BANKING COMPANY FINAL ACCOUNTS

Q.1. From the following information, prepare the profit and loss account of Trinity Bank Ltd, for
the year ended 31st March 2003
Particulars
Rs.
Particulars
Rs.
Interest on Investments
3,00,000 Interest on Current Accounts
4,20,000
Interest on Balance with RBI
2,00,000 Rent and Rates
1,80,000
Interest on Loans
25,90,000 Interest on Overdraft
15,40,000
Interest on Fixed deposits
27,50,000 Directors Fees
30,000
Rebate on Bills discounted
4,90,000 Auditors Fees
12,000
(As on 1-4-02)
Interest on Savings Bank Deposits
6,80,000
Commission
82,000 Postage and Telegram
14,000
Establishment Charges
5,40,000 Printing and Stationery
29,000
Discount on Bills discounted
14,60,000 Sundry Charges
17,000
Interest on Cash Credit
22,30,000 P & L Account (as on1-4-2002)
2,00,000
Dividend on Shares
2,00,000 Interest on Borrowings
2,00,000
Income from Joint Venture
1,00,000
(1) Bad debts to be written off amounted to Rs. 4,00,000.
(2) Provision for taxation to be made at 55%.
(3) Rebate on Bills discounted (31-3-2003) Rs. 5,00,000.
(4) Provide for doubtful debts Rs. 1,00,000
Q.2. From the following details prepare the profit and loss account of Modern Bank Ltd for the
year ended 31st March 2003 in the prescribed form:
Interest paid on deposits, borrowings etc.
79,26,660
Interest and discount
1,83,74,725
Rental received
78,000
Net Profit on sale of Investment
2,27,000
Salaries, Allowances, and Provident Fund
97,79,925
Commission, Brokerage and Exchange
42,00,000
Law Charges
72,000
Rates and Taxes
46,300
Postage and Telegram
3,26,070
Audit Fees
60,000
Directors Fees
36,000
Printing and Stationery
2,92,000
Depreciation on Banks Property
8,20,000
Miscellaneous receipts, sale of forms etc.
40,006
Miscellaneous Expenditure
1,65,406
Repairs to Property
32,400
Telephones and Stamps
4,83,200
Advertisement
2,76,000
Insurance and Lighting
3,45,000
Bad debts written off
72,700
Unexpired discount (1-4-2002)
5,70,000
Provision for Bad debts (1-4-2002)
16,10,000
Profit and Loss Account (1-4-2002)
10,00,000
Provision for Taxation (1-4-2002)
24,00,000
During the year, income tax proceeding of the previous years were concluded and the
liability on this account worked out to Rs. 22,40,000.
1

The Bank has make an evaluation at the end of the year of the recoverability of its
advances and finds itself in the following position:
(1) Unsecured advances to the extents of Rs. 60,000 would be fully irrecoverable.
(2) Unsecured loans to the extent of Rs. 40 lakhs would be doubtful of recovery to the extent of
40%: and
(3) Cash credit accounts to the extent of Rs. 25 lakhs have been left without the margin due to
fall in the value of securities and accounts to the extent of 10% are likely to be bad.
It is the banks policy to provide fully against the contingency of bad debts. Provision for
taxation to remain at 55% of the current profits. Unexpired discount and interest on bills
discounted on 31st March 2003, was Rs. 7,25,000.
Q.3. After writing up the Profit and Loss Account, the General Ledger Balances of S.S. Bank
Ltd. as on 31st March, 1998 were as follows:
Particulars
Rs.
Particulars
Rs.
Share Capital
59,75,000 Unpaid Dividend
30,700
Bills for Collection
78,26,181 Debentures in ACC Ltd.
90,000
Cash in Hand
1,05,30,783 Borrowings from other Banks
15,00,000
Machinery in satisfaction of Claim
45,600 Fixed Deposit
3,00,60,520
Cash with R.B.I
1,30,25,300 Saving Bank Deposits
2,60,97,616
Cash with S.B.I
50,11,837 Current Deposits
3,82,90,782
Equity Shares of ACC Ltd.
3,81,700 Provision for Taxation
10,00,000
4% Govt. of India Loan, 2007-08
Provision for Doubtful Debt
5,00,000
of face value Rs.3,00,00,000
2,40,90,000 Balance with other Bank
10,70,640
Bengal Govt. Loan Bonds, 2003 of
Loans, Cash Credits, & O/D
3,96,70,682
the face Value of Rs.75,00,000
70,30,400 Bills Payable
4,77,679
Punjab Govt. Loan Bonds, 2010 of
Staff Provident Fund
9,60,785
the face value Rs.38,00,000
39,56,100 Sundry Creditors
25,607
Interest Accrued on Investments
1,80,720 Unexpired Discounts
20,410
Profit for the year
11,30,240 Bills Discounted & Purchased
57,38,130
Reserve fund as on 1.4.1997
57,75,000 Building
11,70,577
Dividend Recoverable
12,000 Furniture
1,30,650
Profit and Loss Account credit balance brought forward from the previous year was
Rs.12,60,780 out of which appropriations made were Rs.3,58,000 for dividend and Rs.6,12,000
for taxes paid.
The following further information is relevant:
(1) The Authorised Share Capital of the Bank Was Rs.1,00,00,000 divided into shares of
Rs.100 each, out of which 75,000 shares were issued and subscribed with Rs.80 per share
called up.
(2) During the year additions of Rs.1,20,077 were made to Building and Rs.29,620 to furniture ,
while Rs.7,600 realised on sale of a part of furniture (Book Value Rs.7,600) Depreciation on
Furniture to 31st March 1998 was Rs.30,600 and that on Building was Rs.1,40,500.
Prepare the Balance Sheet of the Bank as on 31st March, 1998.

Q.4. Following are some of the balances as on 31st March 1998 of Vaibhav Bank Ltd.
Interest on Advances
800 Statutory Reserve
900
Comm., Exchange & Brokerage
200 Profit and loss Account
650
Cash Balance
200 Bills Purchased and discounted
250
Balance with other Banks
400 Cash, Credit, Overdrafts and
Cash with RBI
100 Demand Loans
1,425
Profit on Sale of Investments
20 Term Loans
1,275
Other Revenue Receipts
80 Fixed Deposits
275
Share Capital
2,000 Savings Deposits
325
20% Investments in Govt.
Current Deposits
125
Securities (Purchased at 60%
Premises (Net)
1,375
of Face Value)
300 Furniture
250
Other Securities @ 25%
Interest (including paid 45)
120
(Purchased at Par)
100 Salary
75
Borrowing from Other Banks
300 Bills Payable (Net)
25
Printing and Stationery
35 Postage and Telegram
20
Borrowing from RBI
100 Repairs
25
Following Additional Information is also furnished:
(i) Advances have been classified as under with given details: (Rs. In 00)
Classification of Assets
Cash Credits
Term Loans
Standard Assets
1,000
975
Sub Standard Assets
125
100
Doubtful:
Up to One Year
100
20
One to Three Years
120
50
More than Three Years
50
80
Loss Assets
30
50
(ii) Standard and Substandard assets in bills portfolio are in the ratio of 9:1
(iii) Doubtful assets are secured up to 50%.
(iv) No Provisions has been made so far against these assets.
(v) Bills for collection Rs.235. (in thousands)
(vi) 40% of total interest on investment has accrued.
Prepare final accounts of Vaibhav Bank Limited.
Q.5. From the following information prepare a Balance Sheet of Continental Bank Ltd. as on 31st
March 2000 giving the relevant schedules:
(Rs. In lakhs)
Debit Balance
Rs.
Credit Balances
Rs.
Current Accounts
28.00 19,80,000 Shares of Rs.10 each
198.00
Cash Credits
812.10 Statutory Reserve
231.00
Cash in Hand
160.15 Net Profit before Appropriation
150.00
Cash with RBI
37.88 Profit and Loss Account
412.00
Cash with other Banks
155.87 Fixed Deposit
517.00
Money at Call
210.12 Saving Deposit
450.00
Gold
55.23 Current A/c
520.12
Government Securities
110.17 Bills Payable
0.10
Premises
155.70 Borrowings from other Banks
110.00
Furniture
70.12
Term Loans
792.88
2,588.22
2,588.22

Additional Information:
Bills for Collections
18,10,000
Advances and endorsements
14,12,000
Claims against the bank not acknowledged as debt
55,000
Depreciation Charges: Premises
1,10,000
Furniture
78,000
50% of the Term Loans are secured by Government Guarantees. 10% of Cash Credits is
unsecured. Also calculate the Cash Reserves (C.R.R) required and Statutory Liquid Reserve
(S.L.R) required, given that Cash Reserve required is 3% of demand and time liabilities & Liquid
Reserves required is 30% of demand and time liabilities.
Q.6. The following figures are taken from the books of B.U. Bank Ltd. You are required to
prepare the Balance Sheet as at 31st March, 2002 and Profit and Loss Account for the year
ended as on that date:
Current Accounts
1,60,00,000 Interest Accrued and Paid
4,00,000
Saving Bank Account
60,00,000 Salaries and Allowances
1,02,000
Fixed and Time Deposits
19,00,000 Salary to General Manager
48,000
Sundry Creditors
60,000 Directors Fees
10,000
Bills Payable
16,00,000 Rent and Rates
40,000
Bills for Collection
2,80,000 General Expenses
6,000
Acceptances and
Stationery and Printing
10,000
Endorsements on behalf of
Audit Fees
4,000
Customers
4,00,000 Money at Call and Short
6,00,000
Borrowings from bank
14,00,000 Notice
60,00,000
Unclaimed Dividend
60,000 Investment at Cost
Dividend for 2000
1,00,000 Premises (after depreciation
24,00,000
Profit & Loss A/c (Cr) on
4,20,000 up
to
March
2001
1,20,000
1.4.01
7,00,000 Rs.2,00,000)
30,00,000
Reserve Fund
Cash in Hand
26,00,000
Share Capital (1,00,000
10,00,000 Cash with RBI
12,00,000
shares of Rs.20 each, Rs.10
15,00,000 Cash with other Banks
1,40,00,000
paid Up)
Bills Discounted & Purchased
Interest and discount received
Loans, O/D and Cash Credit
Rebate on Bills Discounted for unexpired term amounted to Rs.10,000. Create Provision for
Taxation Rs.2,00,000 and for doubtful Debts Rs.60,000. Allow 5% depreciation on premises on
the original cost.
Q.7. From the following Trail Balance of the Excellent Bank Ltd. prepare the Balance Sheet and
Profit and Loss Account, making all necessary provisions.
Trail Balance on 31st March 2003
Particulars
Rs.
Current Deposits
4,55,00,000
Saving Bank Deposits
1,45,20,000
Fixed and Time Deposits
3,71,80,000
Sundry Creditors Accounts
4,55,000
Debts due to banks, secured by investments
1,22,00,000
Rebate on Bills Discounted
15,000
Branch Adjustment (Cr)
45,55,000
Reserve Fund
1,00,00,000
Dividend Equalisation Fund
25,00,000
Capital: 2,00,000 shares of Rs. 100 each Rs. 50 per share paid
1,00,00,000
4

(1)
(2)

(3)
(4)
(5)

Interest and Discount Received

58,00,000
Exchange and Commission (Cr.)
17,00,000
General charges recovered
55,000
Profit and Loss Account, Balance on 1-4-2002
8,52,000
Cash in hand
4,37,500
Cash at Bank
68,69,500
Bills for collection
2,21,00,000
Liability of Customers acceptances
1,11,68,000
Investment in Government Securities
4,52,00,000
Investment in shares
47,00,000
Interest accrued on Investment
8,75,000
Loans
4,41,00,000
Furniture, Fixtures and Equipment
5,00,000
Depreciation
5,00,000
Interest Paid
12,00,000
Exchange and Commission paid
1,00,000
Salaries
24,00,000
Directors Fees
1,00,000
Stationery and Advertisement
4,00,000
Miscellaneous Expenses
3,00,000
Land and Building
30,00,000
Bills Purchased and Discounted
3,31,00,000
Money at Call
15,00,000
Property acquired in satisfaction of claim.
50,000
Current accounts include Rs. 85,00,000 debit balance, being overdrafts. One of the
accounts of Rs. 95,000 is doubtful.
During the year property acquired in 2000 in satisfaction of a defaulted debt of Rs. 25,000
was sold for Rs. 18,000. The amount of Rs. 18,000 was credited to the account, no further
adjustment having been made yet.
Provision for taxation 10,00,000.
Transfer to Dividend Equalisation Fund Rs. 3,00,000
Proposed Dividend @ 10%.