Shareholders

Dr.

50,000

To Equity share capital

50,000

Ans.2.

Zidane Ltd.
Balance Sheet as at 31 March, 20XX
Particulars

Note No.

As at 31 March, 20XX As at 31 March, 20XX

`
A EQUITY AND LIABILITIES
1 Shareholders funds
(a) Share capital

5,00,000

(b) Reserves and surplus

2,76,000

(c) Money received against share warrants

----

2 Share application money pending allotment

----

3 Non-current liabilities
(a) Long-term borrowings

----

(b) Deferred tax liabilities (net)

----

(c) Other long-term liabilities

----

(d) Long-term provisions

----

4 Current liabilities
(a) Short-term borrowings

----

(b) Trade payables

20,000

(c) Other current liabilities

1,11,000

(d) Short-term provisions

56,000
TOTAL

9,63,000

B ASSETS
1 Non-current Assets
(a) Fixed assets
(i) Tangible assets

5,41,000

(ii) Intangible assets

----

(iii) Capital work-in-progress

----

(iv) Intangible assets under development

----

: 10 :

I. P. C. C.- ACCOUNTANCY

J. K. SHAH CLASSES
(b) Non-current investments

2,45,000

(c) Deferred tax assets (net)

----

(d) Long-term loans and advances

----

(e) Other non-current assets

----

2 Current Assets
(a) Current investments

----

(b) Inventories

50,000

(c) Trade receivables

75,000

(d) Cash and cash equivalents

32,000

(e) Short-term loans and advances

16,000

(f) Other current assets

4,000
TOTAL

9,63,000

Zidane Ltd.
Statement of Profit and Loss for the year ended 31 March, 20XX
Particulars

Note No. "For the year ended "For the year ended
31 March, 20XX"

31 March, 20XX

Revenue from operations

1,80,000

Other income

4,000

Total revenue

1,84,000

Expenses
(a) Cost of materials consumed

----

(b) Purchases of stock-in-trade

----

(c) Changes in inventories of finished goods,


work-in-progress and stock-in-trade
(d) Employee benefits expense

20,000

(e) Finance costs

6,000

(f) Depreciation and amortisation expense

29,000

(g) Other expenses

33,000
Total expenses

----

88,000

Profit / (Loss) before exceptional and


extraordinary items and tax (3 - 4)

96,000

Exceptional items

-4,000

Profit / (Loss) before extraordinary items and tax

92,000

Extraordinary items

Profit / (Loss) before tax

---92,000

10 Tax expense:
(a) Current tax expense

10,000
82,000

11 Profit for the period (PAT)

: 11 :

I. P. C. C.- ACCOUNTANCY

J. K. SHAH CLASSES
Zidane Ltd.

Notes attached to and forming part of Accounts


Particulars

31st March 20XX 31st March 20XX

Note : 1 Share Capital


Authorised Capital
1,00,000 Equity shares of ` 10/- each

10,00,000
10,00,000

Issued, Subscribed and paid-up


50,000 Equity shares of ` 10/- each, fully paid up

5,00,000

(out of Above, 20,000 Equity shares are issued for


consideration other than cash)
Reconciliation of Number of Shares
Shares at the beginning

30,000

Add: Issued during the year

20,000

Shares at the end

50,000
Total

5,00,000

Note : 2 Reserves and Surplus


Securities Premium

50,000

General Reserve

1,80,000

Surplus
Surplus as at the beginning

10,000

Add: Profit for the period

82,000

Less: Proposed Equity Dividend (including DDT @ 15%)

46,000

Total

46,000
2,76,000

Note: 3 Trade Payables


Creditors

20,000
Total

20,000

Note: 4 Other Current Liabilities


Interest on Debentures outstanding

5,000

Interest on Auditors Remuneration

6,000

6% Debentures

1,00,000
Total

1,11,000

Note : 5 Short Term Provisions


Proposed Equity Dividend

46,000

Provision for Tax

10,000
Total

: 12 :

56,000

I. P. C. C.- ACCOUNTANCY

J. K. SHAH CLASSES
Note : 6 Tangible Assets
Land and Building at Cost

3,00,000

Less: Provision for Depreciation (50,000 + 9,000)

59,000

Plant and Machinery at Cost

4,00,000

Less: Provision for Depreciation

1,20,000

Live Stock

2,41,000

2,80,000
20,000

Total

5,41,000

Note : 7 Non Current Investments


4% Government Securities (MV= ` 1,10,000)

95,000

Investment in Equity Shares (MV = ` 1,70,000)

1,50,000

Total

2,45,000

Note : 8 Inventories
Closing Stock

50,000
Total

50,000

Note : 9 Trade Receivables


Debtors
Due for more than six months

20,000

Other debts

40,000
60,000

Less: Provision for Doubtful Debts

-5,000

Bills Receivable

55,000
20,000

Total

75,000

Note : 10 Cash and Cash Equivalents


Cash at bank

30,000

Cash on Hand

2,000
Total

32,000

Note : 11 Short Term Loans and Advances


Prepaid Insurance

1,000

Advance Tax

15,000
Total

16,000

Note : 12 other Current Assets


Interest income receivable

4,000

Discount on issue of debentures

4,000

Less: Write off

4,000
Total

: 13 :

---4,000

I. P. C. C.- ACCOUNTANCY

J. K. SHAH CLASSES
Note : 13 Contingent liabilities and Commitments
Commitments
Uncalled amount of ` 50,000 on partly paid shares
held as investments
Note : 14 other Incomes
Interest Income

----

Add: Receivable

4,000

4,000

Total

4,000

Note : 15 Employee Benefit Expenses


Salaries

20,000
Total

20,000

Note : 16 Finance Cost


Interest on Debentures

----

Add: Outstanding

6,000

6,000

Total

6,000

Note : 17 Other Expenses


Provision for Doubtful Debts

5,000

Auditors Remuneration

5,000

General Expenses

15,000

Less: Prepaid

-1,000

14,000

Directors Fees

9,000
Total

33,000

Note : 18 Exceptional Items


Discount on Issue of Debentures w/off

4,000
Total

4,000

Working Notes
Adj (b)
Bonus Ratio 1 : 3
Existing number of Shares 15,000
Therefore Bonus shares issued 5,000
Bonus Amount ` 50,000
Journal Entry
Securities Premium A/c

Dr.

20,000

General Reserve A/c

Dr.

30,000

To Bonus to Equity Shareholders

50,000

Bonus to Equity Shareholders

Dr.

To Equity Share Capital

50,000
50,000

: 14 :

I. P. C. C.- ACCOUNTANCY

J. K. SHAH CLASSES
Ans.3.

S Ltd.
Balance Sheet as at 31 March, 20XX
Particulars

Note No.

As at 31 March, 20XX As at 31 March, 20XX

A EQUITY AND LIABILITIES


1

Shareholders funds
(a) Share capital

6,00,000

(b) Reserves and surplus

1,32,024

(c) Money received against share warrants

----

Share application money pending allotment

----

Non-current liabilities
(a) Long-term borrowings

3,00,000

(b) Deferred tax liabilities (net)

----

(c) Other long-term liabilities

----

(d) Long-term provisions

----

Current liabilities
(a) Short-term borrowings

----

(b) Trade payables

80,000

(c) Other current liabilities

29,500

(d) Short-term provisions

1,35,024

TOTAL

12,76,548

B ASSETS
1

Non-current Assets
(a) Fixed assets
(i) Tangible assets

6,44,548

(ii) Intangible assets

2,30,000

(iii) Capital work-in-progress

----

(iv) Intangible assets under development

----

(b) Non-current investments

----

(c) Deferred tax assets (net)

----

(d) Long-term loans and advances

----

(e) Other non-current assets

----

Current Assets
(a) Current investments

----

(b) Inventories

59,000

(c) Trade receivables

1,76,000

(d) Cash and cash equivalents

94,000

(e) Short-term loans and advances

73,000

(f)

Other current assets

----

TOTAL

12,76,548

: 15 :

I. P. C. C.- ACCOUNTANCY

J. K. SHAH CLASSES
S Ltd.

Statement of Profit and Loss for the year ended 31 March, 20XX
For the year ended For the year ended
Particulars

Note No.

31 March, 20XX

31 March, 20XX

Revenue from operations

6,20,000

Other income

----

Total Revenue

6,20,000

Expenses
(a) Cost of materials consumed

----

(b) Purchases of stock-in-trade

2,80,000

(c) Changes in inventories of finished goods,


work-in-progress and stock-in-trade
(d) Employee benefits expense

64,000

(e) Finance costs

45,000

(f) Depreciation and amortisation expense

75,012

(g) Other expenses

51,900

Total expenses
5

-24,000

4,91,912

Profit / (Loss) before exceptional and extraordinary


items and tax (3 - 4)

1,28,088

Exceptional items

3,960

Profit / (Loss) before extraordinary items and tax

Extraordinary items

Profit / (Loss) before tax

1,32,048
---1,32,048

10 Tax expense:
(a) Current tax expense

66,024

(b) Short IT Provision

1,000

65,024

11 Profit for the period (PAT)

: 16 :

I. P. C. C.- ACCOUNTANCY

J. K. SHAH CLASSES
S Ltd.

Notes attached to and forming Part of Accounts


Particulars

31st March 20XX 31st March 20XX

Note : 1 Share Capital


?

Authorised Capital

?
Issued, Subscribed and paid-up
Equity shares of ` /- each, fully paid up

6,00,000

(out of Above, 20,000 Equity shares are issued for


consideration other than cash)
Total

6,00,000

Note : 2 Reserves and Surplus


Securities Premium

20,000

General Reserve

62,000

Add: Transfer during the year

38,000

1,00,000

Surplus
Surplus as at the beginning

54,000

Add: Profit for the period

65,024

Less: Transfer to General Reserve

-38,000

Less: Proposed Equity Dividend (including DDT @ 15%)

-69,000

Total

12,024
1,32,024

Note: 3 Long Term Borrowings


15% Debentures

3,00,000

(Secured against assets of the company)


Total

3,00,000

Note: 4 Trade Payables


Creditors

80,000
Total

80,000

Note: 5 Other Current Liabilities


Interest on Debentures outstanding

22,500

Interest on Auditors Remuneration

4,000

IT Payable

3,000
Total

29,500

: 17 :

I. P. C. C.- ACCOUNTANCY

J. K. SHAH CLASSES
Note : 6 Short Term Provisions
Proposed Equity Dividend

69,000

Provision for Tax

66,024
Total

1,35,024

Note : 7 Tangible Assets


Land and Building at Cost

4,00,000

Less: Provision for Depreciation (30,000 + 7,400)

37,400

Plant and Machinery at Cost

4,20,000

Less: Provision for Depreciation (1,28,000 + 58,400)

1,86,400

office Equipmnet at Cost

3,62,600

2,33,600

30,000

Less: Provision for Depreciation (7,000 + 2,300)

9,300

Motor Car at Cost

50,000

Less: Provision for Depreciation (15,440 + 6,912)

22,352

Total

20,700

27,648
6,44,548

Note : 8 Intangible Assets


Goodwill

2,30,000
Total

2,30,000

Note : 8 Inventories
Closing Stock

59,000
Total

59,000

Note : 9 Trade Receivables


Debtors
Due for more than six months

26,000

Other Debts

1,50,000
1,76,000

Less: Provision for Doubtful Debts

1,76,000

Total

1,76,000

: 18 :

I. P. C. C.- ACCOUNTANCY

J. K. SHAH CLASSES
Note : 10 Cash and Cash Equivalents
Cash at Bank and Hand

94,000
Total

94,000

Note : 11 Short Term Loans and Advances


Prepaid Expenses

3,000

Advance Tax

70,000
Total

73,000

Note : 14 Change in Inventories


Opening Stock

35,000

Less: Closing Stock

-59,000
Total

-24,000
-24,000

Note : 15 Employee Benefit Expenses


Salaries

64,000
Total

64,000

Note : 16 Finance Cost


Interest on Debentures

22,500

Add: Outstanding

22,500
Total

45,000
45,000

Note : 17 Other Expenses


Auditors Remuneration

4,000

Rent and Taxes

15,000

Travelling Expenses

9,000

Repairs and Renewals

2,500

Printing and Stationery

6,500

Motor Car Expenses

14,900
Total

51,900

Note : 18 Exceptional Items


Profit on sale of Motor Car

3,960
Total

3,960

: 19 :

I. P. C. C.- ACCOUNTANCY

J. K. SHAH CLASSES
Ans.4.

Savita Ltd.
Balance Sheet as at 31 March, 20XX
Particulars

Note No. As at 31 March, 20XX As at 31 March, 20XX

`
A EQUITY AND LIABILITIES
1

Shareholders funds
(a)

Share capital

15,00,000

(b)

Reserves and surplus

6,95,900

(c)

Money received against share warrants

----

Share application money pending allotment

----

Non-current liabilities

(a)

Long-term borrowings

5,00,000

(b)

Deferred tax liabilities (net)

----

(c)

Other long-term liabilities

----

(d)

Long-term provisions

----

Current liabilities
(a)

Short-term borrowings

----

(b)

Trade payables

(c)

Other current liabilities

----

(d)

Short-term provisions

4,17,500

6,28,400

TOTAL

37,41,800

B ASSETS
1

Non-current Assets
(a)

Fixed assets
(i) Tangible assets

15,90,000

(ii) Intangible assets

----

(iii) Capital work-in-progress

----

(iv) Intangible assets under development

----

(b)

Non-current investments

1,00,000

(c)

Deferred tax assets (net)

----

(d)

Long-term loans and advances

----

(e)

Other non-current assets

----

Current Assets
(a)

Current investments

----

(b)

Inventories

8,30,000

(c)

Trade receivables

9,88,750

(d)

Cash and cash equivalents

(e)

Short-term loans and advances

(f)

Other current assets

27,500
2,05,550
----

TOTAL

37,41,800

: 20 :

I. P. C. C.- ACCOUNTANCY

J. K. SHAH CLASSES
Savita Ltd.

Notes attached to and forming part of Accounts


Particulars

31st March 20XX 31st March 20XX

Note : 1 Share Capital


Authorised Capital
25000 Equtiy Shares of ` 100/- each

25,00,000
25,00,000

Issued, Subscribed and paid-up


15000 Equity shares of ` 100/- each, fully paid up

15,00,000

(out of Above, 2500 Equity shares are issued as bonus)


Reconciliation
Shares at the beginning

12,500

Add: Issued during the year

2,500

Shares at the end

15,000
Total

15,00,000

Note : 2 Reserves and Surplus


Securities Premium

25,000

Debenture redemption Reserve

1,00,000

Add: Transfer during the year

1,00,000

General Reserve

5,50,000

Add: Utilised for Bonus

5,00,000

2,00,000

50,000

Surplus
Surplus as at the beginning

2,86,900

Add: Profit for the period

4,56,500

Less: Transfer to DRR

1,00,000

Less: Proposed Interim Dividend

50,000

Less: Proposed Equity Dividend (including DDT @ 15%) 1,72,500


Total

4,20,900
6,95,900

Note: 3 Long Term Borrowings


12% Debentures

5,00,000
Total

5,00,000

Note: 4 Trade Payables


Creditors

6,28,400
Total

6,28,400

: 21 :

I. P. C. C.- ACCOUNTANCY

J. K. SHAH CLASSES
Note : 6 Short Term Provisions
Proposed Equity Dividend

1,72,500

Provision for Tax

2,45,000
Total

4,17,500

Note : 7 Tangible Assets


Plant and Machinery at Cost

20,00,000

Less: Provision for Depreciation

5,40,000

Furniture at Cost

1,75,000

Less: Provision for Depreciation

45,000
Total

14,60,000

1,30,000
15,90,000

Note : 8 Non- Current Investment


Investment in Equity Shares of Vanita Ltd (MV ` 1,05,000)
Total

1,00,000
1,00,000

Note : 8 Inventories
Closing Stock

8,30,000
Total

8,30,000

Note : 9 Trade Receivables


Debtors

9,88,750
Total

9,88,750

Note : 10 Cash and Cash Equivalents


Cash at bank and hand

2,500

Current Account with Bank

25,000
Total

27,500

Note : 11 Short Term Loans and Advances


Prepaid Expenses

15,000

Advance Tax

1,90,550
Total

2,05,550

Note : 12 Contingent Liab & Commitments


Contingent Liabilities
Claims against the company not acknowledged as debts ` 5,00,000

: 22 :

I. P. C. C.- ACCOUNTANCY

J. K. SHAH CLASSES
Ans.5.

Wholesale Traders Ltd.


Balance Sheet as at 31 March, 20XX
Particulars

Note No. As at 31 March, 20XX As at 31 March, 20XX

`
A EQUITY AND LIABILITIES
1 Shareholders funds
(a) Share capital

4,20,000

(b) Reserves and surplus

3,38,752

(c) Money received against share warrants

----

2 Share application money pending allotment

----

3 Non-current liabilities
(a) Long-term borrowings

1,50,000

(b) Deferred tax liabilities (net)

----

(c) Other long-term liabilities

----

(d) Long-term provisions

----

4 Current liabilities
(a) Short-term borrowings

7,300

(b) Trade payables

1,51,000

(c) Other current liabilities

6,130

(d) Short-term provisions

2,95,619
TOTAL

13,68,800

B ASSETS
1 Non-current Assets
(a) Fixed assets
(i) Tangible assets

7,19,200

(ii) Intangible assets

----

(iii) Capital work-in-progress

----

(iv) Intangible assets under development

----

(b) Non-current investments

67,500

(c) Deferred tax assets (net)

----

(d) Long-term loans and advances

----

(e) Other non-current assets

----

2 Current Assets
(a) Current investments

----

(b) Inventories

1,67,000

(c) Trade receivables

3,10,000

(d) Cash and cash equivalents

1,05,100

(e) Short-term loans and advances

----

(f) Other current assets

---TOTAL

13,68,800

: 23 :

I. P. C. C.- ACCOUNTANCY

J. K. SHAH CLASSES
Wholesale Traders Ltd.

Statement of Profit and Loss for the year ended 31 March, 20XX
For the year ended For the year ended
Particulars

Note No.

31 March, 20XX

31 March, 20XX

Revenue from operations

20,65,000

Other income

39,400

Total Revenue

21,04,400

Expenses
(a)

Cost of materials consumed

(b)

Purchases of stock-in-trade

(c)

Changes in inventories of finished goods,

13,87,500

work-in-progress and stock-in-trade

-47,000

(d)

Employee benefits expense

54,630

(e)

Finance costs

16,300

(f)

Depreciation and amortisation expense

24,800

(g)

Other expenses

1,76,500
Total expenses

16,12,730

Profit / (Loss) before exceptional and


4,91,670

extraordinary items and tax (3 - 4)


6

Exceptional items

----

Profit / (Loss) before extraordinary items and tax

Extraordinary items

Profit / (Loss) before tax

4,91,670
---4,91,670

10 Tax expense:
(a)

Current tax expense

2,70,419

2,21,252

11 Profit for the period (PAT)

: 24 :

I. P. C. C.- ACCOUNTANCY

J. K. SHAH CLASSES
Wholesale Traders Ltd.

Notes attached to and forming part of Accounts


Particulars

31st March 20XX 31st March 20XX

Note : 1 Share Capital


Authorised Capital
42,000 Equity Shares of ` 10/- Each

4,20,000
4,20,000

Issued, Subscribed and paid-up


42000 Equity shares of ` 10/- each, fully paid up

4,20,000

Total

4,20,000

Note : 2 Reserves and Surplus


Capital Reserve

----

Add: Transfer during the year

2,000

General Reserve

2,000

1,00,000

Add: Transfer during the year

10,000

1,10,000

Surplus
Surplus as at the beginning

57,500

Add: Profit for the period

2,21,252

Less: Transfer to General Reserve

-10,000

Less: Proposed Interim Dividend

16,800

Less: Proposed Equity Dividend (DDT ignored)

25,200

Total

2,26,752
3,38,752

Note: 3 Long Term Borrowings


7% Debentures

1,50,000
Total

1,50,000

Note: 4 Short Term Borrowing


Bank overdraft

7,300
Total

7,300

Note: 5 Trade Payables


Creditors

1,51,000
Total

1,51,000

Note: 6 Other Current Liabilities


Unclaimed Dividend

1,500

Managerail Remuneration o/s

4,630
Total

6,130

: 25 :

I. P. C. C.- ACCOUNTANCY

J. K. SHAH CLASSES
Note : 7 Short Term Provisions
Proposed Equity Dividend

25,200

Provision for Tax

2,70,419
Total

2,95,619

Note : 8 Tangible Assets


Leasehold Properties

1,40,000

Less: Provision for Depreciation (21,000 + 3,500)


Other properties

24,500

1,15,500

6,60,000

Less: Provision for Depreciation (50,000 + 18,300)

68,300

Motor Car at Cost

25,000

Less: Provision for Depreciation (10,000 + 3,000)

13,000

Total

5,91,700

12,000
7,19,200

Note : 9 Non current Investments


Investments

67,500
Total

67,500

Note : 10 Inventories
Closing Stock

1,67,000
Total

1,67,000

Note : 11 Trade Receivables


Debtors

3,10,000
Total

3,10,000

Note : 12 Cash and Cash Equivalents


Cash at Bank

15,100

Cash in Hand

90,000
Total

1,05,100

Note : 13 Other Incomes


Rent

36,000

Investment Income

3,400
Total

39,400

: 26 :

I. P. C. C.- ACCOUNTANCY

J. K. SHAH CLASSES
Note : 14 Change in Inventories
Opening Stock

1,20,000

Less: Closing Stock

-1,67,000
Total

-47,000
-47,000

Note : 15 Employee Benefit Expenses


MD remuneration

50,000

Add: O/s

4,630
Total

54,630
54,630

Note : 16 Finance Cost


Interest on Debentures

10,500

Add: Outstanding

----

Bank Interest

10,500
5,800

Total

16,300

Note : 17 Other Expenses


Administration and Selling Expenses

1,76,500

Total

1,76,500

Calculation of Net Profit for Managerial remuneration


Sales

20,65,000

Add: Closing Stock

1,67,000

Less: Opening Stock

1,20,000

Less: Purchases

13,87,500

Gross Profit

7,24,500

Add: Other Incomes

39,400

Less: Finance Cost

16,300

Less: Other Expenses

1,76,500

Less: Depreciation as per books

24,800

NP for managerial remuneration

5,46,300

Remuneration entitled @ 10%

54,630

: 27 :

I. P. C. C.- ACCOUNTANCY

J. K. SHAH CLASSES
Ans.6.

Bharat Implements Ltd.


Balance Sheet as at 31 March, 20XX
Particulars

Note No.

As at 31 March, 20XX As at 31 March, 20XX

A EQUITY AND LIABILITIES


1 Shareholders funds
(a) Share capital

20,000

(b) Reserves and surplus

39,179

2 Share application money pending allotment

----

3 Non-current liabilities
(a) Long-term borrowings

29,480

(b) Deferred tax liabilities (Net)

----

(c) Other long-term liabilities

----

(d) Long-term provisions

----

4 Current liabilities
(a) Short-term borrowings
(b) Trade payables

1,10,775

(c) Other current liabilities

2,129

(d) Short-term provisions

25,362
TOTAL

2,26,925

B ASSETS
1 Non-current assets
(a) Fixed assets
(i)

Tangible assets

35,870

(ii) Intangible assets

----

(iii) Capital work-in-progress

----

(iv) Intangible assets under development

----

(b) Non-current investments

190

(c) Deferred tax assets (net)

----

(d) Long-term loans and advances

580

(e) Other non-current assets

----

2 Current Assets
(a) Current investments

----

(b) Inventories

1,31,000

(c) Trade receivables

58,940

(d) Cash and cash equivalents

320

(e) Short-term loans and advances

----

(f) Other current assets

25
TOTAL

2,26,925

: 28 :

I. P. C. C.- ACCOUNTANCY

J. K. SHAH CLASSES
Bharat Implements Ltd.

Statement of Profit and Loss for the year ended 31 March, 20XX
For the year ended For the year ended
Particulars

Note No.

31 March, 20XX

31 March, 20XX

Revenue from operations

6,69,700

Other income

2,880

Total revenue

6,72,580

Expenses
(a) Cost of materials consumed
(b) Purchases of stock-in-trade

4,68,410

(c) Changes in inventories of finished goods,


work-in-progress and stock-in-trade
(d) Employee benefits expense

31,839

(e) Finance costs

1,620

(f) Depreciation and amortisation expense

3,550

(g) Other expenses

1,16,020
Total expenses

18,990

6,40,429

Profit / (Loss) before exceptional and


32,151

extraordinary items and tax (3 - 4)


6

Exceptional items

----

Profit / (Loss) before extraordinary items and tax

Extraordinary items

Profit / (Loss) before tax

32,151
---32,151

10 Tax expense:
(a) Current tax expense

19,612

12,539

11 Profit for the period (PAT)

: 29 :

I. P. C. C.- ACCOUNTANCY

J. K. SHAH CLASSES
Bharat Implements Ltd.

Notes attached to and forming part of Accounts


Particulars

31st March 20XX 31st March 20XX

Note : 1 Share Capital


Authorised Capital
2000 Equity Shares of ` 10/- Each

20,000
20,000

Issued, Subscribed and paid-up


2000 Equity shares of ` 10/- each, fully paid up

20,000

Total

20,000

Note : 2 Reserves and Surplus


Development Reabate Reserve

2,340

Add: Transfer during the year

340

Investment Allowance Reserve

2,680
4,250

General Reserve
General Reserve as at the beginning

25,800

Add: Profit for the period

12,539

Less: Transfer to DRR

340

Less: Proposed Equity Dividend (DDT @ 15%)


Total

5,750

32,249
39,179

Note: 3 Long Term Borrowings


Secured Loans

13,480

Fixed Deposits

16,000
Total

29,480

Note: 4 Trade Payables


Creditors

1,10,775
Total

1,10,775

Note: 5 Other Current Liabilities


Managerail Remuneration o/s

2,129
Total

2,129

Note : 6 Short Term Provisions


Proposed Equity Dividend

5,750

Provision for Tax

19,612
Total

: 30 :

25,362

I. P. C. C.- ACCOUNTANCY

J. K. SHAH CLASSES
Note : 7 Tangible Assets
Fixed assets at Cost

63,870

Less: Provision for Depreciation

28,000
Total

35,870

Note : 8 Non current Investments


investments (Market Value = ` 150)

190
Total

190

Note : 9 Long term Loans and Advances


Loans and advances

580
Total

580

Note : 10 Inventories
Closing Stock
Raw Materials

30,010

WIP

25,040

Finished Goods

75,950
Total

1,31,000

Note : 11 Trade Receivables


Debtors
Due for more than six months

121

Other debts

58,879
59,000

Less: Provision for Doubtful Debts

60
Total

58,940
58,940

Note : 12 Cash and Cash Equivalents


Cash at Bank

320
Total

320

Note : 13 other Current Assets


Interest Accrued

25
Total

25

Note : 14 Other Incomes


Other Income

2,880
Total

2,880

Note : 15 Cost of Materials Consumed


Opening stock of Raw Material

50,020

Add : Purchases of Raw Material

4,48,400

Less: Closing Stock of Raw Material

30,010
Total

: 31 :

4,68,410

I. P. C. C.- ACCOUNTANCY

J. K. SHAH CLASSES
Note : 16 Change in Inventories
Opening Stock of FG + WIP

1,19,980

Less: Closing Stock of FG + WIP

1,00,990
Total

18,990
18,990

Note : 17 Employee Benefit Expenses


Salaries

29,710

MD remuneration

----

Add: O/s

2,129
Total

2,129
31,839

Note : 18 Finance Cost


Interest on Fixed Loan

620

Other Interest

1,000
Total

1,620

Note : 19 Other Expenses


Auditors Remuneration
Audit Fees

50

Other Matters

15

Other Expenses

65
1,15,955

Total

1,16,020

Calculation of Net Profit for Managerial remuneration


Sales

6,69,700

Add: Closing Stock

1,31,000

Less: Opening Stock

1,61,000

Less: Purchases

4,48,400

Gross Profit

1,91,300

Add: Other Incomes

2,880

Less:
Salaries and Wages

29,710

Finance Cost

1,620

Other Expenses

1,16,020

Depreciation as per Sch. XIV

4,250

Net Profit for Managerial Remuneration


Remuneration entitled @ 5%

42,580
2,129

: 32 :

I. P. C. C.- ACCOUNTANCY

J. K. SHAH CLASSES

Ans.7.Calculation of Remuneration Payable to the Manager

Particulars
Gross Profit

`
9,00,000

Add:
Subsidies received from the Government

60,000

Revenue profit on sale of the Asset

70,000

1,30,000

Less:
Salaries, Wages and Bonus

1,92,500

General Expenses

74,000

Depreciation as per Sch XIV

81,000

Net Profit for Managerial Remuneration

6,82,500

Remuneration entitled @ 5%

Ans.8.

3,47,500

34,125

Journal Entries in the Books of A Ltd.

Conversion of Partly Paid shares into fully paid

(1)

Share Final Call A/c

Dr.

80,000

To Equity Share Capital


(2)

80,000

Bonus to Equity share holders

Dr.

80,000

To Share Final Call


(3)

80,000

General Reserve

Dr.

80,000

To Bonus to Equity Shareholders

80,000

Bonus issue entries

(1)

Capital Reserve A/c

Dr.

1,00,000

Securities Premium A/c

Dr.

3,00,000

Capital Redemption Reserve

Dr.

3,40,000

General Reserve A/c

Dr.

60,000

To Bonus to Equity Shareholders


(2)

Bonus to Equity Shareholders

8,00,000
Dr.

To Equity Share Capital

8,00,000
8,00,000

: 33 :

I. P. C. C.- ACCOUNTANCY

J. K. SHAH CLASSES
Ans.9.

ET Ltd.
Balance Sheet as at 31 March, 20XX
Particulars

Note No.

As at 31 March, 20XX As at 31 March, 20XX


`

A EQUITY AND LIABILITIES


1

Shareholders funds
(a) Share capital

25,000

(b) Reserves and surplus

19,442

(c) Money received against share warrants

----

Share application money pending allotment

----

Non-current liabilities
(a) Long-term borrowings

36,549

(b) Deferred tax liabilities (net)

----

(c) Other long-term liabilities

----

(d) Long-term provisions

241

Current liabilities
(a) Short-term borrowings

30,672

(b) Trade payables

8,807

(c) Other current liabilities

11,000

(d) Short-term provisions

7,275
TOTAL

1,38,986

B ASSETS
1

Non-current Assets
(a) Fixed assets
(i) Tangible assets

44,537

(ii) Intangible assets

----

(iii) Capital work-in-progress

596

(iv) Intangible assets under development

----

(b) Non-current investments

----

(c) Deferred tax assets (net)

----

(d) Long-term loans and advances

4,518

(e) Other non-current assets


2

----

Current Assets
(a) Current investments

----

(b) Inventories

61,502

(c) Trade receivables

24,231

(d) Cash and cash equivalents

103

(e) Short-term loans and advances

3,489

(f) Other current assets

10
TOTAL

: 34 :

1,38,986

I. P. C. C.- ACCOUNTANCY

J. K. SHAH CLASSES
E Ltd.

Notes attached to and forming part of Accounts


(` in 000s)
Particulars

31st March 20XX 31st March 20XX

Note : 1 Share Capital


Authorised Capital
3,50,000 Equity Shares of ` 100/- Each

35,000
35,000

Issued, Subscribed and paid-up


2,50,000 Equity shares of ` 100/- each, fully paid up

25,000
Total

25,000

Note : 2 Reserves and Surplus


Development Reabate Reserve

6,271

Investment Allowance Reserve

-----

Add: Transfer During the year

5,400

General reserve

5,400
6,031

Profit and Loss (PBT)

14,509

Less: Provision for Managerial Remuneration

94

Less: Provision for Tax

4,400

Less: Transfer to Investment Allowance Reserve

5,400

Less: Proposed Dividend (including DDT @ 15%)

2,875
Total

1,740
19,442

Note: 3 Long Term Borrowings


Loan from State Government (secured by charge on land)

575

other Secured Loans (secured by charge on biulding and plant and mach)

32,460

Fixed Deposits from Public

2,400

Unsecured Loans

1,114
Total

36,549

Note: 4 Long Term Provision


Provision for Gratuity and Pension

241
Total

241

Note: 4 Short Term Borrowings


Cash Credit from Banks (Hypothecation of Stocks)

30,672
Total

30,672

Note: 4 Trade payables


Acceptances

2,645

Sundry Creditors

6,162
Total

8,807

Note: 5 Other Current Liabilities


Other current liabilities

10,317

Interest accrued but not due on loans

589

Managerial Remuneration o/s

94
Total

: 35 :

11,000

I. P. C. C.- ACCOUNTANCY

J. K. SHAH CLASSES
Note : 6 Short Term Provisions
Provision for Income tax
Proposed Dividend

4,400
2,875
7,275

Total
Note : 7 Tangible Assets
Land at Cost
Building at Cost
Less: Provision for Depreciation
Plant and Machinery at Cost
Less: Provision for Depreciation
Furniture, Fixtures and office Equipment at Cost
Less: Provision for Depreciation
Vehicles at cost
Less: Provision for Depreciation

2,225
9,316
2,193
64,282
30,328
1,594
568
454
245

7,123
33,954
1,026

Total

209
44,537

Total

4,518
4,518

Total

42,014
6,116
1,414
2,771
9,187
61,502

Total

24,231
24,231

Note : 9 Long term Loans and Advances


Loans and advances
Note : 10 Inventories
Closing Stock
Raw Materials
WIP
Finished Goods
Stores and Spare
Tools, Jigs and Dies
Note : 11 Trade receivables
Debtors
Note : 12 Cash and Cash Equivalents
Cash in Hand
Balance with Bank
On current accounts
On deposit accounts

37
39
27
Total

66
103

Total

3,489
3,489

Total

8
2
10

Note : 13 Short Term Loans and Advances


Advance Tax
Note : 13 other Current Assets
Preliminary Expenses
Interest accrued on Deposits
Computation of Net profit for Managerial Remuneration
Net Profit before Tax
Add:
Depreciation as per books
Salaries and perquisities to manager
Less:
Depreciation as per Sch XIV
Net profit for Managerial Remuneration
Remuneration entitled @ 1%
Already paid
Provision required

: 36 :

14,509
12,424
72
10,424
16,581
166
72
94