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Page No 1.64:
Question 1:
What are the major heads in the Equity and Liabilities part of the Balance Sheet as per Schedule III?
Answer:
The major heads in the Equities and Liabilities part of the Balance sheet are:
i. Shareholder’s Funds,
ii. Share Application Money Pending Allotment,
iii. Non- Current Liabilities and
iv. Current Liabilities
Balance Sheet as at_______ |
||
Particulars |
Note No. |
Amount (Rs) |
I. 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 |
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|
b. Trade Payables |
|
|
c. Other Current Liabilities |
|
|
d. Short-term Provisions |
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|
Total |
|
|
Page No 1.64:
Question 2:
Under which major head will the following be shown:
(i) Share Capital; and (ii) Money Received Against Share Warrants?
Answer:
Items | Major Head |
Share Capital | Shareholder’s Funds |
Money received against share warrants | Shareholder’s Funds |
Page No 1.65:
Question 3:
List any five items that are shown under Reserves and Surplus.
Answer:
Items shown under Reserves and Surplus are:
i. Capital Reserve,
ii. Capital Redemption Reserve,
iii. Securities Premium Reserve,
iv. Debenture Redemption Reserve,
v. Revaluation Reserve etc.
Page No 1.65:
Question 4:
Under which sub-head will the following be classified or shown:
(i) Long-term Borrowings; (ii) Deferred Tax Liabilities (Net); and (iii) Long-term Provision?
Answer:
Items | Sub-head |
Long-term Borrowings | Non-Current Liabilities |
Deferred Tax Liabilities (Net) | Non-Current Liabilities |
Long-Term Provisions | Non-Current Liabilities |
Page No 1.65:
Question 5:
Name the itmes that are shown under Long-term Borrowings.
Answer:
Items shown under Long-term Borrowings are:
a. Debentures,
b. Bonds,
c. Terms Loans (both from Banks and from others),
d. Public Deposits,
e. Other Loans and Advances.
Page No 1.65:
Question 6:
A company has an opening credit balance in Surplus, i.e., Balance in Statement of Profit and Loss of â¹ 1,00,000. During the year, it earned a profit of â¹ 75,000. It decided to transfer â¹ 15,000 to Debentures Redemption Reserve (DRR) and also proposed to pay dividend of â¹ 25,000.
How will be the appropriations shown in the financial statements?
Answer:
Extract of Balance Sheet as at ….. |
||
Particulars |
Note No. |
Amount (Rs) |
I. Equity and Liabilities |
|
|
1. Shareholders’ Funds |
|
|
a. Share Capital |
|
|
b. Reserves and Surplus |
1 |
1,50,000 |
2. Share Application Money Pending Allotment |
|
|
3. Non-Current Liabilities |
|
|
4. Current Liabilities |
|
|
a. Short-term Provisions |
4 |
25,000 |
Total |
|
|
|
|
|
NOTES TO ACCOUNTS
Note No. |
Particulars |
Amount (Rs) |
||
1 |
Reserves and Surplus |
|
||
|
(a) Surplus, i.e. Balance in Statement of Profit and Loss |
1,00,000 |
|
|
|
Add: Profit for the year |
75,000 |
|
|
|
Less: Appropriations |
|
||
|
Transfer to Debenture Redemption Reserve |
(15,000) |
|
|
|
Proposed Dividend |
(25,000) |
1,35,000 |
|
|
(b) Debenture Redemption Reserve |
|
||
|
Transferred from Surplus i.e. Balance in Statement of Profit and Loss |
15,000 |
||
|
Total (a + b) [to be Shown in Balance Sheet against Reserves and |
1,50,000 |
||
4 |
Short-term Provisions |
|
||
|
Proposed Dividend |
25,000 |
Page No 1.65:
Question 7:
State giving reason whether Trade Receivables are classified as Current Assets or Non-current Assets in the Balance Sheet of a Company as per Schedule III of the Companies Act, 2013 in the following cases.
|
|
|
||
Case |
Operating Cycle Period (Months) |
Expected Realisation Period (Months) |
||
1 | 10 | 11 | ||
2 | 10 | 12 | ||
3 | 10 | 13 | ||
4 | 14 | 13 | ||
5 |
15 |
16 |
||
Answer:
Case |
As Current Assets or Non- Current Assets |
Reason |
1. |
Current Assets |
Expected receipt is more than operating cycle but receivable within 12 months. |
2. |
Current Assets |
Expected receipt is more than operating cycle but receivable within 12 months. |
3. |
Non- Current Assets |
Expected receipt is more than operating cycle and receivable after 12 months. |
4. |
Current Assets |
Expected receipt is less than operating cycle. |
5. |
Non- Current Assets |
Expected receipt is more than operating cycle and receivable after 12 months. |
Page No 1.65:
Question 8:
State giving reason whether Trade Payables are classified as Current Liabilities or Non-current Liabilities in the Calance Sheet of a Company as per Schedule III of the Companies Act, 2013 in the following cases:
|
|
|
||
Case |
Operating Cycle Period (Months) |
Expected Payment Period (Months |
||
1 |
10 |
11 |
||
2 |
10 |
12 |
||
3 | 10 | 13 | ||
4 | 14 | 13 | ||
5 |
15 |
16 |
||
Answer:
Case |
As Current Liabilities or Non- Current Liabilities |
Reason |
1. |
Current Liabilities |
Expected payment is more than operating cycle but payable within 12 months |
2. |
Current Liabilities |
Expected payment is more than operating cycle but payable within 12 months |
3. |
Non- Current Liabilities |
Expected payment is more than operating cycle and payable after 12 months |
4. |
Current Liabilities |
Expected payment is less than operating cycle |
5. |
Non- Current Liabilities |
Expected payment is more than operating cycle and payable after 12 months |
Page No 1.66:
Question 9:
Under which head and how are the following items shown in the Balance Sheet of a company under Schedule III:
(i) Calls-in-Arrears; (ii) Share Application Money Pending Allotment; (iii) Unpaid Dividend; and (iv) Dividend not paid on Cumulative Preference Shares?
Answer:
Items | Head | Disclosure |
Calls-in-Arrears | Shareholder’s Funds | It is shown as a deduction from Subscribed Capital shown as ‘Subscribed but not fully paid’ under Shareholder’s Funds |
Share Application Money Pending Allotment |
Share Application Money Pending Allotment |
It is shown as a separate line item |
Unpaid Dividend | Current Liabilities | It is shown as ‘Other Current Liability’ under Current Liabilities |
Dividend not paid on Cumulative Preference Shares |
Contingent Liabilities and Commitments |
It is shown as Contingent Liabilities and Commitments in Notes to Accounts |
Page No 1.66:
Question 10:
Under which main head and sub-head of Equity and Liabilities part of the Balance Sheet are the following items classified or shown:
(i) Bonds; | (ii) Debentures |
(iii) Public Deposits; | (iv) Capital Redemption Reserve; |
(v) Forfeited Shares Account: | (vi) Sundry Creditors; and |
(vii) Interest Accrued but Not Due on Debentures? |
Answer:
Items | Main head | Sub-head |
Bonds | Non-Current Liabilities | Long Term Borrowings |
Debentures | Non-Current Liabilities | Long Term Borrowings |
Deposits | Non-Current Liabilities | Long Term Borrowings |
Capital redemption Reserve | Shareholder’s Funds | Reserves and Surplus |
Share Forfeiture Account | Shareholder’s Funds | Subscribed Capital under Share Capital |
Sundry Creditors | Current Liabilities | Trade Payables |
Interest Accrued but not due on Debentures |
Current Liabilities | Other Current Liabilities |
Page No 1.66:
Question 11:
State any two items that are included in the following major heads under which liabilities of a company are shown: (i) Reserves and Surplus; (ii) Long-term Borrowings; (iii) Short-term Borrowings; (iv) Other Current Liabilities.
Answer:
Major head | Items |
Reserves and Surplus | Capital Reserve, Revaluation Reserve |
Long-term Borrowings | Debentures, Term Loans from Bank and Others |
Short-term Borrowings | Cash credit from bank, Loans repayable on demand |
Other Current Liabilities | Income received in advance, Unpaid Dividends |
Page No 1.66:
Question 12:
Classify the following items under major head and sub-head (if any) in the Balance Sheet of a company as per Schedule III of the Companies Act, 2013: (i) Capital Work-in-Progress: (ii) Provision for Warranties; (iii) Income received in Advance; and (iv) Capital Advances
Answer:
Item | Major Head | Sub-Head |
Capital Work-in-Progress | Non-Current Assets | Fixed Assets- Capital Work-in-Progress |
Provision for Warranties | Non-Current Liabilities | Long Term Provisions |
Income Received in Advance | Current Liabilities | Other Current Liabilities |
Capital Advances | Non-Current Assets | Long Term Loans & Advances |
Page No 1.66:
Question 13:
Under which major head and sub-head of the Assets part of the Balance Sheet will the following be shown:
(i) Intangible Assets; (ii) Intangible Assets under Development; (iii) Investments (more than 12 months); (iv) Deferred Tax Assets (Net); (v) Stores and Spares; and (vi) Loose Tools?
Answer:
Items | Main head | Sub-head |
Intangible Assets | Non-Current Assets | Fixed Assets |
Intangible Assets under development | Non-Current Assets | Fixed Assets |
Investments (more than 12 months) | Non-Current Assets | Non-Current Investments |
Deferred Tax Assets (Net) | Non-Current Assets | Deferred Tax Assets (Net) |
Stores and Spares | Current Assets | Inventories |
Loose Tools | Current Assets | Inventories |
Page No 1.67:
Question 14:
Under which heads the following items are classified or shown on the Assets part of the Balance Sheet of a copany: (i) Loose Tools; (ii) Bills Receivable; (iii) Sundry Debtors: and (iv) Advances Recoverable in Cash?
Answer:
Items | Main head | Sub-head |
Loose Tools | Current Assets | Inventories |
Bills Receivable | Current Assets | Trade Receivables |
Sundry Debtors | Current Assets | Trade Receivables |
Advance Recoverable in Cash | Current Assets | Short-term Loans and Advances |
Page No 1.67:
Question 15:
Under which heads the following items on the Assets part of the Balance Sheet of a company will be presented?
â
(i) Sundry Debtors; | (ii) Patents and Trademarks; | (iii) Shares in Quoted Companies: |
(iv) Advances recoverable in cash; | (v) Prepaid Insurance; and | (vi) Work-in-Progress (Machinery)? |
Answer:
Items | Main head | Sub-head |
Sundry Debtors | Current Assets | Trade Receivables |
Patents and Trade Marks | Non-Current Assets | Fixed Assets (Intangible Assets) |
Shares in Quoted Companies | Non-Current Assets | Non-Current Investments |
Advance Recoverable in Cash | Current Assets | Short-term Loans and Advances |
Prepaid Insurance | Current Assets | Other Current Assets |
Work-in-Progress (Machinery) | Non-Current Assets | Fixed Assets (Capital Work-in-progress) |
Page No 1.67:
Question 16:
Under which of the major heads will the following items be shown while preparing Balance Sheet of a company, as per Schedule III of the Companies Act, 2013:
(i) Unamortised Loss on Issue of Debentures (To be written off after 12 months from the date of Balance Sheet); | ||
(ii) 10% Debentures; | (iii) Stock-in-Trade; | (iv) Cash at Bank; |
(v) Bills Receivable; | (vi) Goodwill; | (vii) Loose Tools; |
(viii) Truck; | (ix) Provision for Tax; and | (x) Sundry Creditors? |
Answer:
ITEMS | HEAD | SUB-HEAD |
Unamortised Loss on Issue of Debentures (To be written off after 12 months from date of Balance sheet) |
Non-Current Assets | Other Non-Current Assets |
10% Debentures | Non Current Liabilities | Long-term Borrowings |
Stock-in-Trade | Current Assets | Inventories |
Cash at Bank | Current Assets | Cash and Cash equivalents |
Bills Receivable | Current Assets | Trade Receivables |
Goodwill | Non-Current Assets | Fixed Assets (Intangible Assets) |
Loose Tools | Current Assets | Inventories |
Truck | Non-Current Assets | Fixed Assets (Tangible Assets) |
Provision for Tax | Current Liabilities | Short term Provisions |
Sundry Creditors | Current Liabilities | Trade Payables |
Page No 1.67:
Question 17:
Under which heads will the following items be shown in the Balance Sheet of a Company
(i) Bank Balance; | (ii) Investments (Long-term); | (iii) Outstanding Salary; |
(iv) Authorised Capital; | (v) Bills Payable; | |
(vi) Unclaimed Dividents; | (vii) Shares Option Outstanding Account; | |
(viii) General Reserve; and | (ix) Subsidy Reserve? |
Answer:
S. No. |
Items |
Main Head |
Sub-Head |
1 |
Bank Balance |
Current Assets |
Cash and Cash Equivalents |
2 |
Investments (Long-term) |
Non-Current Assets |
Non-Current Investments |
3 |
Outstanding Salary |
Current Liabilities |
Other Current Liabilities |
4 |
Authorised Capital |
Shareholder's Fund |
Share Capital |
5 |
Bills Payable |
Current Liabilities |
Trade Payables |
6 |
Unclaimed Dividends |
Current Liabilities |
Other Current Liabilities |
7 |
Share Option Outstanding Account |
Shareholders’ Funds |
Reserves and Surplus |
8 |
General Reserve |
Shareholders’ Funds |
Reserves and Surplus |
9 |
Subsidy Reserve |
Shareholders’ Funds |
Reserves and Surplus |
Page No 1.67:
Question 18:
Under which heads the following items are shown in the Balance Sheet of a company:
(i) Calls-in-Arrears; | (ii) Commission Received in Advance; |
(iii) Debentures; | (iv) Stores and Spare Parts; |
(v) Land and Building; | (vi) Forfeited Shares Account? |
Answer:
S. No. |
Items |
Main Head |
Sub-Head |
1 |
Calls-in-Arrears |
Shareholder's Funds |
Share Capital (i.e. as a deduction from subscribed share capital) |
2 |
Commission Received in Advance |
Current Liabilities |
Other Current Liabilities |
3 |
Debentures |
Non-Current Liabilities |
Long-term Borrowings |
4 |
Stores and Spare Parts |
Current Assets |
Inventories |
5 |
Land and Building |
Non-Current Assets |
Fixed Assets (Tangible Assets) |
6 |
Forfeited Shares Account |
Shareholder's Funds |
Share Capital (i.e. as an addition to subscribed share capital) |
|
Page No 1.68:
Question 19:
Under which heads the following are shown in a company's Balance Sheet:
(i) Public Deposits; | (ii) Office Furniture; |
(iii) Prepaid Rent; | (iv) Outstanding Salaries; |
(v) Computer Software; | (vi) Interest Accrued on Investment? |
Answer:
S. No. |
Items |
Main Head |
Sub-Head |
1 |
Public Deposits |
Non-Current Liabilities |
Long-term Borrowings |
2 |
Office Furniture |
Non-Current Assets |
Fixed Assets (Tangible Assets) |
3 |
Prepaid Rent |
Current Assets |
Other Current Assets |
4 |
Outstanding Salaries |
Current Liabilities |
Other Current Liabilities |
5 |
Computer Software |
Non-Current Assets |
Fixed Assets (Intangible Assets) |
6 |
Interest Accrued on Investment |
Current Assets |
Other Current Assets |
Page No 1.68:
Question 20:
Name the major heads under which the following items will be presented in the Balance Sheet of a company as per Schedule III of the Companies Act, 2013:
(i) Loose Tool. | (ii) Unpaid Dividend. |
(iii) Copyrights and Patents. | (iv) Land and Building. |
Answer:
Items |
Main Head |
Loose Tools |
Current Assets |
Unpaid Dividend |
Current Liabilities |
Copyrights & Patents |
Non- Current Assets |
Land & Building |
Non- Current Assets |
Page No 1.68:
Question 21:
Identify the major heads under which the following items will be shown in the Balance Sheet of a company as per Schedule III of Companies Act, 2013:
(i) Provision for Tax. | (ii) Loan payable on demand. |
(iii) Computer and related equipment. | (iv) Goods acquired for trading |
Answer:
Items |
Main Head |
Provision for Tax |
Current Liabilities |
Loan payable on demand |
Current Liabilities |
Computer & related equipment |
Non- Current Assets |
Goods acquired for trading |
Current Assets |
Page No 1.68:
Question 22:
Under which major headings and sub-headings the following items will be shown in the Balance Sheet of a company as per schedule III of Companies Act, 2013?
(i) Provision for Employee Benefits.
(ii) Calls-in-Advance.
Answer:
S.No. |
Item |
Major Head |
Sub-head |
i) |
Provision for Employee Benefit |
Non-current Liabilities |
Long term Provisions |
ii) |
Calls-in-Advance |
Current Liabilities |
Other Current Liabilities |
Page No 1.68:
Question 23:
How are the following items shown while preparing Balance Sheet of a company:
(i) Surplus, i.e., Balance in Statement of Profit and Loss (Dr.);
(ii) Interest accrued and due on Debentures;
(iii) Computer Software under development;
(iv) Interest accrued on Investment?
Answer:
ITEMS | MAJOR HEAD | SUB-HEAD |
Surplus, i.e. Balance in Statement of Profit and Loss (Dr.) |
Shareholder’s Funds | Reserves and Surplus (as negative figure) |
Interest accrued and due on debentures |
Current Liabilities | Other Current Liabilities |
Computer Software under development |
Non-current Assets | Fixed Assets (Intangible Assets under development) |
Interest accrued on Investments | Current Assets | Other Current Assets |
Page No 1.68:
Question 24:
Hero Ltd. has raised following long-term loans on 1st April, 2018:
10,000; 10% Debentures of â¹ 100 each redeemable in four equal yearly | â¹ |
installments beginning 1st July, 2019 | 10,00,000 |
11% Bank Loan from SBI repayable after 5 years | 20,00,000 |
Interest on Debentures and Bank Loan has not yet been paid. |
How will be the above items shown in the Balance Sheet of the company as at 31st March, 2019?
Answer:
Extract of Balance Sheet as at March 31, 2019 |
||||
Particulars |
Note No. |
Amount (â¹) |
||
2. Non-Current Liabilities |
|
|
||
Long-term Borrowings |
|
|
||
11% Loan from SBI |
20,00,000 |
|
|
|
7,500, 10% Debentures of Rs 100 each |
7,50,000 |
|
27,50,000 |
|
3. Current Liabilities |
|
|
||
Other Current Liabilities |
|
|
||
Current Maturity of Long-term Debts (2,500 |
2,50,000 |
|
|
|
Interest accrued and Due on Debentures |
1,00,000 |
|
|
|
Interest accrued and Due on Loan |
2,20,000 |
|
5,70,000 |
|
|
|
|
|
|
Total |
|
33,20,000 |
||
|
|
|
â¹ |
Page No 1.69:
Question 25:
Prepare Balance Sheet of the Company as per Schedule III of the Companies Act, 2013: | â¹ |
10% Debentures of â¹ 100 each | 1,90,000 |
Stock-in-Trade (inventories) | 40,000 |
Goodwill | 20,000 |
Provision for Tax | 60,000 |
Totalling of Balance Sheet is not required |
Answer:
Balance Sheet as at … |
||
Particulars |
Note No. |
Amount (Rs) |
I. Equity and Liabilities |
|
|
1. Shareholders’ Funds |
|
– |
2. Non-Current Liabilities |
|
|
Long-term Borrowings |
1 |
1,90,000 |
3. Current Liabilities |
|
|
Short-term Provisions |
2 |
6,000 |
Total |
|
|
|
|
|
II Assets |
|
|
1. Non-Current Assets |
|
|
Intangible (Fixed Assets) |
3 |
20,000 |
2. Current Assets |
|
|
a. Inventories |
4 |
40,000 |
Total |
|
|
|
|
|
NOTES TO ACCOUNTS |
||
Note No. |
Particulars |
Amount (Rs) |
1 |
Long-term Borrowings |
|
|
10% Debentures |
1,90,000 |
|
|
|
2 |
Short-term Provisions |
|
|
Provision for Tax |
6,000 |
|
|
|
3 |
Intangible (Fixed Assets) |
|
|
Goodwill |
20,000 |
|
|
|
4 |
Inventories |
|
|
Stock-in-Trade |
40,000 |
|
|
|
Page No 1.69:
Question 26:
Prepare Balance Sheet of VT Ltd. as at 31st March 2019, from the following information as per Schedule III, Part I of the Companies Act, 2013:
â¹ | â¹ | |||
General Reserve | 3,000 | Fixed Assets: Tangible Assets (Cost) | 9,000 | |
8% Debentures | 3,000 | Other Current Liabilities | 2,500 | |
Surplus, i.e., Balance in Statement of Profit and Loss (Credit) | 1,200 | Share Capital | 5,000 | |
Depreciation of Fixed Assets | 700 | Other Current Assets | 6,400 |
Answer:
Balance Sheet as at March 31, 2019 |
||
Particulars |
Note No. |
Amount (â¹) |
I Equity and Liabilities |
|
|
1. Shareholders’ Funds |
|
|
a. Share Capital |
1 |
5,000 |
b. Reserves and Surplus |
2 |
4,200 |
2. Non-Current Liabilities |
|
|
Long-term Borrowings |
3 |
3,000 |
3. Current Liabilities |
|
|
Other Current Liabilities |
|
2,500 |
Total |
|
14,700 |
|
|
|
II Assets |
|
|
1. Non-Current Assets |
|
|
Fixed Assets (Tangible Assets) |
4 |
8,300 |
2. Current Assets |
|
|
Other Current Assets |
|
6,400 |
Total |
|
14,700 |
|
|
|
NOTES TO ACCOUNTS |
|||
Note No. |
Particulars |
Amount (â¹) |
|
1 |
Share Capital |
|
|
|
Share Capital |
5,000 |
|
|
|
|
|
2 |
Reserves and Surplus |
|
|
|
General Reserve |
3,000 |
|
|
Balance in Statement of Profit and Loss (Credit) |
1,200 |
|
|
|
4,200 |
|
|
|
|
|
3 |
Long-term Borrowings |
|
|
|
8% Debentures |
3,000 |
|
|
|
|
|
4 |
Fixed Assets |
|
|
|
Tangible Assets (Cost) |
9,000 |
|
|
Depreciation |
(700) |
8,300 |
|
|
|
Page No 1.69:
Question 27:
From the following information extracted from the books of Howrach Ltd., prepare Balance Sheet of the company as at 31st March, 2019 as per Schedule III of the Companies Act, 2013:
(â¹ in '000) | (â¹ in '000) | ||
Long-term Borrowings | 1,000 | Fixed Assets (Tangible) | 1,600 |
Trade Payable | 60 | Inventories | 40 |
Share Capital | 800 | Trade Receivables | 160 |
Reserves and Surplus | 180 | Cash and Cash Equivalents | 240 |
Answer:
Balance Sheet of Howrach Ltd. as at March 31, 2019 |
||
Particulars |
Note No. |
Amount (â¹ in ‘000) |
I. Equity and Liabilities |
|
|
1. Shareholders’ Funds |
|
|
a. Share Capital |
|
800 |
b. Reserves and Surplus |
|
180 |
2. Non-Current Liabilities |
|
|
Long-term Borrowings |
|
1,000 |
3. Current Liabilities |
|
|
Trade Payables |
|
60 |
Total |
|
2,040 |
II. Assets |
|
|
1. Non-Current Assets |
|
|
Fixed Assets (Tangible Assets) |
|
1,600 |
2. Current Assets |
|
|
Inventories |
|
40 |
Trade Receivables |
|
160 |
Cash and Cash Equivalents |
|
240 |
Total |
|
2,040 |
|
|
|
Page No 1.69:
Question 28:
Prepare Balance Sheet of HP Ltd. as at 31st March, 2019 from the following information:
â¹ | â¹ | |||
Equity Share Capital | 20,00,000 | Surplus, i.e., Balance in Statement of Profit and Loss (Cr.) | 3,00,000 | |
12% Preference Share Capital | 10,00,000 | Stock | 6,00,000 | |
Fixed Assets (At cost) | 46,60,000 | Sundry Debtors | 8,00,000 | |
Accumulated Depreciation | 16,60,000 | Cash | 1,50,000 | |
Investments | 4,00,000 | Loans and Advances | 50,000 | |
Current Liabilities | 8,00,000 | Provision for Taxation | 2,00,000 | |
12% Debentures | 6,00,000 | Workmen Compensation Reserve | 1,00,000 |
Answer:
Balance Sheet of HP Ltd. as at March 31, 2019 |
||
Particulars |
Note No. |
Amount (â¹) |
I. Equity and Liabilities |
|
|
1. Shareholders’ Funds |
|
|
a. Share Capital |
1 |
30,00,000 |
b. Reserves and Surplus |
2 |
4,00,000 |
2. Non-Current Liabilities |
|
|
a. Long-term Borrowings |
3 |
6,00,000 |
3. Current Liabilities |
|
|
a. Other Current Liabilities |
4 |
8,00,000 |
b. Short-term Provisions |
5 |
2,00,000 |
Total |
|
50,00,000 |
|
|
|
II Assets |
|
|
1. Non-Current Assets |
|
|
a. Fixed Assets |
|
|
i) Tangible Assets |
6 |
30,00,000 |
b. Non-Current Investments |
7 |
4,00,000 |
2. Current Assets |
|
|
a. Inventories |
8 |
6,00,000 |
b. Trade Receivables |
9 |
8,00,000 |
c. Cash and Cash Equivalents |
10 |
1,50,000 |
d. Short-term Loans and Advances |
11 |
50,000 |
Total |
|
50,00,000 |
|
|
|
NOTES TO ACCOUNTS |
|||
Note No. |
Particulars |
Amount (â¹) |
|
1 |
Share Capital |
|
|
|
Equity Share Capital |
20,00,000 |
|
|
12% Preference Share Capital |
10,00,000 |
|
|
|
30,00,000 |
|
2 |
Reserves and Surplus |
|
|
|
Workmen Compensation Reserve |
1,00,000 |
|
|
Balance in Statement of Profit and Loss (Credit) |
3,00,000 |
|
|
|
4,00,000 |
|
|
|
|
|
3 |
Long-term Borrowings |
|
|
|
12% Debentures |
6,00,000 |
|
|
|
|
|
4 |
Other Current Liabilities |
|
|
|
Current Liabilities |
8,00,000 |
|
|
|
|
|
5 |
Short-term Provisions |
|
|
|
Provision for Taxation |
2,00,000 |
|
|
|
|
|
6 |
Tangible Assets |
|
|
|
Fixed Assets (Cost) |
46,60,000 |
|
|
Depreciation |
(16,60,000) |
30,00,000 |
|
|
|
|
7 |
Non-Current Investments |
|
|
|
Investments |
4,00,000 |
|
|
|
|
|
8 |
Inventories |
|
|
|
Stock |
6,00,000 |
|
|
|
|
|
9 |
Trade Receivables |
|
|
|
Sundry Debtors |
8,00,000 |
|
|
|
|
|
10 |
Cash and Cash Equivalents |
|
|
|
Cash |
1,50,000 |
|
|
|
|
|
11 |
Short-term Loans and Advances |
|
|
|
Loans and Advances |
50,000 |
|
|
|
|
Page No 1.69:
Question 29:
Under which head following revenue items of a non-financial company will be classified or shown:
(i) Sales; (ii) Revenue from Services Rendered; (iii) Sale of Scrap; (iv) Interest Earned on Loans; and (v) Gain (profit) on Sale of Investments?
Answer:
ITEMS | HEAD |
Sales | Revenue from Operations |
Revenue from services rendered | Revenue from Operations |
Sale of scrap | Revenue from Operations |
Interest earned or Loans | Other Income |
Profit on Sale of Investment | Other Income |
Page No 1.70:
Question 30:
Under which head following revenue items of a financial company will be classified or shown:
(i) Gain (Profit) on Sale of Building; (ii) Revenue from Project Consultancy Rendered; (iii) Sale of Scrap; (iv) Interest earned on Loans; and (v) Gain (Profit) on sale of Investments?
Answer:
ITEMS | HEAD |
Profit on Sale of Building | Other Income |
Revenue from Project Consultancy Rendered | Other Income |
Sale of scrap | Other Income |
Interest earned or Loans | Revenue from Operations |
Profit on Sale of Investment | Revenue from Operations |
Page No 1.70:
Question 31:
Under which head following revenue items of non-financial company will be classified or shown:
(i) Gain (Profit) on Sale of Fixed Asset; (ii) Fee Received for Arranging Loans; (iii) Interest on Loans Given; (iv) Gain (Profit) on Sale of Investments and (v) Sale of Miscellaneous Items?
Answer:
ITEMS | HEAD |
Profit on Sale of Fixed Assets | Other Income |
Fee Received for Arranging Loans | Other Income |
Interest on Loans Given | Other Income |
Profit on Sale of Investments | Other Income |
Sale of a Miscellaneous item | Other Income |
Page No 1.70:
Question 32:
Calculate Cost of Materials Consumed from the following:
Opening Inventory of Materials â¹5,00,000; Purchase of Materials â¹25,00,000; and Closing Inventory of Materials ââ¹4,00,000.
Answer:
Page No 1.70:
Question 33:
Calculate Cost of Materials Consumed from the following:
Opening Inventory of Materials â¹2,50,000; Finished Goods â¹1,00,000; Closing Inventory of Materials â¹2,25,000; Finished Goods â¹75,000; Raw Material purchased during the year â¹15,00,000.
Answer:
Note: Opening Inventory of Finished Goods and Closing Inventory of Finished Goods will not be considered as these are shown under Change in Inventory of Finished Goods.
Page No 1.70:
Question 34:
Calculate Cost of Materials Consumed from the following:
Opening Inventory of Materials â¹3,50,000; Finished Goods â¹75,000; Stock-in-Trade â¹2,00,000; Closing Inventory of: Materials â¹3,25,000; Finished Goods â¹85,000; Stock-in-Trade â¹1,50,000; Purchases during the year: Raw Material â¹17,50,000; Stock-in-Trade â¹9,00,000.
Answer:
Note: Opening Inventory of Finished Goods and Closing Inventory of Finished Goods will not be considered as these are shown under Change in Inventory of Finished Goods. Also, Opening, Closing and Purchases of Stock-in-Trade are not considered as they are not part of cost of materials consumed.
Page No 1.70:
Question 35:
From the following information, calculate Change in Inventory of Finished Goods: Opening Inventory and Closing Inventory of Finished Goods â¹2,00,000 and â¹1,75,000 respectively.
Answer:
NOTES TO ACCOUNTS
Note No. |
Particulars |
Amount (Rs) |
|
(a) |
Finished Goods |
|
|
|
Opening Inventory |
2,00,000 |
|
|
Less: Closing Inventory |
1,75,000 |
25,000 |
|
|
25,000 |
|
|
|
|
Rs 25,000 will be shown in the Statement of Profit and Loss against Change in Inventories of Finished Goods.
Page No 1.70:
Question 36:
From the following information, calculate Change in Inventory of Finished Goods: Opening Inventory and Closing Inventory of Finished Goods â¹2,50,000 and â¹2,00,000 respectively.
Answer:
NOTES TO ACCOUNTS
Note No. |
Particulars |
Amount (Rs) |
|
(a) |
Finished Goods |
|
|
|
Opening Inventory |
2,50,000 |
|
|
Less: Closing Inventory |
2,00,000 |
50,000 |
|
|
50,000 |
|
|
|
|
Rs 50,000 will be shown in the Statement of Profit and Loss against Change in Inventories of Finished Goods.
Page No 1.70:
Question 37:
From the following information, calculate Change in Inventory of Work-in-Progress: Opening and Closing Work-in-Progress â¹1,00,000 and â¹1,15,000 respectively.
Answer:
NOTES TO ACCOUNTS
Note No. |
Particulars |
Amount (Rs) |
|
(a) |
Work-in-Progress |
|
|
|
Opening Inventory |
1,00,000 |
|
|
Less: Closing Inventory |
1,15,000 |
(15,000) |
|
|
(15,000) |
|
|
|
|
(Rs 15,000) will be shown in the Statement of Profit and Loss against Change in Inventories of Work-in-Progress.
Page No 1.70:
Question 38:
From the following information, calculate Change in Inventory of Work-in-Progress: Opening and Closing Work-in-Progress â¹1,50,000 and â¹1,45,000 respectively.
Answer:
NOTES TO ACCOUNTS
Note No. |
Particulars |
Amount (Rs) |
|
(a) |
Work-in-Progress |
|
|
|
Opening Inventory |
1,50,000 |
|
|
Less: Closing Inventory |
1,45,000 |
5,000 |
|
|
5,000 |
|
|
|
|
Rs 5,000 will be shown in the Statement of Profit and Loss against Change in Inventories of Work-in-Progress.
Page No 1.70:
Question 39:
From the following information, calculate Change in Inventory of Stock-in-Trade: Opening and Closing Stock-in-Trade â¹5,00,000 and â¹4,50,000 respectively.
Answer:
NOTES TO ACCOUNTS
Note No. |
Particulars |
Amount (Rs) |
|
(a) |
Stock-in-Trade |
|
|
|
Opening Inventory |
5,00,000 |
|
|
Less: Closing Inventory |
4,50,000 |
50,000 |
|
|
50,000 |
|
|
|
|
Rs 50,000 will be shown in the Statement of Profit and Loss against Change in Inventories of Stock-in-Trade.
Page No 1.70:
Question 40:
From the following information, calculate Change in Inventory of Stock-in-Trade: Opening and Closing Stock-in-Trade â¹5,00,000 and â¹4,00,000 respectively.
Answer:
NOTES TO ACCOUNTS
Note No. |
Particulars |
Amount (Rs) |
|
(a) |
Stock-in-Trade |
|
|
|
Opening Inventory |
5,00,000 |
|
|
Less: Closing Inventory |
4,00,000 |
1,00,000 |
|
|
1,00,000 |
|
|
|
|
Rs 1,00,000 will be shown in the Statement of Profit and Loss against Change in Inventories of Stock-in-Trade.
Page No 1.71:
Question 41:
From the following information of Hospitality Ltd. for the year ended 31st March, 2018, calculate amount that will be shown in the Note to Accounts on Changes in inventiories of Finished Goods, WIP and stock-in-Trade:
|
|
|
||
Particluars |
Opening Inventory (â¹) |
Closing inventory(â¹) |
||
Finished Goods |
5,00,000 |
5,50,000 |
||
Work-in-Progress |
4,50,000 |
4,25,000 |
||
Stock-in-Trade | 6,50,000 | 6,00,000 | ||
|
|
|
||
Answer:
NOTES TO ACCOUNTS
Note No. |
Particulars |
Amount (Rs) |
|
Change in Inventories of Finished Goods, WIP and Stock-in-Trade | |||
(a) |
Finished Goods |
||
Opening Inventory |
5,00,000 |
||
Less: Closing Inventory |
5,50,000 |
(50,000) |
|
(50,000) |
|||
(b) |
Work-in-Progress |
||
Opening Inventory |
4,50,000 |
||
Less: Closing Inventory |
4,25,000 |
25,000 |
|
25,000 |
|||
(c) |
Stock-in-Trade |
||
Opening Inventory |
6,50,000 |
||
Less: Closing Inventory |
6,00,000 |
50,000 |
|
50,000 |
|||
Net Change (a+b+c) | 25,000 |
Rs 25,000 will be shown in the Statement of Profit and Loss against the Change in Inventories of Finished Goods, Work-in-Progress and Stock-in-Trade.
Page No 1.71:
Question 42:
From the following information compute the amount to be shown in Note to Accounts on Employees Benefit Expenses: Wages â¹ 5,40,000; Salaries â¹ 7,20,000; bonus â¹ 1,05,000; Staff Welfare Expenses â¹ 60,000 and Business Promotion Expenses â¹ 50,000.
Answer:
NOTES TO ACCOUNTS
Note No. |
Particulars |
Amount (â¹) |
|
Employees Benefit Expenses | |||
|
|||
Wages |
5,40,000 |
||
Salaries | 7,20,000 | ||
Bonus | 1,05,000 | ||
Staff Welfare Expenses |
60,000 |
14,25,000 | |
Amount to be shown in the Statement of Profit and Loss | 14,25,000 | ||
*Amount spent on promotion of business is not included in Employees Benefit Expenses.
Page No 1.71:
Question 43:
From the following information, prepare Note to Accounts on Employees Benefit Expenses:
Wages â¹ 2,70,000; Salaries â¹ 3,60,000; Staff Welfare Expenses 60,000; Printing and Stationery Expenses â¹ 20,000 and Business Promotion Expenses â¹ 50,000.
Answer:
NOTES TO ACCOUNTS
Note No. |
Particulars |
Amount (Rs) |
|
Employees Benefit Expenses | |||
|
|||
Wages |
2,70,000 |
||
Salaries | 3,60,000 | ||
Staff Welfare Expenses |
60,000 |
6,90,000 | |
Amount to be shown in the Statement of Profit and Loss | 6,90,000 | ||
*Amount spent on promotion of business and printing & Stationary expenses are not included in Employees Benefit Expenses.
Page No 1.71:
Question 44:
Out of the Following, identify the items that are shown in the Note to Accounts on Finance Costs:
(i) Interest paid on Borrowing from prince Finance Ltd.;
(ii) Interest paid on Term Loan to Bank;
(iii) Interest paid on Public Deposits;
(iv) Loss on Issue of Debentures Written off; and
(v) Bank Charges.
Answer:
Items that will be shown in the Notes to Accounts on Finance Costs are:
i. Interest paid on Borrowings from Prince Finance Ltd.;
ii. Interest paid on Term Loan to Bank;
iii. Interest paid on Public Deposits;
iv. Loss on Issue of Debentures written off.
The Bank charges are not shown under Finance Costs but under ‘Other Expenses’, as they are expenses for the services availed from the bank.
Page No 1.71:
Question 45:
From the following information, prepare Note to Accounts on Finance Costs: Interest paid to Bank â¹ 75,000; Interest on Debentures â¹ 58,000; Loss on issue of Debentures written off â¹ 27,500; and Commitment Charges â¹ 15,000.
Answer:
NOTES TO ACCOUNTS
Note No. |
Particulars |
Amount (Rs) |
|
Finance Costs | |||
Interest paid to bank |
75,000 |
||
Interest on Debentures | 58,000 | ||
Loss on Issue of Debentures written off | 27,500 | ||
Commitment charges |
15,000 |
1,75,500 | |
1,75,500 | |||
Page No 1.71:
Question 46:
From the following information of Best Marketing Ltd. for the year ended 31st March, 2019 prepare Note to Accounts on Depreciation and Amortisation Expenses:
Depreciation on: Building â¹ 15,500; Plant and Machinery â¹ 25,000; Computers â¹ 60,000; Goodwill written off â¹ 7,500; Patents written off â¹ 12,500.
Answer:
NOTES TO ACCOUNTS
Note No. |
Particulars |
Amount (â¹) |
|
Depreciation and Amortisation Expenses | |||
|
Depreciation |
||
Building |
15,500 |
||
Plant and Machinery | 25,000 | ||
Computers |
60,000 |
1,00,500 |
|
|
Amortisation |
||
Goodwill written off |
7,500 |
||
Patents written off |
12,500 |
20,000 |
|
1,20,500 |
|||
Amount to be shown in the Statement of Profit and Loss | 1,20,500 |
Page No 1.72:
Question 47:
Identify which of the following items will be shown in the Note to Accounts on Other Expenses? (i) Salaries; (ii) Postage Expenses; (iii) Telephone and Internet Expenses; (iv) Rent for warehouse; (v) Carriage Inwards; (vi) Depreciation on computers; (vii) Computer Software amortised; (viii) Computer Hiring Charges; (ix) Audit fee; (x) Bonus.
Answer:
Items that will be shown in the Notes to Accounts on ‘other expenses’ are
(ii) Postage Expenses;
(iii)Telephone and Internet Expenses;
(iv) Rent for warehouse;
(v) Carriage Inwards;
(viii) Computer Hiring charges;
(ix) Audit fee
Page No 1.72:
Question 48:
Under which line item (major head) of the Statement of Profit and Loss of non-financial company will the following be shown:
(i) Sale of Goods; (ii) Revenue from Services Rendered; (iii) Interest Earned; (iv) Gain (Profit) on Sale of Assets; (v) Purchases of Stock-in-Trade; (vi) Salaries and Wages; (vii) Interest paid to Bank; (viii) Carriage Outward?
Answer:
ITEMS | MAJOR HEAD |
Sale of Goods | Revenue from Operations |
Revenue from Services rendered | Revenue from Operations |
Interest earned | Other Income |
Profit on Sale of Assets | Other Income |
Purchase of Stock-in-Trade | Purchase of Stock-in-Trade |
Salaries and Wages | Employees Benefit Expenses |
Interest paid to Bank | Finance Costs |
Carriage Outward | Other Expenses |
Page No 1.72:
Question 49:
Under which line item (major head) of the Statement of Profit and Loss of a financial company will the following be shown:
(i) Interest on Loans Given: (ii) Gain (Profit) on Sale of Securities; (iii) Loss on Sale of Fixed Assets; (iv) Interest paid on Deposits; (v) Depreciation on Computers; (vi) Goodwill Written off; (vii) Commission paid for Deposit Mobilisation; and (viii) Repairs Expenses?
Answer:
ITEMS | MAJOR HEAD |
Interest on Loans Given | Revenue from Operations |
Profit on Sale of Securities | Revenue from Operations |
Loss on Sale of Fixed Assets | Other Expenses |
Interest paid on Deposits | Finance Costs |
Depreciation on Computers | Depreciation and Amortisation Expenses |
Goodwill Written off | Depreciation and Amortisation Expenses |
Commission paid for Deposit Mobilisation | Finance Costs |
Repairs Expenses | Other Expenses |
Page No 1.72:
Question 50:
Under which line item of the financial statements following items will be shown:
(i) Sales; (ii) Loss on Sale of Vehicle; (iii) Debentures; (iv) Unamortised Loss on Issue of Debentures (to be written off within 12 months of the date of Balance Sheet); (v) Encashable Leave Payable at the Time of Retirement; (vi) Tax Reserve; (vii) Carriage on Purchases of Stock-in-Trade; and (viii) Telephone and Internet Expenses?
Answer:
Items | Line Items of Financial Statements |
Sales | Revenue from Operations |
Loss on Sale of Vehicle | Other Expenses |
Debentures | Long Term Borrowings |
Unamortised Loss on Issue of Debentures (to be written off within 12 months of the date of Balance Sheet) |
Other Non-Current Assets |
Encashable Leave Payable at the time of Retirement |
Long Term Provisions |
Tax Reserve | Reserves and Surplus |
Carriage on Purchase of Stock-in Trade | Other Expenses |
Telephone and Internet expenses | Other Expenses |
Page No 1.72:
Question 51:
State under which major headings and sub-headings the following items will be presented in the Balance Sheet of a company as per Schedule III of the Companies Act, 2013:
(i) Capital Reserve;
(ii) Calls-in-Advance;
(iii) Loose Tools; and
(iv) Bank overdraft.
Answer:
S.No. |
Item |
Major Head |
Sub-head |
i) |
Capital Reserve |
Shareholders’ Funds |
Reserves and Surplus |
ii) |
Calls-in-Advance |
Current Liabilities |
Other Current Liabilities |
iii) |
Loose Tools |
Current Assets |
Inventories |
iv) |
Bank Overdraft |
Current Liabilities |
Short-term Borrowings |
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