COMPANY FINAL ACCOUNTS

Illustration 1
Samsung one Ltd has opening credit balance in Surplus i.e. statement of Profit and Loss of
Rs.5,00,000. Opening balance of DRR is Rs.1,25,000. It earned a profit of Rs.2,00,000 for the
current year.It was decided to transfer 50,000 to DRR and also paid final dividend of Rs.1,00,000
on its Equity shares. Prepare notes to accounts on Reserves and surplus.

Illustration 2
Prime Stores Ltd has the following balances in Reserves and surplus:-
Debenture Redemption Reserve 5,00,000
Securities Premium Reserve 6,00,000
Surplus i.e. balance in statement of Profit and Loss A/c for the year 2021-22 (1,50,000)
During the year ended 30/03/2023 it earned a profit after tax of Rs. 5,00,000 .
It decided to appropriate 1,00,000 towards DRR , 1,25,000 towards General reserve and paid final
dividend of Rs.75,000. Prepare Notes to account on Reserves and Surplus.

Illustration 3
The balances appearing below were those remaining in the books of modern India Limited after
the statement of Profit and loss for the year ended 31st March 2023 had been prepared. Prepare
balance sheet and relevant notes to accounts:

Particulars Amount
Share Capital Authorised ; 10,000 shares of Rs.10 each, 40,000
issued 4,000 shares of Rs. 10each
6% Debentures (secured) (issued on 31.3.23) 9,000
Land 22,000
Machinery (cost less accumulated depreciation of 5,000) 15,000
Creditors 7,430
Debtors 16,150
Stock in Trade 12,920
Securities Premium Reserve 4,000
Surplus i.e. balance in statement of Profit and Loss (PY) 3,420
General Reserve 8,000
Fixtures (cost less accumulated depreciation of Rs.1,000) 1,200
Provision for doubtful debt 250
Cash at bank 15,030
Profit for the year upto 31st March 2023 10,200

1) General Reserve to be increased to Rs.10,000

2) Dividend @10% is declared and paid during the year but the effect was not passed in the
books.

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COMPANY FINAL ACCOUNTS

Illustration 4 (HW)

Following balances have been extracted from the books of Rama Ltd on 31st March 2023.
Particulars Amount
Equity Share Capital (1,00,000 shares of Rs.10 each) 10,00,000
Securities premium Reserve 2,00,000
12% Debentures 4,00,000
Creditors 2,00,000
Dividend payable (declared) 50,000
Surplus i.e. balance in Statement of Profit and loss A/c 50,000
Land and building 9,00,000
Government Bonds 6,00,000
Building under construction 3,50,000
Cash at Bank 50,000
Prepare Balance Sheet of the company as per schedule III of Companies Act 2013 and relevant
notes to accounts.

Illustration 5
Following is the Trial balance of Jay Ltd as on 31st March 2023
Particulars Debit Credit
Machinery 1,60,000
Land and Building 6,74,000
Depreciation on machinery 16,000
Purchase of Raw material (adjusted ) 4,00,000
Opening stock 1,50,000
Wages 1,20,000
Sales 10,00,000
Salaries 80,000
Bank Overdraft 2,00,000
10% Debentures (issued on 1st April 2022) 1,00,000
Authorized capital (5000 shares @ 100 each)
Issued subscribed and paid Equity Share Capital - Shares of Rs.100 4,00,000
each
Preference Share Capital -1000 6% Shares of Rs.100 each fully paid 1,00,000
Cash at bank 4,00,000
16,00,000
16,00,000
The company decided to make the following appropriations:-
• To declared and paid interim equity dividend @10% on paid-up capital which has not been
recorded in the books.
• To pay dividend on the preference share capital in full.
• To Transfer Rs.2,00,000 to General Reserve
• Closing stock at the end of the year is 1, 50,000.

Prepare Statement of Profit and Loss and Balance Sheet of the company as per schedule III of
Companies Act 2013.

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COMPANY FINAL ACCOUNTS

Illustration 6

From the following Trial Balance of West coast Ltd for the year ended 31st March 2023, prepare
Statement of Profit and Loss as per Part II of schedule III of the Companies Act 2013:
Particulars Debit Credit
Share Capital 15,00,000
Securities Premium Reserve 2,50,000
10% Debentures 5,00,000
Bank Overdraft 2,00,000
Dividend payable 2,50,000
Fixed Assets 17,50,000
Investments 4,50,000
Sale 42,50,000
Sale of scrap 50,000
Dividend on Investment 7,500
Opening Inventory of material 1,50,000
Purchase of Material 21,00,000
Opening Inventory of WIP 75,000
Opening Inventory of finished goods 1,25,000
Wages 6,00,000
Salaries 7,20,000
Staff Welfare 60,000
Interest on Debentures 50,000
Interest on bank loan 20,000
Depreciation 1,50,000
Carriage Inward 21,000
Audit fee 42,500
Advertisement expenses 75,000
Telephone and Internet Expenses 24,000
Courier Expenses 12,000
Power and electricity expenses 30,000
Bank charges 3,000
Administrative Expenses 30,000
Marketing & Selling Expenses 20,000
Cash at Bank 5,00,000
70,07,500 70,07,500
Closing inventory:
Material Rs.1, 25,000, WIP Rs.65,000, Finished Goods Rs.1,40,000. Provide for Tax @35% for
the current year.

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COMPANY FINAL ACCOUNTS

Illustration 7 (HW after 8)

Prepare the financial statement from the following trial balance of ZEE Ltd. as on 31st March
2023 as per Schedule III of the Companies (Amendment) Act, 2013.

Particular Dr. Cr.

Equity share Capital ( fully Paid shares of Rs. 10
each) 600
Cash on hand 54
Purchases 640
Land at Cost 440
Plant & machinery at Cost 1320
Furniture at Cost 320
Debtors 192
Balance with Bank 58
10% Debenture ( Issued on 31st March 2022) 400
General Reserve 260
Admin Expense 60
Salaries 200
factory Expense 120
Dividend Paid 36
Sales 1600
Creditors 104
Debenture Interest 40
selling expense 60
Profit and Loss A/c 144
Security Premium Account 80
Provision for depreciation 446
Outstanding Expense 8
Depreciation 102
Total 3642 3642

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 COMPANY FINAL ACCOUNTS

Illustration 8
Prepare the financial statements i.e. Balance sheet and Statement of Profit and Loss Account
from the following trial balance of AC Company Pvt. Ltd. for the year ended 31st March 2023.
Along with all notes to accounts.
Trial Balance as at 31st March, 2023
(in Lakhs)
Particulars Amount Particulars Amount
Stock 136000 Equity Shares Capital 500000
Furniture & Fixture 100000 (Shares of `10 each)
Discount 8000 11% Debentures 100000
Loan to Directors (Short
term) 16000 Bank Loans 129000
Advertisement 4000 Bills Payable 21000
Bad Debts 7000 Creditors 25200
Commission 24000 Sales 544400
Purchases 463800 Rent Received 9200
Plant and Machinery 172000 Balance in Profit & Loss A/c (Last year’s) 27800
Rentals 5000 Provision for Depreciation 29200
Current Account 9000
Cash 1600
Interest on Bank Loan 23200
Wages 180000
Consumables 16800
Office Equipment’s 49000
Goodwill 53000
Debtors 57400
Bills Receivables 30600
Dealer Commission 4200
Trade Expenses 14400
Distribution Freight 10800
13,85,800 13,85,800

Additional Information:
– Closing stock at the end of the year valued at 164,600
– Depreciation on plant & machinery @ 10%, furniture & fixtures @5% and Office Equipment’s
@5% to be provided.

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COMPANY FINAL ACCOUNTS

Illustration 9
Following is the trial balance of Kush Pvt Ltd.as on 31st March 2023
(in Lakhs)
Debit Balances Amount Credit balances Amount
Land at cost 220 Equity Share Capital 300
Plant and Machinery at cost 610 (Fully paid shares of Rs.10 each)
Furniture at cost 160 10 % Debentures 200
Debtors 96 General Reserve 130
st
Stock on 31 March ,2023 86 Profit & Loss Account 72
Balance with Bank 18 Securities Premium Account 40
Cash on hand 2 Sales 700
Adjusted purchases of material 320 Creditors 52
Administrative Expenses 30 Provision for depreciation 72
furniture
Salary Expenses 60 Provision for depreciation Plant 100
and Mach
Selling expenses 30 Suspense Account 4
Debenture Interest 20
Interim Dividend paid 18
1670 1670

1) Suspense account of Rs.4 lakh represents cash received for sale of some of the machinery
for which cash has been debited correctly. The cost of the machinery was Rs.10 lakh and
the accumulated depreciation thereon was Rs.8 lakh. The entry for disposal of the
machinery has not yet been made.

2) Depreciation is to be provided on Plant and Machinery and Furniture @10 % on SLM

basis.

You are required to prepare Balance sheet and Statement of Profit and Loss for the year ended 31st
March 2023 along with relevant schedules/notes to accounts.

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COMPANY FINAL ACCOUNTS

Illustration 10

Following is the trial balance of Hafees Ltd as on 31st March, 2023

Particulars Debit Credit

Opening Stock 7500
Purchases and sales 23500 34000
Debtors and Creditors 2,750 1750
Wages 3,000
Discount Earned 300
Carriage Inward 95
Furniture & Fixture 1700
Salaries 750
Rent 400
Sundry office expenses 705
Profit and Loss A/c (opening balance) 1653
Dividend paid 1053
Equity Share Capital ( Face value of Rs.10) 10000
Plant and Machinery 2900
Balance with Bank 4620
General Reserve 1550
Patents and trade marks 480
Bills Receivable and Bills payable 500 700
49953 49953

Prepare Statement of Profit and Loss for the year ended 31st March, 2023, Balance Sheet as at that
date along with all notes to accounts after taking into consideration the following adjustments also:
• Stock on 31st March 2023 was valued at Rs.7924
• Make a provision for income tax @31%
• Depreciate Plant and Machinery @15%, Furniture and fittings @10%and patents and
trademarks @5%
• At the end of the financial year outstanding rent was Rs.80 while outstanding salaries
totaled Rs.65
• Provide for managerial remuneration @10% of Net Profit before tax but after such
Managerial Remuneration

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COMPANY FINAL ACCOUNTS

Illustration 11

From the following particulars furnished by Pioneer Ltd, prepare the balance sheet as at 31st March
2023.

Particulars Debit Credit

Fully paid Equity Share Capital(Rs.10 each) 10,00,000
Land 2,00,000
Buildings 3,50,000
Plant & Machinery 5,25,000
Furniture 50,000
General Reserve 2,21,300
Loan from State Finance Corporation 1,50,000
Stocks:
Finished Goods 2,00,000
Raw material 50,000
Provision for taxation 46,500
Sundry Debtors 2,00,000
Advances (current) 43,700
Dividend payable 70,200
Profit & loss Account 1,00,000
Cash on hand 43,300
Balance with bank 2,47,000
Loans (Unsecured) 1,21,000
Sundry Creditors (for goods & expenses) 2,00,000
Total 19,09,000 19,09,000
The following additional information is also provided
• 2,000 equity shares were issued for consideration other than cash
• Debtors of Rs.52,000 are due for more than 6 months
• The cost of the assets
o Building 4,00,000
o Plant & Machinery 7,00,000
o Furniture 62,500
• The balance of Rs. 1, 50,000 in the loan from State Finance Corporation Account is
inclusive of Rs.7, 500 for interest accrued but not due. The loan is secured by hypothecation
of the Plant and Machinery.
• Balance with bank includes Rs.2,000 with Perfect Bank Ltd; which is not a scheduled bank.

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COMPANY FINAL ACCOUNTS

Illustration 12

Particulars Dr. Particulars Cr.

Building 2,90,000 Sales 5,20,000

Machinery 1,00,000 salaries outstanding 2,000

closing stock 90,000 prov. For bad debts 3,000

Purchases (adjusted) 2,10,000 share capital 2,00,000

Salaries 60,000 general reserve 40,000

directors fee 10,000 profit and loss 25,000

Rent 26,000 Creditors 92,000

Depreciation 20,000 Prov. for dep:

bad debts 6,000 Building 50,000

Int. accrued on investment 2,000 Machinery 55,000

Investment (12,000 shares of A
ltd. Of Rs.10 each) 1,20,000 14% debentures 2,00,000
int. on debentures accrued
Debenture int. 28,000 but not due 14,000

advance tax 60,000 Interest on investment 12,000

sundry expenses 18,000 unclaimed dividend 5,000

Debtors 1,25,000
Bank 53,000

Total 12,18,000 Total 12,18,000

You are required to prepare profit & loss account for the year ending 31st March 2023 and balance
sheet as at that date after considering:
i) Closing stock is more than opening by Rs.30,000
ii) Provide for bad and doubtful debts @4% on debtors.
iii) Make provision for income tax @50%
iv) Depreciation expenses includes depreciation of Rs.8000 on building and that of
Rs.12,000 on Machinery.
v) The directors recommend a dividend of 25%.

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COMPANY FINAL ACCOUNTS

Illustration 13

Particulars Dr. Cr
building at cost 5,00,000
machinery at cost 15,00,000
opening stock 1,20,000
purchases 41,00,000
misc. expense 12,000
bad debts 21,000
interim dividend paid 50,000
Trading expenses 2,30,000
advance tax 35,000
auditors fee 60,000
Debtors 5,00,000
Bank 49,000
Sales 58,40,000
Returns 24,000 30,000
prov. For bad debts 40,000
share capital 10,00,000
profit and loss 3,60,000
Creditors 1,60,000
Provision for depreciation:
Building 80,000
Machinery 2,90,000
12% bank loan 2,00,000
Office salaries 4,49,000
Directors remuneration 3,50,000
80,00,000 80,00,000

Additional Information:
i) Closing was Rs.200000
ii) Depreciate building by 5% on cost and plant & mach. @ 10% on cost.
iii) Make provision for tax @40%
iv) Provision for bad debts is to be created at 2% on debtors.
v) A machine purchased for Rs.50000 was wrongly debited to purchases.
vi) Bank loan was raised on 1st Oct. 2022.

Prepare final accounts of the company for the year ended 31st March 2023.

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