Req.

1
Financial statements

SANJAY INDUSTRIES LTD.

BALANCE SHEET AS AT 31ST MARCH 2006.
Amount
(Rs.)

Liabilities
Share Capital

Fixed Assets

Patents & trademark

Less: Amortised@
20,00,000 5%

Authorised
2,00,000 shares of Rs. 10
each.
Issued, Subscribed and
Paid-Up:
90,000 shares of Rs. 10
each.

Creditors
Bills payable
Outstanding Expenses:
Rent
Salaries
Managerial
remuneration
B. Provisions:
Income Tax
Proposed Dividend
Total

43,200
2,160

41,040

Plant & Machinery

Less: Dep.@ 14%

2,61,000
36,540

2,24,460

Furniture & fittings

Less: Dep. @ 18%
Current Assets,
Loans & Advances

1,53,000
27,540

1,25,460

9,00,000

Reserves And Surplus

General Reserve
Add: created during the
year
Balance in P&L A/C
Current Liabilities and
Provisions
A. Current Liabilities:

Amount
(Rs.)

Assets

1,39,500
16,303

1,55,803
2,73,758 A. Current Assets:
Inventory
Debtors
Less: Provision for
Doubtful Debts
1,57,500 Bills receivable
63,000 Cash-at-bank

7,92,000
2,47,500
4,590

2,42,910
45,000
4,15,800

7,200
8,100
55,737

71,037
1,75,572
90,000
18,86,670

Total

18,86,670

SANJAY INDUSTRIES LTD.

PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED 31ST MARCH 2006.
Expenses

Amount
(Rs.)

Opening Inventory
Purchases
Less: Purchase Return
Carriage Inwards

6,75,000 Sales
22,05,000
90,000

Wages
Gross Profit c/d
Total
Salaries
Add: outstanding
Depreciation:
Plant and machinery
Furniture & fittings
Amortisation of patents &
trademark
Rent
Add: outstanding
Sundry Expenses
Provision for Doubtful
Debts
Provision for managerial
remuneration
Provision for Income Tax
Net Profit c/d
Total
Transfer to General
Reserve
Proposed Dividend
Balance Carried to
Balance Sheet
Total

Income

67,500
8,100
36,540
27,540

Amount
(Rs.)
30,60,000

Closing Inventory
21,15,000
8,550
2,70,000
7,83,450
38,52,000 Total
Gross Profit b/d
75,600
Discount

7,92,000

38,52,000
7,83,450
27,000

64,080
2,160

36,000
7,200

43,200
63,450
4,590
55,737
1,75,572
3,26,061
8,10,450

Total
Balance as on 1st April 2001

8,10,450
54,000

16,303
90,000 Net Profit for the year b/d
2,73,758
3,80,061

Total

3,26,061

3,80,061

NOTES:
Provision for managerial remuneration: 10% of net profit before tax, i.e., 10% of
[(8,10,450) (75,600 + 64,080 + 2,160 + 43,200 + 63,450 + 4,590 = 2,53,080)] = 55,737.
Provision for income tax: 35% of [(8,10,450 (2,53,080 as above + 55,737 = 3,08,817)] =
1,75,572.

Ex. 2
Req. 1
Financial statements

Sangeeta Udhyog Ltd.

BALANCE SHEET AS AT 31ST MARCH 2006.
Amount
(Rs.)

Assets

Share Capital

Fixed Assets

Authorised
4,00,000 equity shares of
Rs. 10 each.

Leasehold Factory
Building

Issued, Subscribed and

Paid-Up:
3,20,000 equity shares of
Rs. 10 each.
Less: Calls-in-arrear

13,13,680

40,00,000
Plant & Machinery
Less: Dep.@ 14%
32,00,000
8,000

General Reserve
Balance in P&L A/C

Secured Loans
Bank Loan long term

Debtors
Less: Provision for
Doubtful Debts

Current Liabilities and

Provisions

Less: Provision for

discount
A. Current Liabilities:
Creditors

15,120
9,600
24,000

10,27,200
1,43,808

8,83,392

40,000
7,200

32,800

9,98,720
80,000

10,78,720

31,92,000
Furniture
Less: Dep. @ 18%
71,466 Current Assets,
Loans & Advances
3,93,431 A. Current Assets:
Inventory-4,00,000 Stock- in trade
Loose tools

Reserves And Surplus

Expenses due:
Wages
Salaries
Interest on loan

Amount
(Rs.)

Cash in hand
7,37,760 Bank Current
Account
Miscellaneous
Expenditure
48,720

13,15,200
68,000
12,47,200
24,960

12,22,240
15,360
8,54,880

B. Provisions:

Preliminary Expenses
Less: 1/3rd W/o

Income Tax
Less: Advance Tax Paid
Proposed Dividend

3,84.815
1,14,320

Total

48,000
16,000

32,000

2,70,495
3,19,200
54,33,072

Total

54,33,072

SANGEETA UDHYOG LTD.

PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED 31ST MARCH 2006.
Expenses

Amount
(Rs.)

Opening Inventory
Purchases
Less: Purchase Return
Carriage Inwards

Wages
Add: due
Manufacturing Expenses
Rates & Electricity
Loose tools
Less: closing inventory
Machinery Repairs
Gross Profit c/d
Total
Office salaries and
expenses
Add: due
Directors' Fees &
Remuneration
Interest on Bank Loan
Add: Interest Due
Depreciation:
Plant and machinery
Furniture
Commission
Office Expenses
Carriage outwards
Provision for Doubtful
Debts
Provision for discount
Preliminary Exps. W/o
Auditors Fee

57,45,680
78,480
8,77,920
15,120

1,00,000
80,000

1,04,000
9,600

14,91,360 Sales
Less: Sales return
Closing Inventory
56,67,200
39,280

1,43,808
7,200

Amount
(Rs.)
93,59,200
1,01,120

92,58,080
9,98,720

8,93,040
1,53,920
1,40,880
20,000
34,880
18,16,240
1,02,56,800

1,13,600
96,000

36,000
24,000

Income

60,000

1,51,008
39,120
64,000
74,080
68,000
24,960
16,000

10,000

Total
Gross Profit b/d

1,02,56,800
18,16,240

Provision for Income Tax

Net Profit c/d
Total
Transfer to General
Reserve
Proposed Dividend
Balance Carried to
Balance Sheet
Total

3,84,815
7,14,657
18,16,240

Total
Balance as on 1st April
71,466 2001
3,19,200 Net Profit for the year
b/d
3,93,431
7,84,097

Total

18,16,240
69,440
7,14,657

7,84,097

NOTE:
Provision for income tax: 35% of (18,16,240 all expenses before provision for tax, i.e.,
7,16,768 = 10,99,472) = 3,84,815.