1. From the following particulars furnished by Aayush Co.

Ltd Prepare Profit and Loss

Statement for the year ended 31st March 2012
Rs.
Sale of Products 10,50,000
Stock on 1-4-2011
Work in Progress 37,000
Finished goods 98,000
Raw Materials 1,25,000
Purchase of Raw Materials 4,75,000
Salaries and wages 1,40,000
Power and Electricity expenses 25,000
Depreciation 40,000
Interest on Debentures 15,000
Interest received 7,800
Interest Paid on other borrowings 8,500
Dividends received 9,200
Commission on Sales 9,000
Audit fees and expenses 12,000
Profit on sale of Investments 3,000
Provision for Doubtful Debts 6,300
Managing Directors Remuneration 25,000
Profit on sale of fixed asset 15,000
Income Tax (current) 75,000
Deferred tax 12,000
Stock on 31-3-2012
Raw Materials 60,000
Work-in Progress 35,000
Finished goods 45,000

Solution
Aayush Co. Ltd.
Profit and Loss Statement for the year ended 31-3-2012
Particulars Note No Rs.
I. Revenue from operations 10,50,000
II. Other Income 20,000
III. Total Revenue 10,70,000
IV Expenses:
Cost of Materials consumed 5,40,000
Changes in inventories of finished goods
work-in-Progress and Stock in Trade 55,000
Employee Benefit Expense 1,40,000
Finance Costs 23,500
Depreciation 40,000
Other Expenses 77,300
Total Expenses 8,75,800
 Profit before exceptional items and tax 1,94,200
Exceptional item (Profit) 15,000
Profit before Tax 2,09,200
Tax Expense:
(1) Current Tax 75,000
(2) Deferred Tax 12,000
87,000
Profit for the period 1,22,200

Notes and Explanations to Accounts Rs.

1. Other Income
Interest on Investments 7,800
Dividends received 9,200
Profit on sale of Investments 3,000
20,000
2. Cost of Materials Consumed
Opening stock of Raw Materials 1,25,000
Add Purchase of Raw Materials 4,75,000
6,00,000
Less Closing stock of Raw Materials 60,000
5,40,000
3. Changes in inventories of and work-in Progress Stock in trade
Opening Closing
work-in-Progress 37,000 35,000
Finished goods 98,000 45,000
1,35,000 80,000
55,000
Change in inventories
4. Finance Cost
Interest on Debentures 15,000
Interest on other borrowings 8,500
23,500

Other Expenses
Power and Electricity expenses 25,000
Audit fees and expenses 12,000
Commission on sales 9,000
Provision for Doubtful Debts 6,300
Managing Directores Remuneration 25,000
77,300
M.D. remuneration can be shown in employee benefit expenses.
2. From the information given below, furnished by Dube Enterprises Ltd prepare Profit and
loss Statement for the year ended 31s' March 2012
Rs.
Sales 7,50,000
Inventories (1-4-2011):
Raw Materials and Stores 50,000
Work-in-Progress 20,000
Finished goods 99,000
Purchase of Raw Materials 4,50,000
Salaries and Wages 30,000
Payment to Auditors 54,000
Interest Income 25,000
Dividend received 35,000
Loss on sale of Investments 5,000
Interest on Loan taken 5,000
Depreciation 60,000
Managing Director's Remuneration 28,000
Other Information
1. Inventors on 31 -3-2012
Raw materials and stores: Rs.30,000
Work in Progress: Rs.25,000
Finished goods: Rs.76,000
2. Provide for doubtful Debts Rs.18,000
3. Provision for Taxation to be made at 50% of Taxable income
4. Payment to auditors includes Rs.9000 for other services.

Solution
Dube Enterprises Ltd Statement of profit and Loss for the ended 31st March 2012

1. Revenue from operations 7,50,000

2. Other Income 55,000
3. Total Revenue (1+2) 8,05,000
Expenses
(a) Cost of Materials consumed 4,70,000
(b) Changes in inventories of finished goods work-in-Progress
18,000
and stock in Trade
(c) Employee benefit expenses 30,000
(d) Finance Cost 5,000
(e) Depreciation 60,000
(f) Other Expenses 1,00,000
Total expenses 6,83,000
Profit before Tax 1,22,000
Tax Expenses 61,000
Profit after Tax 61,000
 Notes and Accounts
Rs.
1. Other Income
Interest Income 25,000
Dividend received 35,000
Loss on sale of Investments (5,000)
55,000
2. Cost of Materials consumed
Opening Stock of Raw Materials 50,000
Add Purchase of Raw Materials 4,50,000
Less Closing Stock of Raw Materials (30,000)
Cost of Materials consumed Opening 4,70,000

3. Change in inventories
Increase in work in Progress (5,000)
Decrease in finished stock 23,000
18,000
4. Other Expenses
Payment to Auditors
Audit fees 45,000
Other Services 9,000 54,000
Provision for Doubtful Debts 18,000
Managing Director remuneration 28,000
1,00,000

3. Prepare Balance Sheet of Spandana Company Ltd. from the details as on 31st March 2012
Debit Rs. Credit Rs.
Calls in Arrears 5,000 Share Capital 2,50,000
Furniture 15,390 General Reserve 15,000
Plant and Machinery 68,425 Loan from M.D. 16,000
Closing Stock 91,500 Outstanding:
Sundry Debtors 3,800 Wages 5,200
Cash at Bank 1,39,700 Salary 1,200
Prepaid Insurance 1,680 Rent 600
S. Creditors 4,000
Profit and Loss A/c
(1-4-2011) 12,000
Net Profit 21,495
3,25,495 3,25,495
Additional information:
(1) Proposed Dividend Rs. 9,000 to be Provided
(2) Transfer to general Reserve Rs.6,000
Solution
Spandana Company Ltd
Balance Sheet As at 31st March 2012
Particulars Note Rs.
I. Equity and Liabilities
1. Shareholders’ Funds
(a) Share Capital 2,45,000
(b) Reserves and Surplus 39,945
2. Non-Current Liabilities
3. Current Liabilities
(a) Short term Borrowings 16,000
(b) Trade Payables 4,000
(c) Other current liabilities 7,000
(d) Short-term provisions 9,000
3,20,495
II. Assets
(1) Non-Current Assets
Fixed Assets 83,815
(2) Current Assets
(a) Inventories 91,500
(b) Trade Receivables 3,800
(c) Cash and Cash Equivalents 1,39,700
(d) Short-Term loans and Advances 1,680
3,20,495

Notes and Explanation to Accounts

1. Share Capital
Share Capital 2,50,000
Less calls in Arrears 5,000 2,45,000
2. Reserves and Surplus
General Reserve 15,000
Add Transfer 6,000 21,000
Profit and Loss Statement
Opening Balance 12,000
Add Net Profit 21,495
33,495
Less Transfer to Gen.Res (6,000)
Less Proposed Dividend (9,000) 18,495 39,495
3. Short Term Borrowings
Loan from Managing Director 16,000
4. Short Term Provisions
Proposed Dividends 9,000
5. Fixed Assets
Plant and Machinery 68,425
Furniture 15,390 83,815
4. From the following particulars furnished by Navin Co. Ltd prepare the Balance Sheet as
at 31st March 2012 as required by new Schedule VI
Rs,in 000
Equity Share Capital in shares of Rs.100 each 5,000
General Reserve 500
Plant and Machinery 2,000
Land and Buildings 5,000
Goodwill 600
Trade Marks 150
Investments in Shares and Debentures
Non-Current 400
Current 300
Loan from State Financial Corporation-long term 350
12% Debentures 2,000
Share Application money pending Allotment 100
Borrowing for working Capital-short term 600
Inventories on 31-3-2012
Raw Materials 400
Work in Progress 250
Finished goods 350 1,000
Trade Receivables 150
Trade Payables 120
Provision for Taxation 240
Cash at Bank 1,200
Cash Balance 150
Provision for employee retirement Benefit (long term) 140
Profit & Loss Statement (opening Balance) 400
Profit for the current year after Tax 1,400
Adjustments
Transfer to General Reserve 100
Proposed Dividends 500
Ignore CDT

Solution
Navin Co.Ltd; Balance Sheet as at 31-3-2012
Particulars Note Rs.
I. Equity and Liabilities
1. Shareholders’ Funds
(a) Share Capital 5,000
(b) Reserves and Surplus 1 1,800
(c) Money received against share warrants
2. Share Application Money pending allotment 100
3. Non-Current Liabilities
(a) Long Term Borrowings 2 2,490
(b) Deferred Tax Liabilities
 (c) Other Long Term Liabilities
(d) Long Term Provisions
4. Current Liabilities
(a) Short term Borrowings 600
(b) Trade Payables 120
(c) Other current liabilities
(d) Short-term provisions 3 740
10,850
II. Assets
1. Non-Current Assets
(a) Fixed Assets 4 7,000
(b) Intangible Assets 5 650
(c) Non-Current Investments 400
(d) Long Term Loans and Advances
(e) Other Non-Current Assets
2. Current Assets
(a) Current Investments 300
(b) Inventories 6 1,000
(c) Trade Receivables 150
(d) Cash and Cash Equivalents 1,350
(e) Short-Term loans and Advances
10,850

Notes and Explanation to Accounts

1. Reserves and Surplus
(a) General Reserve
Opening Balance 500
Add Transfer 100 600
(b) Profit and Loss
Opening Balance 400
Add Profit of the Current year after tax 1,400
Less 1,800
Transfer to General Reserve 100
Proposed Dividend 500 600 1200
1800
2. Long Term Borrowings
12% Debentures 2,000
Loan from state Financial Corporation 350
Provision for employee retirement benefit 140 2,490
3. Short Term Provisions
Provision for Taxation 240
Proposed Dividends 500 740
4. Fixed Assets
Plant and Machinery 2,000
Land and Building 5,000 7,000
5. Intangible Assets
Goodwill 600
Trade Marks 150 750
6. Inventories
Raw Materials 400
Work in Progress 250
Finished Goods 350 1,000

5. The Following is the Trial Balance of Pravek Co, Ltd as at 31.03.2012. Prepare Profit and
Loss Statement for the year ended 31st March, 2012 and Balance Sheet as at that date.
Debit Rs. Credit Rs.
Share Capital 20,000 Equity
Rent paid 18,000 2,00,000
Shares of Rs.10 each fully paid
Advertising 13,000 10% Debentures 2,00,000
Buildings 1,00,000 Securities Premium 20,000
Vehicles 1,10,000 Trade Payables 55,000
Trade Marks 20,000 General Reserve 1,60,000
Excise Duty 25,000 Sales 10,75,000
Opening Stock of Raw
75,000 Dividend Income 5,000
Materials
Share Application money
Plant and Machinery 2,50,000 10,000
Pending Allotment
Furniture 50,000 Bank loan (Secured) 50,000
Discount 8,000
Bad Debts 6,000
Commission 7,000
Purchase of Raw Materials 5,25,000
Interest on Bank Loan 15,000
Interest on Debentures 20,000
Salaries and wages 1,40,000
Contribution to Provident fund 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
Adjustments:
1. Closing Stock of Raw Materials: 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%