Unit 3: Financial Statements of a Company

Q1Written answer

Show the following items in the balance sheet as per the provisions of the Companies Act, 2013 in Schedule III:

Particulars	₹	Particulars	₹
Preliminary Expenses	2,40,000	Good will	30,000
Discount on the 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 receivable	1,20,000

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The solution to this question is as follows:

Extract of Balance Sheet as of March 31, 2013
Particulars	Note No.	Amount (₹)
I. Equity and Liabilities
1. Shareholders’ Funds
a. Share Capital
b. Reserves and Surplus
2. Non-Current Liabilities
Long-term Borrowings	1	2,00,000
3. Current Liabilities
Other Current Liabilities
b. Short-term Provisions	2	16,000

II. Assets
1. Non-Current Assets
Fixed Assets
i. Tangible Assets	3	4,75,000
ii. Intangible Assets	4	30,000
b. Non-Current Investments
2. Current Assets
Inventories	5	1,52,000
b. Trade Receivables	6	1,20,000
c.Cash and Cash Equivalents	7	1,35,000
d. Other Current Assets	8	2,60,000

Notes to Accounts
Particulars			Amount (₹)
1. Long-Term Borrowings
10% Debentures			2,00,000

2. Short-Term Provisions
Provision for Tax			16,000

3. Tangible Assets
Motor Vehicles			4,75,000

4. Intangible Assets
Goodwill			30,000

5. Inventory
Loose Tools	12,000
Stock	1,40,000		1,52,000
			1,52,000

6. Trade Receivables
Bill Receivable			1,20,000

7. Cash and Cash equivalents
Cash at Bank			1,35,000

8. Other Current Assets
Preliminary Expenses		2,40,000
Discount on Issue of Shares		20,000	2,60,000
			2,60,000

Q2Written answer

On 1^st Aril, 2017, Jumbo Ltd. issued 10,000; 12% debentures of ₹. 100 each, a discount of 20%, redeemable after 5 years. The company decided to write off discounts on the issue of such debentures over the lifetime of the Debentures. Show the items in the balance sheet of the company immediately after the issue of these debentures.

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Balance Sheet as of April 01, 2017
Particulars	Note No.	Amount (₹)
I. Equity and Liabilities
1. Shareholders’ Funds
a. Share Capital
b. Reserves and Surplus
2. Non-Current Liabilities
a. Long-term Borrowings	1	10,00,000
3. Current Liabilities
a. Other Current Liabilities
b. Short-term Provisions
Total		10,00,000

II. Assets
1. Non-Current Assets
a. Other Non-Current Assets	2	1,60,000
2. Current Assets
a. Other Current Assets	3	40,000
b. Cash and Cash Equivalents	4	8,00,000
Total		10,00,000

Notes to Accounts
Particulars	Amount (₹)
1. Long-Term Borrowings
12% Debentures	10,00,000

2. Other Non-current assets
Unamortized discount on issue of Debentures	1,60,000

3. Other Current Assets
Unamortized discount on issue of Debentures	40,000

4. Cash and Cash Equivalents
Bank	8,00,000

Q3Written answer

From the following information, prepare the balance sheet of Gitanjali Ltd., as per the (Revised) Schedule VI:

Inventories ₹. 14,00,000; Equity Share Capital ₹. 20,00,000; Plant and Machinery ₹. 10,00,000; Preference Share Capital ₹. 12,00,000; Debenture Redemption Reserve ₹. 6,00,000; Outstanding Expenses ₹. 3,00,000; Proposed Dividend ₹. 5,00,000; Land and Building ₹. 20,00,000; Current Investments ₹. 8,00,000; Cash Equivalent ₹. 10,00,000; Short-term loan from Zaveri Ltd. (A Subsidiary Company of Twilight Ltd.) ₹. 4,00,000; Public Deposits ₹. 12,00,000.

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Balance Sheet as on
Particulars	Note No.	Amount (₹)
I. Equity and Liabilities
1. Shareholders’ Funds
a. Share Capital	1	32,00,000
b. Reserves and Surplus	2	6,00,000
2. Non-Current Liabilities
a. Long-term Borrowings	3	12,00,000
3. Current Liabilities
a. Other Current Liabilities	4	3,00,000
b. Short-term Borrowings	5	4,00,000
c. Short-term Provisions	6	5,00,000
Total		62,00,000

II. Assets
1. Non-Current Assets
a. Fixed Assets
i. Tangible Assets	7	30,00,000
ii. Intangible Assets
b. Non-Current Investments
2. Current Assets
a. Inventories		14,00,000
b. Current Investments		8,00,000
c. Cash and Cash Equivalents		10,00,000
Total		62,00,000

Notes to Accounts
Particulars			Amount (₹)
1. Share Capital
Equity Share Capital	20,00,000
Preference Share Capital	12,00,000		32,00,000
			32,00,000

2. Reserve and Surplus
Debenture Redemption Reserve			6,00,000

3. Long-term Borrowings
Public Deposits			12,00,000

4. Other Current Liabilities
Outstanding Expenses			3,00,000

5. Short-term Borrowings
Loan from Zaveri Ltd.			4,00,000

6. Short-Term Provisions
Proposed Dividend			5,00,000

7. Tangible Assets
Land and Building		20,00,000
Plant and Machinery		10,00,000	30,00,000
			30,00,000

Q4Written answer

From the following information, prepare the balance sheet of Jam Ltd. as per the (revised) Schedule VI:

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Worked solution

Inventories ₹. 7, 00,000; Equity Share Capital ₹. 16, 00,000; Plant and Machinery ₹. 8, 00,000; Preference Share Capital ₹. 6, 00,000; General Reserve’s ₹. 6, 00,000; Bills payable ₹. 1, 50,000; Provision for taxation ₹. 2, 50,000; Land and Building ₹. 16, 00,000; Noncurrent Investments ₹. 10, 00,000; Cash at Bank ₹. 5, 00,000; Creditors ₹. 2, 00,000; 12% Debentures ₹. 12,00,000.

The solution to this question is as follows:

Balance Sheet as of March 31, 2013
Particulars	Note No.	Amount (₹)
I. Equity and Liabilities
1. Shareholders’ Funds
a. Share Capital	1	22,00,000
b. Reserves and Surplus	2	6,00,000
2. Non-Current Liabilities
a. Long-term Borrowings	3	12,00,000
3. Current Liabilities
a. Short-term Borrowings
b. Trade Payables	4	3,50,000
c. Short-term Provisions	5	2,50,000
Total		46,00,000

II. Assets
1. Non-Current Assets
a. Fixed Assets
i. Tangible Assets	6	24,00,000
b. Non-Current Investments		10,00,000
2. Current Assets
a. Inventories		7,00,000
b. Cash and Cash Equivalents	7	5,00,000
Total		46,00,000

Notes to Accounts
Particulars				Amount (₹)
1. Share Capital
Equity Share Capital		16,00,000
Preference Share Capital		6,00,000		22,00,000
				22,00,000

2. Reserve and Surplus
General Reserve				6,00,000

3. Long-Term Borrowings
12% Debentures				12,00,000

4. Trade Payables
Creditors			2,00,000
Bills Payable			1,50,000	3,50,000
				3,50,000

5. Short-Term Provisions
Provision for Taxation				2,50,000

6. Tangible Assets
Land and Building	16,00,000
Plant and Machinery	8,00,000			24,00,000
				24,00,000

7. Cash and Cash Equivalents
Bank				5,00,000

Q5Written answer

Prepare the balance sheet of Jyoti Ltd. as of March 31, 2017, from the following information:

Building ₹. 10,00,000; Investments in the shares of Metro Tyers ₹. 3,00,000; Stores & Spares ₹. 1,00,000; Discount on issue of 10% debentures ₹. 10,000; Statement of Profit and Loss (Dr.) ₹. 90,000; 5,00,000 Equity Shares of ₹. 20 each fully paid-up; Capital Redemption Reserve ₹. 1,00,000; 10% Debentures ₹. 3,00,000; Unpaid dividends ₹. 90,000; Share options outstanding account ₹. 10,000.

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The solution to this question is as follows:

Balance Sheet as of March 31, 2017
Particulars	Note No.	Amount (₹)
I. Equity and Liabilities
1. Shareholders’ Funds
a. Share Capital	1	10,00,000
b. Reserves and Surplus	2	10,000
2. Non-Current Liabilities
Long-term Borrowings	3	3,00,000
3. Current Liabilities
Other Current Liabilities	4	1,00,000
Total		14,10,000

II Assets
1. Non-Current Assets
a. Fixed Assets
i. Tangible Assets	5	10,00,000
b. Non-Current Investments	6	3,00,000
2. Current Assets
a. Inventories	7	1,00,000
b. Other Current Assets	8	10,000
Total		14,10,000

Notes to Accounts
Particulars			Amount (₹)
1. Share Capital
Equity Share Capital (50,000* shares of ₹ 20 each)			10,00,000

2. Reserve and surplus
Capital Redemption Reserve		1,00,000
Less: Statement of Profit or Loss (Debit)		90,000	10,000
			10,000
3. Long-term Borrowings
10% Debentures			3,00,000

4. Other Current Liabilities
Unpaid Dividend	90,000
Share Option Outstanding	10,000		1,00,000
			1,00,000

5. Tangible Assets
Building			10,00,000

6. Non-Current Investments
Shares of Metro Tyres			3,00,000

7. Inventory
Stores and Spares			1,00,000

8. Other Current Assets
Discount on Issue of 10% Debentures			10,000

Q6Written answer

Brinda Ltd. has furnished the following information:

(a) 25,000, 10% debentures of ₹. 100 each;

(b) Bank Loan of ₹. 10,00,000 repayable after 5 years;

(c) Interest on debentures is yet to be paid.

Show the above items in the balance sheet of the company as of March 31, 2017.

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The solution to this question is as follows:

Extract of Balance Sheet as of March 31, 2017
Particulars	Note No.	Amount (₹)
I. Equity and Liabilities
1. Shareholders’ Funds
a Share Capital
b. Reserves and Surplus
2. Non-Current Liabilities
Long-term Borrowings	1	35,00,000
3. Current Liabilities
Other Current Liabilities	2	2,50,000

Notes to Accounts
Particulars		Amount (₹)
1. Long-Term Borrowings
12% Debentures	25,00,000
Bank Loan	10,00,000	35,00,000
		35,00,000

2. Other Current Liabilities
Interest on Debentures		2,50,000

Q7Written answer

Prepare a balance sheet of Black Swan Ltd., as of March 31, 2017, from the following information:

General Reserve	:	3,000
10% Debentures	:	3,000
Statement of Profit & Loss	:	1,200
Depreciation on fixed assets	:	700
Gross Block	:	9,000
Current Liabilities	:	2,500
Preliminary Expenses	:	300
6% Preference Share Capital	:	5,000
Cash & Cash Equivalents	:	6,100

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Worked solution

The solution to this question is as follows:

Extract of Balance Sheet as of March 31, 2017
Particulars	Note No.	Amount (₹)
I. Equity and Liabilities
1. Shareholders’ Funds
a. Share Capital	1	5,000
b. Reserves and Surplus	2	4,200
2. Non-Current Liabilities
a. Long-term Borrowings	3	3,000
3. Current Liabilities		2,500
Total		14,700

II. Assets
1. Non-Current Assets
a. Fixed Assets
i. Tangible Assets	4	8,300
2. Current Assets
a. Cash and Cash Equivalents	5	6,100
b. Other Current Assets	6	300
Total		14,700

Notes to Accounts
Particulars			Amount (₹)
1. Share Capital
6% Preference Share Capital			5,000

2. Reserve and Surplus
General Reserve		3,000
Statement of Profit or Loss		1,200	4,200
			4,200

3. Long-Term Borrowings
10% Debentures			3,000

4. Tangible Assets
Fixed Assets	9,000
Less: Depreciation	700		8,300
			8,300

5. Cash and Cash Equivalents
Cash			6,100

6. Other Current Assets
Preliminary Expenses			300

Concepts covered in this chapter –

Meaning of financial statements
Nature of financial statements
Objectives of financial statements
Types of financial statements
Limitations of financial statements

Conclusion

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Numerical Questions for NCERT Accountancy Solutions Part 2 Class 12 Chapter 3