ADVANCED ACCOUNTING

Company Accounts
Company Final Accounts

Short Answer Questions

1. From the following particulars pertaining to Jai Co., Ltd. Prepare Profit and Loss
Statement for the year ended 31-3-2015.
Amount
Cost of material consumed 1,20,000
Revenue from Operations 3,57,000
Other Income 23,000
Employee Benefit Expenses 85,000
Finance Cost 37,000
Depreciation 18,000
Provision for Taxation 50 % of Taxable Income.

2. From the following particulars relating to Sohan Co., Ltd., prepare Balance Sheet of the
Company as at 31-3-2015.
Amount
Share Capital
50,000 Equity Shares of Rs. 10 each fully paid 5,00,000
Tangible Assets 10,60,000
Intangible Assets 3,20,000
General Reserve 2,35,000
Surplus in Profit and Loss Statement 1,30,000
Long Term Borrowings 6,75,000
Inventories on 31-3-2015 2,65,000
Trade Payable 1,72,000
Short Term Borrowings 2,23,000
Non Current Investments 1,60,000
Current Investments 70,000
Trade Receivables 35,000
Cash and Cash Equivalents 25,000

3. From the following particulars ascertain the change in inventories.

Amount
Raw material purchased 3,00,000
Work-in-Progress on 1-4-2014 20,000
Finished Goods on 1-4-2014 1,00,000
Raw material on 1-4-2014 70,000
Finished goods on 31-3-2015 75,000
Work-in-Progress on 31-3-2015 25,000
Raw materials on 31-3-2015 60,000
 -2-

4. Show how the following balance will appear in Balance Sheet after the required
adjustments on 31-3-2015.
Amount
Equity Share Capital – Paid up 5,00,000
General Reserve on 1-4-2014 2,00,000
Surplus in Profit and Loss Statement on 1-4-2014 1,00,000
Profit for the year 2014-15 after tax 4,50,000
Adjustments
1. Declared Dividends 10 %.
2. Trasnfer to General Reserve Rs. 75,000.
3. Corporate Dividend Tax Rate 15 % + Surcharge 12 % + Education Cess 3 %.
4. Ignore grossing up of dividend.

5. From the following particulars, Prepare Balance Sheet (Liabilities part) Equity and
Liabilities (pertaining to Balance Sheet) of Pratham Co., Ltd.
Amount
Share Capital
10,000 Equity Shares of Rs. 10 each fully paid 1,00,000
Short Term Borrowings 15,000
10 % Debentures 60,000
General Reserve 30,000
Trade Payables 24,000
Provision for Employees Retirement Benefit 27,000
Long Term Borrowings from Banks 15,000
Capital Reserve 20,000
Share Application money Pending Allotment 7,000
Unpaid Dividends 4,000
Securities Premium Reserves 5,000
Profit and Loss Statement -- Profit after tax 35,000
Provision for Taxation 12,000
Interest on Debentures --- Outstanding 3,000

6. From the following information pertaining gto Ashish Co., Ltd. Prepare Assets (part of
Balance Sheet) as at 31-3-2015.
Amount
Goodwill 17,000
Investments -- Non current 15,000
Interest accrued on Investment 3,000
Inventories on 31-3-2015 32,000
Investments – Current 18,000
Building Cost Rs. 4,50,000, Depreciation written off Rs. 30,000 4,20,000
Plant Cost Rs. 1,00,000, Depreciation written off Rs 16,000 84,000
Patents 15,000
Trade Receivables 24,000
 -3-

Bills Receivables (Trade) 3,000

Furniture Cost Rs. 15,000, Depreciation wirtten off Rs. 3,000 12,000
Balance at Bank 25,000
Cash on Hand 2,000
Vehicle Cost Rs. 20,000 less depreciation written off Rs. 2,000 18,000
Office Equipment 14,000

Main Problems

1. From the following particulars pertaining to Narender Co. Ltd., for the year ending 31-3-
2015, prepare profit and loss statement for the year ending 31-3-2015.
Amount
Cost of material consumed 6,30,000
Establishment Expenses 2,15,000
Sale of Products 16,65,000
Repair and Renewals 30,000
Motor Car Expenses 25,000
Travelling and Conveyance 32,000
Advertisement 27,000
Printing and Stationary 12,000
Audit Fees 15,000
Rates, Taxes and Insurance 9,000
Loss on sale of Investments 10,000
Depreciation on Assets 24,000
Interest on Debentures 15,000
Interest on other borrowings 12,000
Interest received 25,000
Dividend received 15,000
Power and Electricity Expenses 17,000
Provision for Taxation (50 % of Taxable Income)

2. From the following particulars relating to Eshan Co., Ltd., for the year ended 31st march
2013, prepare profit and loss statement for the year ended 31st march 2013.
Amount
Opening stock of raw material 1,20,000
Purchase of raw material 5,80,000
Closing stock of raw material 1,30,000
Salaries and Wages 75,000
Interest on Loan taken 15,000
Interest paid on debentures 12,000
Depreciation and amortization expenses 29,000
Repairs and Renewals 3,000
Travelling and Conveyance 4,000
 -4-

Advertising 9,000
Telephone Charges 12,000
Sale of Products 7,50,000
Audit fees 20,000
Rates, Taxes and Insurance 5,000
Interest received 6,000
Dividend received 13,000
Motor Car Expenses 16,000
Manager’s Remuneration 18,000
Director’s Fees 7,000

3. From the following information provided by Rohan Co., Ltd., prepare Profit and Loss
Statement for the year ended 31st march 2015.
(Rs. 000)
Cost of material consumed 186
Sale of Products 457
Salaries and Wages 63
Contribution to Provident Fund 12
Interest Income 83
Depreciation 16
Auditor’s Remuneration 10
Rent 12
Repairs 8
Insurance 7
Managing Directors Remuneration 12
Dividend Income 24
Interest on loan taken 14
Net gain on sale of Investments 12
Provision for taxation 50 % of taxable income.

4. From the following particulars furnished by Vidyadhar Company Ltd., prepare Statement
of Profit and Loss for the year ended 31st march 2015.
Amount
Purchase of raw material 6,37,000
Sale of Products 13,58,000
Salaries and Wages 1,20,000
Inventories on 1-4-2014
Work in Progress 21,000
Finished Goods 1,15,000
Raw materials and Stores 52,000
Repairs and Renewals 2,500
Motor Car expenses 13,000
Travelling Expenses 9,000
 -5-

Printing and Stationary 8,000

Telephone Charges 4,300
Interest on Debentures paid for 6 months 5,000
Audit fees 6,000
Advertisement 9,800
Directors fees 8,700
Managing Director’s Remuneration 13,900
Miscellaneous Income 3,500
Fixed Assets (WDV) 6,20,000
Trade Receivables 70,000

Additional Information
1. Inventories on 31-3-2015
Raw material and Stores 57,000
Work in Progress 25,000
Finished Goods 1,22,000
2. Depreciate fixed assets at 10 % on WDV.
3. Provide for outstanding salaries and wages Rs. 15,000 and audit fees Rs. 1,400.
4. Make a provision for Doubtful Debts at 5 % on Trade Receivables.
5. Make a provision for taxation at Rs. 2,30,000.
6. Provide for interest on debentures for six months.

5. From the following information pertaining to Srinivas Co., Ltd., for the year ended 31st
march 2015, prepare Balance Sheet of the Company as per Schedule III, Part I of the
Companies Act 2013.
Amount
Share Capital
Subscribed and Called up 4,00,000
Fixed Assets (Tangible) 6,00,000
Share Application money pending allottment 10,000
Reserves and Surplus 90,000
Cash and Cash Equivalents 1,20,000
Calls in Arrears 10,000
Long Term Borrowings 5,00,000
Trade Receivables 80,000
Trade Payables 20,000
Inventories 20,000
Non-Current Investments 2,00,000
Declared Dividends 10,000

6. From the list of the following assets and liabilities prepare Balance Sheet of Subodh
Company Ltd., as per Schedule III, Part I of the Companies Act, 2013.
Amount
Sundry Creditors 1,40,000
Calls in Arrears 80,000
 -6-

Cash in Hand 30,000

Cash at Bank 1,20,000
Discount on Issue of Shares 5,000
Goodwill 50,000
Interest payable on Debentures 30,000
10 % Debentures 6,00,000
Debtors 1,50,000
Less : Provision 15,000 1,35,000
Bills Payable 65,000
Cheques and Drafts on hand 10,000
Share Capital
Subscribed and Called up 8,00,000
Investment in Govt. Bonds 90,000
Preliminary Expenses 10,000
Loans and Advances to Staff 90,000
Buildings 5,50,000
Plant and machinery 6,30,000
Inventory 40,000
Furniture 20,000
Profit and Loss (Cr Balance) 75,000
General Reserve 1,50,000

7. The following balances have been extracted from the books of Sunil Company Ltd., as
at 31st march 2015.
Amount
Equity Share Capital
Fully paid shares of Rs. 100 each 4,00,000
Cash and Bank Balance 50,000
Bills Receivable 20,000
Fixed Assets
Tangible Assets at cost 6,60,000
Inventories 40,000
Creditors 30,000
Accumulated Depreciation 30,000
Provision for Taxation 25,000
5 % Debentures 2,00,000
Unsecured Loans from Subsidiaries (Long Term) 50,000
General Reserve 1,00,000
Investment (Long Term) 70,000
Underwriting Commission 5,000
Interest accrued and due on debentures 10,000

You are required to prepare Balance Sheet of the Company as prescribed by Schedule
III of Companies Act 2013.
 -7-

8. From the following particulars of Pravek Co., Ltd., prepare Balance Sheet as prescribed
by the Companies Act 2013.
Amount
Profit and Loss (Dr) Balance 2,00,000
12 % Debentures 2,00,000
Declared Dividends 20,000
Equity Share Capital
(shares of Rs. 10 each) 5,00,000
Preference Share Capital
(shares of Rs. 100 each) 4,00,000
Stock in Trade 88,000
Bills Receivable 20,000
Plant and machinery 2,20,000
Stores and Spares 10,000
12 % Tata Steel Debentures of Rs. 100 each (Long Term) 2,00,000
Buildings 3,15,000
Prepaid Expenses 50,000
Bank Overdraft 50,000
Security Deposit for telephone 5,000
Bills Payable 75,000
Brands 1,10,000
Interest accrued on Investment 12,000
Share Application money pending allottment 40,000
Employee earned leave payable on Retirement 45,000
Computer Software on Development 1,20,000
Premium payable on Redemption of Debentures 20,000

9. From the following particulars furnished by Shubham Co., Ltd., prepare Balance Sheet
as at 31st march 2015.
Debit Credit
Share Capital (10,000 equity shares of Rs. 100 each) 10,00,000
Calls in Arrears 1,000
Land 2,00,000
Buildings 3,50,000
Plant and machinery WDV 5,25,000
Furniture WDV 50,000
General Reserve 2,10,000
Loan from Bank 1,50,000
Stock
Finished Goods 1,75,000
Raw material 75,000 2,50,000
Provision for taxation 68,000
Sundry Debtors 2,00,000
Advances (Short Term) 42,700
Profit after provision for tax 1,46,700
 -8-

Cash Balance 30,000

Cash at Bank 2,47,000
Loans (Unsecured) 1,21,000
Sundry Creditors 2,00,000
18,95,700 18,95,700

10. From the following information provided by Aalok Co., Ltd., prepare Balance Sheet of
the Company as at 31-3-2015.
Amount
Share Capital
40,000 Equity Shares of Rs. 100 each fully paid up 40,00,000
Sundry Creditors 13,45,000
Long Term Debts (Secured) 10,00,000
Cash and Bank Balance 2,75,000
Advances (Short Term) 3,72,000
Advances to Staff 55,000
Provision for taxation 1,70,000
Securities Premium 4,75,000
Loose Tools 50,000
General Reserve 20,50,000
Investment ---- Non Current 2,25,200
Loss for the year 3,58,000
Sundry Debtors 12,25,000
Provision for Doubtful Debts 20,200
Stock of Finished Goods and Stores 11,50,000
Fixed Assets (WDV) 53,50,000

11. Devi Ltd., presents the following information after preparation of profit and loss
statement.
Debit Credit
Building 2,40,000 Share Capital 2,00,000
Machinery 45,000 General Reserve 34,000
Investments 2,40,000 14 % Debentures 3,00,000
Stock 90,000 Creditors 99,000
Loose Tools 25,000 Provision for Tax 76,000
Debtors 1,20,000 Profit and Loss (op. Balance) 25,000
Bank 30,000 Net Profit 1,16,000
Advance Tax 60,000
8,50,000 8,50,000
Prepare Balance Sheet according to revised schedule III from the above balances after
taking into consideration the following :
1. Transfer Rs. 12,000 to general reserve.
2. The directors declared dividend @ 25 %.
3. Ignore grossing up of dividend.
4. Provide Corporate Dividend Tax : 15 % + 12 % Surcharge + 3 % Education Cess.
 -9-

12. From the undermentioned trial balance of Encore Ltd., prepare Profit and Loss Statement
for the year ended 31-3-2015 and Balance Sheet as on 31-3-2015.

Amount Amount
Freehold Premises 90,000 Sales 1,35,000
Purchases 75,000 Discount Received 1,200
Salaries 3,000 Transfer Fees 150
Plant and machinery 40,000 General Reserve 5,000
Sundry Debtors 22,500 Sundry Creditors 10,250
Wages 5,000 Profit and loss statement
Rent 1,800 balance on 1-4-2014 40,000
Bad Debts 250 Share Capital
Stock on 1-4-2014 10,500 10,000 equity shares of
Income Tax 12,000 Rs. 10 each 1,00,000
Dividend 13,000
Interim Dividend 8,000
Insurance Premium 90
Cash at Bank 7,500
Cash in Hand 2,960
2,91,600 2,91,600
The following adjustments have to be made :

(a) Depreciate Plant and machinery at 10 %.

(b) Stock on 31--3-2015 amounted to Rs. 18,000,
(c) Provision for Doubtful Debts on Sundry Debtors at 5 %.
(d) Transfer Rs. 5,000 to General Reserve.
(e) Salaries Outstanding Rs. 2,000.

13. From the following Trial Balance and Adjustments given, prepare final accounts of
Kakatiya Industries Ltd., for the year ending 31-3-2015 as per the provisions of
Companies Act.
Trial Balance

Opening Stock of Raw Sales 35,000

Material 7,500 Share Capital
Purchase of Raw (Shares of Rs. 10
Material 24,500 each) 15,000
Fixed Assets 7,900 Discount 500
Cash 1,345 Profit and Loss
Wages 5,000 balance on
Discount 700 31-3-2014 1,500
Salaries 2,700 Creditors 2,750
Postage and Office Exp 775 Reserves 1,800
 -10-

Dividend (Interim) paid

In 2014 900
Debtors 4,750
Bad Debts 150
Cash at Bank 330
56,550 56,550
Adjustments :

(i) Closing Stock of raw material Rs. 7,900.

(ii) Provide Depreciation on fixed assets at 10 % per annum.
(iii) Make a provision of 5 % on debtors towards doubtful debts.
(iv) Salaries outstanding Rs. 300.

14. The following is the Trial Balance of Pravek Co., Ltd., as at 31-3-2015. prepare Profit
and Loss Statement for the year ended 31-3-2015 and Balance Sheet as that date.

Debit Credit

Rent paid 18,000 Share Capital

Advertising 13,000 20,000 equity shares of
Buildings 1,00,000 Rs. 10 each fully paid 2,00,000
Vehicles 1,10,000 10 % Debentures 2,00,000
Trade marks 20,000 Securities Premium 20,000
Excise Duty 25,000 Trade Payable 55,000
Opening Stock of Raw General Reserve 1,60,000
Material 75,000 Sales 10,75,000
Plant and machinery 2,50,000 Dividend Income 5,000
Furniture 50,000 Share Application money
Discount 8,000 pending allotment 10,000
Bad Debts 6,000 Bank loan (secured) 50,000
Commission 7,000
Purchase of raw material 5,25,000
Interest on bank loan 15,000
Interest on debentures 20,000
Salaries and Wages 1,40,000
Contribution to PF 20,000
Computer Software 80,000
Audit fees 25,000
Trade Receivables 70,000
Repairs to Buildings 5,000
Investments -- Current 18,000
Goodwill 75,000
Cash at Bank 90,000
Cash on Hand 10,000
17,75,000 17,75,000
 -11-
Adjustments :
1. Closing Stock of raw material Rs. 1,00,000.
2. Provide for outstanding wages and salaries Rs. 20,000.
3. Make provision for taxation at 50 %.
4. Depreciate :
Plant and machinery 10 %.
Furniture 10 %.
Computer Software 20 %.

15. The following Trial Balance is extracted from the books of ABC Co., Ltd., as at 31-3-
2015.

Debit balances Amount Credit balances Amount

Stock on 1-4-2014 1,00,000 Trade Creditors 1,00,000
Buildings 1,30,000 Equity Capital 2,80,000
(cost Rs. 1,50,000) Bank Loan 56,000
Purchases 2,08,000 P & L Account 20,000
Wages 50,000 Share Trasfer Fees 6,500
Salaries 32,000 Sales 3,57,000
Insurance 14,900 Provision for bad debts 1,500
Debenture Interest 3,000 General Reserve 15,000
Machinery 1,60,000 6 % Debentures 1,00,000
(depreciation upto 31-3-2014
Rs. 40,000)
Goodwill 3,000
Investments 86,000
Carriage on Sales 8,900
Bad Debts 1,000
Administrative Expenses 14,200
Cash at Bank 5,000
Debtors 1,19,000
Preliminary Expenses 1,000
9,36,000 9,36,000
Adjustments :
(a) Closing Stock on 31-3-2015 was valued at Rs. 1,20,000 however, its cost
price was Rs. 1,25,000.
(b) Provide depreciation on Buildings @ 5 % on written down value and on
machinery at 10 % on cost.
(c) Write off Goodwill and preliminary expenses.
(d) Provide for bad debts @ 5 % on debtors.
(e) Directors recommended :
(i) Transfer to General Reserve 10 % of net profits.
(ii) A dividend of 10 % declared.
Ignore Corporate Dividend Tax.
You are required to prepare Profit and Loss Statement for the year ended 31-3-2015
and Balance Sheet as on that date as per the provisions of the revised Schedule III.
 -12-

16. From the following balances prepare Profit and Loss Statement for the year ended 31-3-
2015 and Balance Sheet as at that date :

Amount Amount
Purchase of Raw material 5,69,842 Bank Overdraft 18,060
Stock of raw material on Bills Payable 30,900
1-4-2014 68,892 Share Capital (25,000
Patents 1,560 equity shares of Rs.10
Freehold Premises 55,026 each) 2,50,000
Productive Wages 25,090 Unclaimed Dividends 1,106
Unproductive Wages 22,060 Provision for Bad Debts 1,150
Unpaid Call Account 200 Sundry Creditors 39,086
Cash in hand 725 Return Outwards 5,500
Bad Debts 476 Sales 5,91,803
Repairs to Buildings 5,056 Rent from property 2,260
Interest on Bank Overdraft 1,260
Plant and machinery 80,140
Salaries 33,400
Directors Fees 6,400
Bills Receivable 6,060
Auditors fees 3,000
Rates and Taxes 7,576
Debtors 45,000
Sundry Office Expenses 1,052
Profit and Loss Statement
(loss from previous year) 7,050
9,39,865 9,39,865

The following adjustment have to be made before closing the accounts.

(a) Value of closing stock of raw materials Rs. 1,40,200.
(b) Depreciation on plant and machinery has to be written off at 7.5 % per annum
on patents at 15 % and on Premises at 5 % per annum.
(c) Provide for bad and doubtful debts at 5 per cent on Sundry Debtors.
(d) Carry forward Rs. 500 on account of rates and taxes.

17. The following is the Trial Balance of ABC Ltd., as at 31-3-2015. Prepare Profit and
Loss Statement and Balance Sheet in the form prescribed under the Companies Act.

Debit Credit
Authorized Capital
50,000 shares of Rs. 10 each 5,00,000
Subscribed Capital
10,000 shares of Rs. 10 each 1,00,000
Calls in Arrears 6,400
Land 10,000
 -13-

Buildings 25,000
Plant and machinery 15,000
Furniture and Fixtures 3,200
Carriage Inwards 2,300
Wages 21,400
Salaries 4,600
Bad Debts provision on 1-4-2014 1,400
Sales 80,000
Sales Return 1,700
Bank Charges 100
Coal, Gas and Water 700
Rates and Taxes 800
Purchases 50,000
Purchase Return 3,400
Bills Receivable 1,200
General Expenses 1,900
Sundry Debtors 42,800
Sundry Creditors 13,200
Stock on 1-4-2014 25,000
Fire Insurance 400
Cash at Bank 13,000
Cash in Hand 2,500
Share Premium 6,000
General Reserve 24,000
2,28,000 2,28,000

Charge depreciation on Buildings at the rate of 2.5 % , on plant and machinery at the
rate of 10 % and Furniture and Fixtures at 10 %. make a provision of 5 % on Sundry
Debtors for bad debts. Carry forward fire insurance Rs. 120. Provide for the following
outstanding liabilities : Wages Rs. 3,200 , Salaries Rs. 500 , Rent, Rates and Taxes
Rs. 200. The value of stock on 31-3-2015 was Rs. 30,000.

18. The Alpha manufacturing Co., Ltd., was registered with a nominal capital of Rs. 6,00,000
in equity shares of Rs. 10 each. The following is the list of balances extracted from its
books on 31-3-2015.
Rs.
Calls in Arrears 7,500
Premises 3,00,000
Pant and machinery 3,30,000
Interim Dividend paid 37,500
Stock on 1-4-2014 75,000
Fixtures 7,200
Sundry Debtors 87,000
Goodwill 25,000
 -14-

Cash in Hand 750

Cash at Bank 39,900
Purchase of raw material 1,85,000
Preliminary Expenses 5,000
Wages 84,865
General Expenses 16,835
Freight and Carriage 13,115
Salaries 14,500
Directors Fees 5,725
Bad Debts 2,110
Debenture Interest paid 9,000
Subscribed and fully called up capital 4,00,000
6 % Debentures 3,00,000
Profit and Loss Statement (credit balance) 14,500
Sundry Creditors 88,000
Sales 4,15,000
General Reserve 25,000
Provision for Doubtful Debts on 1-4-2014 3,500

Prepare Profit and Loss Statement and Balance Sheet in the proper form after making
the following adjustments. Depreciate plant and machinery by 10 %. Provide half years
debenture interest due. Maintain the provision for doubtful debts at 5 % on sundry
debtors. Stock on 31-3-2015 was Rs. 95,000.

19. Big & Co., Ltd., is a company with an Authorized Capital of Rs. 5,00,000 divided into
5,000 equity shares of Rs. 100 each. On 31-3-2015, 2,500 shares were fully called up.
The following are the balances extracted from the ledger of the Company as on 31-3-
2015.
Amount
Stock on 1-4-2014 50,000
Sales 4,25,000
Purchases 3,00,000
Wages (Productive) 70,000
Discount allowed 4,200
Interest received 3,150
Insurance upto 30-6-2015 6,720
Salaries 18,500
Rent 6,000
General Expenses 8,950
Profit and loss account 6,220
Printing and Stationary 2,400
Advertisement 3,800
Bonus 10,500
Debtors 38,700
 -15-

Creditors 35,200
Plant and machinery 80,500
Furniture 17,100
Cash at Bank 1,34,700
Reserve 25,000
Loan from managing director 15,700
Bad Debts 3,200
Calls in Arrears 5,000

You are required to prepare Profit and Loss Statement for the year ended 31-3-2015
and the Balance Sheet as on that date of the company. The following further information
is given :
1. Closing Stock Rs. 91,500.
2. Depreciation is to be charged on Plant and Furniture at 15 per cent and 10
per cent respectively.
3. Outstanding liabilities : Wages Rs. 5,200 ; Salary Rs. 1,200 and Rent
Rs. 600.
4. Dividend at the rate of 5 % on paid up capital is to be provided.

20. The Auto Parts manufacturing Co., Ltd., was registered with an authorized capital of Rs.
10,00,000 divided into shares of Rs. 10 each, 40,000 shares had been issued and fully
paid.

The following is the trial balance extracted on 31-3-2015.

Debit Credit
Stock on 1-4-2014 1,86,420
Returns 12,680 9,850
Sundry manufacturing expenses 24,150
18 % Bank loan (secured) 50,000
Office salaries and expenses 17,870
Directors Remuneration 26,250
Freehold Premises 1,64,210
Furniture 5,000
Trade Receivables and Payables 1,05,400 62,220
Cash at Bank 96,860
Profit and Loss Balance on 1-4-2014 38,640
Share Capital 4,00,000
Purchases and Sales 7,18,210 11,69,900
Manufacturing Wages 1,09,740
Interest on bank loan 4,500
Auditors fees 8,600
Preliminaries Expenses 6,000
Plant and machinery 1,28,400
Loose Tools 12,500
 -16-

Cash in Hand 19,530

Advance payment of tax 84,290
17,30,610 17,30,610

You are required to prepare Profit and Loss Statement for the year ended 31-3-2015
and Balance Sheet as at that date after taking into consideration the following
adjustments :

(i) On 31-3-2015, outstanding manufacturing wages and outstanding office salaries

stood at Rs. 1,890 and Rs. 1,200 respectively. On the same date stock was
valued at Rs. 1,24,840 and loose tools at Rs. 10,000.

(ii) Provide for Interest on bank loan for 6 months.

(iii) Depreciation on plant and machinery is to be provided @ 15 % while of office

furniture, it is to be @ 10 %.

(iv) Write off one-third of balance of preliminary expenses.

(v) Make a provision for income tax @ 50 %.

(vi) The directors declared dividend @ 15 % for the year ending 31-3-2015 after a

transfer of 5 % of net profits to general reserve.

(vii) Assume Corporate Dividend Tax : 15 % + 12 % Surcharge + 3 % Education

Cess.