rtgh

2nd Puc Accountancy Chapter 8 Financial Statements Of A Company Part – 2 Notes | ದ್ವಿತೀಯ ಪಿ.ಯು.ಸಿ ಲೆಕ್ಕಶಾಸ್ತ್ರ ಅಧ್ಯಾಯ – 8 ನೋಟ್ಸ್

ದ್ವಿತೀಯ ಪಿ.ಯು.ಸಿ ಲೆಕ್ಕಶಾಸ್ತ್ರ ಅಧ್ಯಾಯ – 8 ನೋಟ್ಸ್ 2nd Puc Accountancy Chapter 8 Financial Statements Of A Company Notes Question Answer pdf Karnataka Kannada 2nd Puc Accountancy Chapter 8 Notes Pdf 2023 Financial Statements Of A Company Class 12 Notes Financial Statements Of A Company Class 12 Important Questions Financial Statements Of A Company Problems And Solutions Kseeb Solution For Class 12 Chapter 8 Notes 2nd Puc Accountancy Chapter 8 Financial Statements Of A Company Part – 2 Notes

2nd Puc Accountancy Chapter 8 Notes

2nd Puc Accountancy Chapter 8 Financial Statements Of A Company Part - 2 Notes | ದ್ವಿತೀಯ ಪಿ.ಯು.ಸಿ ಲೆಕ್ಕಶಾಸ್ತ್ರ ಅಧ್ಯಾಯ - 8 ನೋಟ್ಸ್
2nd Puc Accountancy Chapter 8 Financial Statements Of A Company Part – 2 Notes

2nd Puc Accountancy Chapter 8 Notes

Short Questions With Answers

Q1. What are the limitations of financial statements?

A: Limitation is:

  • Financial statements reflect historical data i.e reflects the original price of the items or the price at which items were acquired. It fails to highlight the current price of items as per market and also inflated prices due to rising inflation in the market. Hence data and information are historical in nature.
  • Financial statements do not portray the qualitative aspects of any transaction, the aspects such as size, color, quality, and capabilities. Only quantitative data which can be expressed in monetary value are considered
  • The financial statement is biased in nature as it is dependent on human interference.
  • It becomes difficult to assess the performance of another company
  • It will be difficult to forecast as the statement is prepared based on historical data.

Q2. List any three objectives of financial statements.

A: The objectives of preparing financial statements are:

  • A financial statement provides timely and reliable information on the economic status of a company on a periodical basis. It also makes information available to external users or stakeholders who do not have direct access to the information.
  • A financial statement helps in revealing the true financial position of a company. It contains information related to the liquidity, profitability, financial viability, and solvency of an organization.
  • A financial statement is helpful in evaluating the earning capacity of a firm.

Q3. State the meaning of financial statements.

A: Financial statements are the end products of an accounting process, it provides a true picture of the performance of the company over a time period and such a statement is used by different users of accounting information. These statements are prepared annually

Q4. How will you disclose the following items in the Balance Sheet of a company:

(i) Loose Tools

(ii) Uncalled liability on partly paid-up shares

(iii) Debentures Redemption Reserve

(iv) Mastheads and publishing titles

(v) 10% debentures

(vi) Proposed dividends

(vii) Share forfeited account

(viii) Capital Redemption Reserve

(ix) Mining Rights

(x) Work-in-progress

A: Disclosure of various items in the Balance Sheet of a company is given below.

Part 2 Class 12 Chapter 3-1

Q5. State the importance of financial statements to
(i) shareholders
(ii) creditors
(iii) government
(iv) investors

The following are important financial statements:

1. Shareholders: For a shareholder, a financial statement is helpful in determining the viability and profit-making capacity of a business. It provides businesses with sufficient data to analyze the financial health and performance of the business.

2. Creditors: A financial statement is essential for a creditor to understand the creditworthiness of the business along with liquidity. It helps them to decide whether further investments can be done in this business.

3. Government: A financial statement helps the government in determining GDP, national income, industrial growth, etc. which leads to the formulation of various policies and addressing problems like poverty and unemployment, etc.

4. Investors: For Investors who have invested or those planning to invest, a financial statement is necessary. The financial statement helps determine the prospects and viability of new investments.

Q6. What is Amortisation?

A: Amortisation refers to the writing of sunk cost, deferred revenue expenses and intangible assets which need not be replaced.

Q7. What are Intangible assets? Give Examples.

A: Assets that do not have physical form are known as intangible assets. It includes patents Goodwill, trademarks, etc.

Karnataka 2nd PUC Accountancy Chapter 8 Financial Statements of a Company Notes

Long Questions And Practical Problems with Solutions

Q1. Explain in detail the significance of the financial statements.

A: Importance of financial statements:

1. It provides information to various users of accounting information which can be both internal and external. Users derive information as per their needs from such statements. For example, it provides shareholders an idea about the viability of a business while the same statement can be used by tax authorities to determine the tax payable by an organization.

2. It helps management in comparing performance which can be on both inter and intra-firm basis, it helps in determining the viability of the business and also is helpful in the framing of policies for business. It enhances the decision-making capabilities of the management.

3. Financial statements help creditors and investors determine the state of solvency of a business which influences the decision to offer loans and credit.

4. Financial statements help provide information on different policies, methods, best practices, and accounting processes. Disclosing accounting policies simplifies financial statements and makes users of accounting information.

5. The government uses accounting information to determine various parameters of national growth like GDP, National Income, Industrial growth, etc.

6. Investors need information on business solvency and profitability to offer further loans and invest in the business and such information is obtained from financial statements.

Q2. Explain the limitations of financial statements.

A: Limitations are:

1. Financial statements reflect historical data i.e. it reflects the original price of the items or the price at which items were acquired. It fails to highlight the current price of items as per market and also inflated prices due to rising inflation in the market. Hence data and information are historical in nature.

2. Financial statements do not portray the qualitative aspects of any transaction, the aspects such as size, color, quality, and capabilities. Only quantitative data which can be expressed in monetary value are considered.

3. Financial statement is biased in nature as it is dependent on personal judgment regarding the way transactions are recorded

4. It becomes difficult to assess the financial performance of one company with another due to differences in practices and methods adopted by each company.

5. It will be difficult to forecast as the statement is prepared based on historical data as it fails to capture inflation rates.

6. The company can manipulate the data to show a better liquidity position which can give a false impression to the investors leading to project cancellation

Q3. Explain the nature of the financial statements.

A: The nature of financial statements are:

1. Financial statement record facts about the items at the original price at which they were purchased and doesn’t take into account the prevailing market price, and also do not include price fluctuations due to inflation.

2.The financial statements are created based on various accounting conventions such as the Prudence convention, matching concept etc., and adhering to such conventions results in the statements being easy to understand, compare and reflect the fair and true financial situation of the organization.

3. A financial statement is based on many concepts such as the going concern concept, realization concept, and money measurement concept. A financial statement adheres to all these concepts when financial statements are prepared.

4. In preparing financial statements personal judgments play an important role. For example when determining which method to charge depreciation and recording of stock at market value or cost price. All these are based on personal judgment

Q4. Prepare the format of the balance sheet and explain the various elements of the balance sheet.

A: COMPANY’S BALANCE SHEET- As per REVISED SCHEDULE VI

Name of the Company…BALANCE SHEETas on…

ParticularsNote No.Figures as of the end of the Current YearFigures as of the end of the Previous Year
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
(b) Trade Payables
(c) Other Current Liabilities
(d) Short-Term Provision
TOTAL
II. ASSETS
(1) Non-Current Assets
(a) Fixed Assets
(i) Tangible Assets
(ii) Intangible Assets
(iii) Capital Work-in-Progress
(iv) Intangible assets under development
(b) Non-Current Investments
(c) Deferred tax assets (net)
(d) Long-Term Loans and Advances
(e) Other Non-Current Assets
(2) Current Assets
(a) Current Investments
(b) Inventories
(c) Trade Receivables
(d) Cash and Cash Equivalents
(e) Short-Term Loans and Advances
(f) Other Current Assets
TOTAL

The elements of a balance sheet consist of:

A. Shareholder Funds

1. Share Capital consists of Authorised capital, Subscribed capital and Issued capital equity, and preference share.

2. Reserves and Surplus consists of Capital Reserve, Debenture Redemption, Capital Redemption Reserve, Tax Reserve, General Reserve, and Share warrants. Share warrants provide the holder to have ownership of equity shares of a company. When money is received from selling share warrants it is called as money received against warrants.

B. Share Application money pending allotment: It refers to an application on which allotment is pending but amount is received. It takes place when a company issues equity shares publicly in order to raise funds.

C. Non-Current Liabilities: These consists of the following items: long-term borrowings, deferred tax liabilities, long-term provisions and other long-term liabilities.

D. Current liabilities: These consist of the following items: short-term liabilities, trade payables, short-term provisions

E. Assets which include Non-current and Current Assets. Non-current assets can be long-term loans, plant, machinery, furniture, goodwill, etc. while current assets are investment is shares and debentures, finished goods, raw materials, cash and cash equivalents, bank balance, cheques not encashed, and short-term.

Q5. Prepare the format of the statement of Profit and Loss and explain its items.

A: As per the REVISED SCHEDULE VI, the statement is as follows

Statement of Profit and Loss For the year ended…

S. No.ParticularsNote No.Figures for the Current YearFigures for the Previous Year
IRevenue from Operations
IIOther Income
IIITotal Revenue (I + II)
IVExpenses:
Cost of Material Consumed
Purchase of Stock-in-Trade
Changes in inventories of finished goods
Work-in-progress and Stock-in-Trade
Employee Benefit Expenses
Finance Cost
Depreciation and Amortisation Expenses
Other Expenses
Total Expenses
VProfit before exceptional and extraordinary items and tax (III-IV)
VIExceptional items
VIIProfit before extraordinary item and tax (V – VI)
VIIIExtraordinary Items
IXProfit Before Tax (VII-VIII)
XTax Expenses
(1) Current Tax
(2) Deferred Tax
XIProfit/(Loss) for the period from continuing operations (IX – X)
XIIProfit/ (Loss) from discontinuing operations
XIIITax expenses of discontinuing operations
XIVProfit/(Loss) from discontinuing operations (after Tax (XII – XIII)
XVProfit (Loss) for the period (XI + XIV)
XVIEarning Per Equity Shares
(1) Basic
(2) Diluted

Items of Profit and Loss Statement are:

1. Revenue from Operations: Revenue is earned from the basic operating activities of an organization. The source of revenue varies for financing and non-financing companies. For financing companies, the revenue sources are Interest, dividends, and other types of financial services while for a non-financing company, it includes revenues earned from sales of products and services and other operating activities.

2. Other Incomes: Refers to incomes that are earned separately and not from any operating activity. These are the sources: Gain on the sale of investments, income from interest, and dividends as such.

3. Expenses: These include all the expenses such as the cost of materials consumed, purchasing of stock in trade, also changes in inventories, stock in trade, and work in progress.

Q6. Financial statements reflect a combination of recorded facts, accounting conventions, and personal judgments discussed.

A: Financial statements reveal the true financial position of a company and help in formulating various decisions and policy making. The nature of financial statements is dependent on these aspects:

1. Financial statement record facts about the items at the original price at which they were purchased and doesn’t take into account the prevailing market price, and also do not include price fluctuations due to inflation.

2. The financial statements are created based on various accounting conventions such as the Prudence convention, matching concept, etc., and adhering to such conventions results in the statements being easy to understand, compare and reflect the fair and true financial situation of the organization.

3. A financial statement is based on many concepts such as the going concern concept, realization concept, and money measurement concept. A financial statement adheres to all these concepts when financial statements are prepared.

4. In preparing financial statements personal judgments play an important role. For example when determining which method to charge depreciation and recording of stock at market value or cost price. All these are based on personal judgment

Q7. Explain how financial statements are useful to the various parties who are interested in the affairs of an undertaking.

A: The various parties interested in the financial statements of a company can be broadly classified as: 1. Internal and 2. External

Internal Users

1. Owners: The interest of an owner is towards knowing whether profit is earned or loss is incurred by the business. They are more interested in knowing about the viability of the capital that is invested in the business.

2. Management: Financial statements help management in devising new policies for the growth of business and also provide management with the insights required for implementing various cost-cutting measures.

3. Employees: They are interested in timely payments, bonuses, and appraisals at the decided time. Financial statements help employees to learn about the financial position of the organization so that appropriate salaries can be demanded.

External Users:

1. Banks and Financial Institutions: Such institutions provide credit so it is necessary to understand the liquidity, solvency, and creditworthiness of the organization for loan requirements in the future.

2. Creditors: Businesses own money to creditors and hence it is important for them to have information about the creditworthiness of the business.

3. Investors or potential investors: These are people who will provide funds by means of investment in the business, hence the viability and solvency of an organization will help in making investment decisions.

4. Tax Authorities: Information is required by them for determining the types of taxes that can be charged on the organization.

5. Government: Government needs information to determine National Income, GDP and industrial growth. Financial statements help the government in formulating various policies and address issues like poverty and unemployment.

6. Consumers: An organization publishing a financial statement makes consumers aware of the profits they are earning and the relative expenses that go into providing services at affordable prices, thus helping in gaining a good name among consumers.

7. Public: Public knowledge of financial statements is about how the business is spending money for social welfare.

8. Researchers: Researchers use financial statements to predict market trends and undertake research projects.

Q8. Explain the process of preparing income statements and balance sheets.

A: The process of preparing the income statement and balance sheet is as follows:

Income Statement:

1. Prepare a trial balance as per the balance of different accounts in the ledger.

2. Determine revenue received from the business operation which is achieved by subtracting sales return from sales conducted.

3. Add incomes received other than revenue (such as cash discount, profit earned from sale of assets.

4. Deduct expenses from total revenue to determine profit before tax.

5. Deduct tax paid by the company from the amount determined as profit before tax to arrive at Net Profit or Loss.

Balance Sheet:

The balance sheet consists of two parts: Equity and Liabilities and Assets.

1. The equity and liabilities contain shareholder funds, non-current liabilities, current liabilities and share application money pending allotment are recorded.

2. Assets are recorded next, it contains all non-current and current assets

3. Tally the total of both sides. It must be equal for the total to tally.

Q9. Show the following items in the balance sheet as per the provisions of the Companies Act, 2013 in Schedule III:

Particulars Particulars 
Preliminary Expenses2,40,000Goodwill30,000
Discount on the issue of shares20,000Loose tools12,000
10% Debentures2,00,000Motor Vehicles4,75,000
Stock in Trade1,40,000Provision for tax16,000
Cash at bank1,35,000
Bills receivable1,20,000

The solution to this question is as follows:

Extract of Balance Sheet as on March 31, 2013

ParticularsNote No.Amount (₹)
I. Equity and Liabilities
1. Shareholders’ Funds
a. Share Capital
b. Reserves and Surplus
2. Non-Current Liabilities
Long-term Borrowings12,00,000
3. Current Liabilities
Other Current Liabilities
     b. Short-term Provisions216,000
II. Assets
1Non-Current Assets
Fixed Assets
         i. Tangible Assets34,75,000
        ii. Intangible Assets430,000
     b. Non-Current Investments
2. Current Assets
Inventories51,52,000
     b. Trade Receivables61,20,000
     c.Cash and Cash Equivalents71,35,000
    d. Other Current Assets82,60,000

Notes to Accounts

ParticularsAmount(₹)
1. Long-Term Borrowings
10% Debentures2,00,000
2. Short-Term Provisions
Provision for Tax16,000
3. Tangible Assets
Motor Vehicles4,75,000
4. Intangible Assets
Goodwill30,000
5. Inventory
Loose Tools 12,000
Stock 1,40,0001,52,000
1,52,000
6. Trade Receivables
Bill Receivable1,20,000
7. Cash and Cash equivalents 
Cash at Bank1,35,000
8. Other Current Assets
Preliminary Expenses 2,40,000
Discount on Issue of Shares 20,0002,60,000
2,60,000

Q10. On 1st April 2017, Jumbo Ltd. issued 10,000; 12% debentures of ₹. 100 each a discount of 20%, redeemable after 5 years. The company decided to write off a discount on the issue of such debentures over the lifetime of the Debentures. Show the items in the balance sheet of the company immediately after the issue of these debentures.

The solution to this question is as follows:

Balance Sheet as on April 01, 2017

ParticularsNote No.Amount (₹)
I. Equity and Liabilities
1. Shareholders’ Funds
a. Share Capital
b. Reserves and Surplus
2. Non-Current Liabilities
      a. Long-term Borrowings110,00,000
3. Current Liabilities
      a. Other Current Liabilities
       b. Short-term Provisions
Total10,00,000
II. Assets
1Non-Current Assets
     a. Other Non-Current Assets21,60,000
2. Current Assets
     a. Other Current Assets340,000
     b. Cash and Cash Equivalents48,00,000
Total10,00,000

Notes to Accounts

ParticularsAmount(₹)
1. Long-Term Borrowings
12% Debentures10,00,000
2. Other Non-current assets
Unamortized discount on issue of Debentures1,60,000
3. Other Current Assets
Unamortized discount on issue of Debentures40,000
4. Cash and Cash Equivalents
Bank8,00,000

3. From the following information prepare the balance sheet of Gitanjali Ltd., as per the (Revised) Schedule VI:

Q11. Inventories ₹. 14,00,000; Equity Share Capital ₹. 20,00,000; Plant and Machinery ₹. 10,00,000; Preference Share Capital ₹. 12,00,000; Debenture Redemption Reserve ₹. 6,00,000; Outstanding Expenses ₹. 3,00,000; Proposed Dividend ₹. 5,00,000; Land and Building ₹. 20,00,000; Current Investments ₹. 8,00,000; Cash Equivalent ₹. 10,00,000; Short-term loan from Zaveri Ltd. (A Subsidiary Company of Twilight Ltd.) ₹. 4, 00,000; Public Deposits ₹. 12, 00,000.

The solution to this question is as follows:

Balance Sheet as on …

ParticularsNote No.Amount (₹)
I. Equity and Liabilities
1. Shareholders’ Funds
a. Share Capital132,00,000
b. Reserves and Surplus26,00,000
2. Non-Current Liabilities
      a. Long-term Borrowings312,00,000
3. Current Liabilities
      a. Other Current Liabilities43,00,000
       b. Short-term Borrowings54,00,000
       c. Short-term Provisions65,00,000
Total62,00,000
II. Assets
1Non-Current Assets
    a. Fixed Assets
       i. Tangible Assets730,00,000
       ii. Intangible Assets
     b. Non-Current Investments
2. Current Assets
     a. Inventories14,00,000
      b. Current Investments8,00,000
      c. Cash and Cash Equivalents10,00,000
Total62,00,000

Notes to Accounts

ParticularsAmount(₹)
1. Share Capital
Equity Share Capital20,00,000
Preference Share Capital12,00,000
32,00,000
2. Reserve and Surplus
Debenture Redemption Reserve6,00,000
3. Long-term Borrowings
Public Deposits12,00,000
4. Other Current Liabilities 
Outstanding Expenses3,00,000
5. Short-term Borrowings
Loan from Zaveri Ltd.4,00,000
6. Short-Term Provisions
Proposed Dividend5,00,000
7. Tangible Assets
Land and Building20,00,000
Plant and Machinery10,00,000
30,00,000

Q12. From the following information prepare the balance sheet of Jam Ltd. as per the (revised) Schedule VI:

Inventories ₹. 7, 00,000; Equity Share Capital ₹. 16, 00,000; Plant and Machinery ₹. 8, 00,000; Preference Share Capital ₹. 6, 00,000; General Reserve’s ₹. 6, 00,000; Bills payable ₹. 1, 50,000; Provision for taxation ₹. 2, 50,000; Land and Building ₹. 16, 00,000; Noncurrent Investments ₹. 10, 00,000; Cash at Bank ₹. 5, 00,000; Creditors ₹. 2, 00,000; 12% Debentures ₹. 12,00,000.

The solution to this question is as follows:

Balance Sheet as on March 31, 2013

ParticularsNote No.Amount (₹)
I. Equity and Liabilities
1. Shareholders’ Funds
a. Share Capital122,00,000
b. Reserves and Surplus26,00,000
2. Non-Current Liabilities
      a. Long-term Borrowings312,00,000
3. Current Liabilities
      a. Short-term Borrowings
       b. Trade Payables43,50,000
       c. Short-term Provisions52,50,000
Total46,00,000
II. Assets
1Non-Current Assets
    a. Fixed Assets
        i. Tangible Assets624,00,000
    b. Non-Current Investments10,00,000
2. Current Assets
    a. Inventories7,00,000
    b. Cash and Cash Equivalents75,00,000
Total46,00,000

Notes to Accounts

ParticularsAmount(₹)
1. Share Capital
Equity Share Capital16,00,000
Preference Share Capital6,00,000
22,00,000
2. Reserve and Surplus
General Reserve6,00,000
3. Long-Term Borrowings
12% Debentures12,00,000
4. Trade Payables
Creditors2,00,000
Bills Payable1,50,000
3,50,000
5. Short-Term Provisions
Provision for Taxation2,50,000
6. Tangible Assets
Land and Building16,00,000
Plant and Machinery8,00,000
24,00,000
7. Cash and Cash Equivalents
Bank5,00,000

Q13. From the following information prepare the balance sheet of Jam Ltd. as per the (revised) Schedule VI:

Inventories ₹. 7, 00,000; Equity Share Capital ₹. 16, 00,000; Plant and Machinery ₹. 8, 00,000; Preference Share Capital ₹. 6, 00,000; General Reserve’s ₹. 6, 00,000; Bills payable ₹. 1, 50,000; Provision for taxation ₹. 2, 50,000; Land and Building ₹. 16, 00,000; Noncurrent Investments ₹. 10, 00,000; Cash at Bank ₹. 5, 00,000; Creditors ₹. 2, 00,000; 12% Debentures ₹. 12,00,000.

The solution to this question is as follows:

Balance Sheet as on March 31, 2013

ParticularsNote No.Amount (₹)
I. Equity and Liabilities
1. Shareholders’ Funds
a. Share Capital122,00,000
b. Reserves and Surplus26,00,000
2. Non-Current Liabilities
      a. Long-term Borrowings312,00,000
3. Current Liabilities
      a. Short-term Borrowings
       b. Trade Payables43,50,000
       c. Short-term Provisions52,50,000
Total46,00,000
II. Assets
1Non-Current Assets
    a. Fixed Assets
        i. Tangible Assets624,00,000
    b. Non-Current Investments10,00,000
2. Current Assets
    a. Inventories7,00,000
    b. Cash and Cash Equivalents75,00,000
Total46,00,000

Notes to Accounts

ParticularsAmount(₹)
1. Share Capital
Equity Share Capital16,00,000
Preference Share Capital6,00,000
22,00,000
2. Reserve and Surplus
General Reserve6,00,000
3. Long-Term Borrowings
12% Debentures12,00,000
4. Trade Payables
Creditors2,00,000
Bills Payable1,50,000
3,50,000
5. Short-Term Provisions
Provision for Taxation2,50,000
6. Tangible Assets
Land and Building16,00,000
Plant and Machinery8,00,000
24,00,000
7. Cash and Cash Equivalents
Bank5,00,000

Q14. Prepare the balance sheet of Jyoti Ltd. as on March 31, 2017, from the following information:

Building ₹. 10,00,000; Investments in the shares of Metro Tyers ₹. 3,00,000; Stores & Spares ₹. 1,00,000; Discount on issue of 10% debentures ₹. 10,000; Statement of Profit and Loss (Dr.) ₹. 90,000; 5,00,000 Equity Shares of ₹. 20 each fully paid-up; Capital Redemption Reserve ₹. 1,00,000; 10% Debentures ₹. 3,00,000; Unpaid dividends ₹. 90,000; Share options outstanding account ₹. 10,000.

The solution to this question is as follows:

Balance Sheet as on March 31, 2017

ParticularsNote No.Amount (₹)
I. Equity and Liabilities
1. Shareholders’ Funds
a. Share Capital110,00,000
b. Reserves and Surplus210,000
2. Non-Current Liabilities
Long-term Borrowings33,00,000
3. Current Liabilities
Other Current Liabilities41,00,000
Total14,10,000
II Assets
1Non-Current Assets
     a. Fixed Assets
       i. Tangible Assets510,00,000
     b. Non-Current Investments63,00,000
2. Current Assets
     a. Inventories71,00,000
     b. Other Current Assets810,000
Total14,10,000

Notes to Accounts

ParticularsAmount(₹)
1. Share Capital
Equity Share Capital (50,000* shares of ₹ 20 each)10,00,000
2. Reserve and surplus
Capital Redemption Reserve1,00,000
Less: Statement of Profit or Loss (Debit)90,000
10,000
3. Long-term Borrowings
10% Debentures3,00,000
4. Other Current Liabilities
Unpaid Dividend90,000
Share Option Outstanding10,000
1,00,000
5. Tangible Assets
Building10,00,000
6. Non-Current Investments
Shares of Metro Tyres3,00,000
7. Inventory
Stores and Spares1,00,000
8. Other Current Assets
Discount on Issue of 10% Debentures10,000

Q15. Brinda Ltd. has furnished the following information:

(a) 25,000, 10% debentures of ₹. 100 each;

(b) Bank Loan of ₹. 10, 00,000 repayable after 5 years;

(c) Interest on debentures is yet to be paid.

Show the above items in the balance sheet of the company as on March 31, 2017.

The solution to this question is as follows:

Extract of Balance Sheet as on March 31, 2017

ParticularsNote No.Amount (₹)
I. Equity and Liabilities
1. Shareholders’ Funds
a Share Capital
b. Reserves and Surplus
2. Non-Current Liabilities
Long-term Borrowings135,00,000
3. Current Liabilities
Other Current Liabilities22,50,000

Notes to Accounts

ParticularsAmount(₹)
1. Long-Term Borrowings
12% Debentures25,00,000
Bank Loan10,00,000
35,00,000
2. Other Current Liabilities
Interest on Debentures2,50,000

Q16. Prepare a balance sheet of Black Swan Ltd., as on March 31, 2017, from the following information:

General Reserve:3,000
10% Debentures:3,000
Statement of Profit & Loss:1,200
Depreciation on fixed assets:700
Gross Block:9,000
Current Liabilities:2,500
Preliminary Expenses:300
6% Preference Share Capital:5,000
Cash & Cash Equivalents:6,100

The solution to this question is as follows:

Extract of Balance Sheet as on March 31, 2017

ParticularsNote No.Amount (₹)
I. Equity and Liabilities
1. Shareholders’ Funds
a. Share Capital15,000
b. Reserves and Surplus24,200
2. Non-Current Liabilities
      a. Long-term Borrowings33,000
3. Current Liabilities2,500
Total14,700
II. Assets
1Non-Current Assets
     a. Fixed Assets
         i. Tangible Assets48,300
2. Current Assets
     a. Cash and Cash Equivalents56,100
     b. Other Current Assets6300
Total14,700

Notes to Accounts

ParticularsAmount(₹)
1. Share Capital
6% Preference Share Capital5,000
2. Reserve and Surplus
General Reserve3,000
Statement of Profit or Loss1,200
4,200
3. Long-Term Borrowings
10% Debentures3,000
4. Tangible Assets
Fixed Assets9,000
Less: Depreciation700
8,300
5. Cash and Cash Equivalents
Cash6,100
6. Other Current Assets
Preliminary Expenses300

Concepts covered in this chapter –

  • Meaning of financial statements
  • Nature of financial statements
  • Objectives of financial statements
  • Types of financial statements
  • Limitations of financial statements

FAQ:

1. State the meaning of financial statements?

Financial statements are the end products of an accounting process, it provides a true picture of the performance of the company over a time period and such a statement is used by different users of accounting information. These statements are prepared annually

2. What is Amortisation?

Amortisation refers to the writing of sunk cost, deferred revenue expenses and intangible assets which need not be replaced.

3. What are Intangible assets? Give an Example.

Assets that do not have physical forms are known as intangible assets. It includes patents Goodwill, trademarks, etc.

ಇತರೆ ವಿಷಯಗಳು:

2nd Puc All Subject Notes 

1 ರಿಂದ 12ನೇ ತರಗತಿ ಎಲ್ಲಾ ಪಠ್ಯಪುಸ್ತಕಗಳ Pdf

1 ರಿಂದ 9ನೇ ತರಗತಿ ಕಲಿಕಾ ಚೇತರಿಕೆ 

1 ರಿಂದ 12 ನೇ ತರಗತಿ ಎಲ್ಲಾ ನೋಟ್ಸ್

All Notes App

Leave a Reply

Your email address will not be published. Required fields are marked *