Financial Statements Overview
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Questions and Answers

What is the net profit for the year ended 31st March, 2017 for the first company?

2,97,500

What is the Balance Sheet total for the first company as at 31st March, 2017?

42,72,500

What was the net profit for ABC Silver Ore Co. Ltd. as reported on 31st March, 2017?

69,390

What is the total Balance Sheet amount for ABC Silver Ore Co. Ltd. as at 31st March, 2017?

<p>5,89,140</p> Signup and view all the answers

What was the provision for taxation as per the calculations for the third company by 31st March, 2017?

<p>18,585</p> Signup and view all the answers

What is the net profit for the year ending 31st March, 2017 for the company requiring adjustments?

<p>34,515</p> Signup and view all the answers

What is the Balance Sheet total as reported for the third company on 31st March, 2017?

<p>2,09,800</p> Signup and view all the answers

What is the ending stock value on 31st March, 2017 for P.K. Limited?

<p>2,00,000</p> Signup and view all the answers

What is the amount of bad debts to provide for in the final accounts of P.K. Limited?

<p>4,000</p> Signup and view all the answers

Study Notes

Statement of Profit and Loss

  • The Statement of Profit and Loss is prepared to determine the net profit or loss of the company for the year.
  • It includes revenues and expenses, and the adjustments made at the end of the reporting period.
  • Adjustments may include depreciation, bad debts, accrued expenses, etc.

Balance Sheet

  • The Balance Sheet presents a snapshot of the company's financial position on a particular date.
  • It is made up of assets, liabilities, and equity.
  • Assets are what the company owns, and liabilities are what the company owes to others.
  • Equity represents the owners' stake in the company.

IV/1-36

  • Plant and Machinery: 15,00,000
  • Depreciation on Plant and Machinery: 10% of 15,00,000 = 1,50,000
  • Premises: 16,50,000
  • Furniture and Fixtures: 35,000
  • Sundry Debtors: 4,36,000
  • Provision for Bad Debts: 4,250
  • Stock on 31st March, 2017: 4,55,000
  • 6% Debentures: 15,00,000
  • Sundry Creditors: 2,90,000
  • Bills Payable: 1,67,500
  • Sales: 20,75,000
  • General Reserve: 1,25,000
  • Interim Dividend Paid: 1,87,500
  • Interest on Debentures: 6% of 15,00,000 x 6/12 = 45,000
  • Net Profit: 2,97,500
  • Balance Sheet Total: 42,72,500

ABC Silver Ore Co. Ltd.

  • Authorized Capital: 6,00,000 in shares of ₹10 each
  • Issued and Subscribed Shares: 52,000
  • Calls in Arrears: 100 shares
  • Plant: 40,000
  • Depreciation on Plant: 10% of 40,000 = 4,000
  • Mines: 2,20,000
  • Railway Track and Wagons: 17,000
  • Depreciation on Railway Track and Wagons: 10% of 17,000 = 1,700
  • Furniture and Buildings: 20,900
  • Depreciation on Furniture and Buildings: 5% of 20,900 = 1,045
  • Promotion Expenses: 6,000
  • Write Off Promotion Expenses: 6,000 / 3 = 2,000
  • Investments: 80,000
  • Brokerage on Investments: 1,000
  • 6% F.D. in Syndicate Bank: 89,000
  • Interest on F.D.: 3,900
  • Dividend on Investment: 3,200
  • Royalties Paid: 10,000
  • Wages of Miners: 74,220
  • Advertising: 5,000
  • Carriage on Plant: 1,800
  • Administrative Expenses: 28,000
  • Repairs to Factory Plant: 900
  • Coal and Oil: 6,500
  • Sale of Silver: 1,79,500
  • Value of Silver on March 31, 2017: 15,000
  • Forfeited Shares: 100
  • Amount Paid on Forfeited Shares: ₹7.50 per share
  • Net Profit: 69,390
  • Balance Sheet Total: 5,89,140

Zee Ltd.

  • Stock on 1-4-2016: 75,000
  • Purchases: 2,45,000
  • Wages: 30,000
  • Carriage: 950
  • Furniture: 17,000
  • Salaries: 7,500
  • Rent: 4,000
  • Sundry Trade Expenses: 16,950
  • Debtors: 27,500
  • Plant and Machinery: 29,000
  • Cash at Bank: 45,300
  • Patents: 4,800
  • Bills Receivable: 5,000
  • Sales: 3,40,000
  • Purchase Returns: 10,000
  • Discount Received: 3,000
  • Surplus A/c: 15,000
  • Share Capital: 1,00,000
  • Creditors: 17,500
  • General Reserve: 15,500
  • Bills Payable: 7,000
  • Stock on 31-3-2017: 88,000
  • Depreciation on Plant and Machinery: 15% of 29,000= 4,350
  • Depreciation on Furniture: 10% of 17,000 = 1,700
  • Depreciation on Patents: 5% of 4,800 = 240
  • Outstanding Rent: 800
  • Outstanding Salaries: 900
  • Provision for Doubtful Debts: 510
  • Dividend: 15%
  • Provision for Taxation: 35% income tax and 17% corporate dividend tax
  • Net Profit: 34,515
  • Balance Sheet Total: 2,09,800

P.K. Limited

  • Opening Stock: 1,50,000
  • Purchases: 3,80,000
  • Wages: 60,000
  • Carriages: 2,000
  • Furniture: 25,000
  • Salaries: 12,000
  • Rent: 15,000
  • Trade Expenses: 11,000
  • Sundry Debtors: 54,000
  • Plant and Machinery: 12,00,000
  • Cash at Bank: 21,500
  • Patents: 9,000
  • Bills Receivable: 14,000
  • Bad Debts: 6,500
  • Discount Allowed: 8,000
  • Equity Share Capital: 5,00,000
  • Purchase Return: 10,000
  • Sales: 11,50,000
  • Discount: 6,300
  • Surplus Account: 33,700
  • Sundry Creditors: 82,000
  • General Reserve: 13,000
  • Bills Payable: 1,70,000
  • Provision for Doubtful Debts: 3,000
  • Stock on 31st March, 2017: 2,00,000
  • Depreciation on Plant and Machinery: 12 % of 12,00,000 = 1,44,000
  • Depreciation on Furniture: 10% of 25,000 = 2,500
  • Depreciation on Patents: 20% of 9,000 = 1,800
  • Bad Debts: 4,000
  • Provision for Bad Debts: 5% of 54,000 = 2,700
  • Income Tax: 35%
  • Corporate Dividend Tax: 17%
  • Dividend: 15%
  • Closing Stock
  • Cost of Good Sold

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Description

This quiz covers key concepts related to the Statement of Profit and Loss and the Balance Sheet. You will explore how these financial statements are prepared and their significance in assessing a company's financial health. Test your understanding of the components, adjustments, and the overall financial position reflected in these documents.

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