Final Accounts of Joint Stock Companies

Under the Companies Act, the Profit and Loss account of a company shall be
prepared in compliance with the requirements of Part II of Schedule VI and the Balance
Sheet of a company shall be prepared in compliance with the form and contents
prescribed in Part I of the said Schedule or as near thereto as circumstances admit or such
other form as may be permitted by the Central o!t" either #enerally or in any particular
case"
$he followin# is an illustrati!e Profit and Loss Account%&'ori(ontal)
****************** Co" Ltd",
Profit and Loss Account for the year ended----------
+r" Cr"
Particulars ,s" Particulars ,s"
$o -penin# stoc. By Sales
$o Purchases By Closin# stoc.
$o /a#es
$o 0uel e1penses
$o Carria#e e1penses
$o -ther factory e1penses
$o ross profit c2d
By ross Profit b2d ********
$o Salaries &administrati!e) ********* -ther Income
$o -ffice rent, rates and ta1es ******** By +iscount recei!ed ********
$o Printin# 3 stationery ******** By Commission recei!ed ********
$o $elephone char#es ********
$o Posta#e and tele#rams ******** By interest earned ********
$o Insurance ******** By ,ent of property let*out ********
$o Audit fees ******** By +i!idend from shares ********
$o Le#al char#es ********
******** By profit on sale of machinery*******
By Profit on sale of in!estments*****
$o +epreciation on4
-ffice equipment *******
-ffice furniture *******
-ffice buildin# *******
Selling and distribution expenses4
$o Salaries &sellin# staff) *******
$o Ad!ertisement *******
$o odown rent *******
$o Carria#e outwards *******
$o Bad debts *******
$o pro!ision for bad debts *******
$o Sellin# commission *******
Financial expenses:
$o ban. char#es *******
$o Interest on loans *******
Abnormal losses4
$o Loss on sale of machinery *******
$o loss on sale of in!estment *******
$o loss by fire *******
$o $a1 pro!ision ******
$o 5et profit after ta1 for the year *******
Part I of Schedule VI to the Companies Act, prescribes two alternati!e forms of Balance
Sheet *** hori(ontal and !ertical"
Horizontal Form (simplified)
----------------- Co Ltd!
"ALA#C$ SH$$% AS A%----
Liabilitues Amount Assets Amount
Share capital 0i1ed assets
,eser!es 3 Surplus In!estments
Secured loans Current assets 3
Unsecured loans Loans and ad!ances
Current liabilities 3 6iscellaneous e1penditure
Pro!isions +ebit balance of P3 L a2c
*********** ************
*********** *************
&ertical form
----------------- Co Ltd!
"ALA#C$ SH$$% AS A%----
Schedule Amount
5o"
&7) &8) &9)
7" Sources of 0unds4 *** ****
7) Shareholders funds4
a) Capital ** **
b) ,eser!es and Surplus ** **
8) Loan 0unds4
a) Secured loans ** **
b) Unsecured loans ** **
$-$AL
II" Application of 0unds4
7) 0i1ed Assets4
a) ross bloc. ** **
b) Less +epreciation ** **
c) 5et bloc. ** **
d) Capital wor.*in*pro#ress ** **
8) In!estments ** **
9) Current assets, loans and
ad!ances4
a) In!entories ** **
b) Sundry +ebtors ** **
c) Cash and Ban. balances ** **
d) -ther current assets ** **
e) Loans and Ad!ances ** **
Less4 Current liabilities an
Pro!isions ** **
a) Liabilities ** **
b) Pro!isions ** **
5et Current Assets4
9) &a) 6iscellaneous e1penditure
to the e1tent not written*
off or ad:usted ** **
&b) Profit and Loss Account ** **
$-$AL
' Company Ltd
Profit and Loss Account for the year ended----------
,s" ,s"
,s"
Sales4
Cash
Credit
Less4 ,eturns
5et Sales
Less4 Cost of #oods sold
ross profit
Less4 -peratin# e1penses
eneral and administrati!e e1penses
Sellin# e1penses
5et operatin# profit
Add4 5on*operatin# Incomes4
Less4 5on*operatin# e1penses
5et profit before interest and ta1
Less4 Interest on debentures
Less4 Pro!ision for ta1ation
5et profit after ta1
P ( lL appropriation Account
,s" ,s
5et Profit b2d from pre!ious year
Add4 5et profit of Current year
Add4 ;1cess pro!ision for ta1 for pre!ious year written*bac.
Add4 /ithdrawal from ,eser!es
$otal
Less4 $ransfer to reser!es
Less4 Interim di!idend
Less4 Proposed di!idend
Less4 +i!idend ta1
Balance carried to B2S"
#)%$* At the foot of the Company B2S a list of contin#ent liabilities may be #i!en"
;#4 Arrears of di!idend on Cumulati!e Preference Shares
Bills discounted with Ban. and not due
Claims a#ainst the company2 disputed liabilities not ac.nowled#ed as debt"
+llustrati,e Financial Statements
Prosperous Ltd! "an-alore
P ( L A.C for the year ended /0/12 (3sin lakhs)
Income
Sales &ross) 7<=,===
&*) ;1cise duty >,===
5et Sales 799,===
-ther Income 9,===
Increase in Stoc. 7,===
79>,===
;1penditure
,aw materials consumed ?=,===
Stores consumed ?,===
Power 3 0uel 8,===
-ther mf#" char#es 7=,===
Salaries, wa#es 3 Bonus 8,===
Administration e1penses 8,@==
Sellin# 3 +istribution e1penses 9,@==
Interest 3 0inancin# e1penses 7,===
+epreciation @,===
77<,===
Profit before ta1 89,===
&*) $a1 pro!ision 9,@==
Profit after ta1 7A,@==
&B) Profit b2f from pre!ious year 9,===
88,@==
Appropriations4
eneral ,eser!e 7@,===
Proposed di!idend 3 ta1 on di!idend 9,===
Surplus carried to B2S <,@==
88,@==
"alance Sheet as at /0/12 (3s +n lakhs)
Sources of funds
7" ShareholderCs funds
&a) Share Capital 7=,===
&b) ,eser!es 3 Surplus >=,===
?=,===
8" Loan funds4
&a) Secured loans >,===
&b) Unsecured loans 9=,===
9>,===
%otal 77>,===
Application of funds4
7" 0i1ed Assets4
ross 78=,===
&*) +epreciation <=,===
5et ?=,===
8" In!estments 7A,===
9" Current Assets4
In!entories 7@,===
Sundry +ebtors D,===
Cash 3 Ban. Balances <,===
-thers @==
Loans 3 Ad!ances 7D,@==
<8,===
Less4 Current Liabilities4
Sundry Creditors 7@,===
Unpaid di!idends 7==
Interest accrued but not due
-n Bonus <==
Pro!isions ?,@==
8<,===
5et Current Assets 7?,===
%otal 77>,===