ANNA ADARSH COLLEGE FOR WOMEN

DEPARTMENT OF COMMERCE -SHIFT II

CORPORATE ACCOUNTING- II BCOM GENERAL

ASSIGNMENT ( BANK ACCOUNTS)

1.The following figures are extracted from the books of KLM Bank Ltd. as on 31-03-20X2:

Interest and discount received 38,00,160

Interest paid on deposits 22,95,360

Issued and subscribed capital 10,00,000

Salaries and allowances 2,50,000

Directors Fees and allowances 35,000

Rent and taxes paid 1,00,000

Postage and telegrams 65,340

Statutory reserve fund 8,00,000

Commission, exchange and brokerage 1,90,000

Rent received 72,000

Profit on sale of investment 2,25,800

Depreciation on assets 40,000

Statutory expenses 38,000

Preliminary expenses 30,000

Auditor's fee 12,000

The following further information is given:

(1) A customer to whom a sum of ` 10 lakhs was advanced has become insolvent and it is
expected only 55% can be recovered from his estate.

(2) There was also other debts for which a provisions of ` 2,00,000 was found necessary.

(3) Rebate on bill discounted on 31-03-20X1 was ` 15,000 and on 31-03-20X2 was ` 20,000.

(4) Income tax of ` 2,00,000 is to be provided.

The directors desire to declare 5% dividend and transfer 25% of its profit to the reserve fund

Prepare the Profit and Loss account of KLM Bank Ltd. for the year ended 31-03-20X2 and also
show, how the Profit and Loss account will appear in the Balance Sheet if the Profit and Loss
account opening balance was NIL as on 31-03-20X1

2.From the following balances of Mahindra Bank Ltd., as on 31st March 2015,prepare Profit and
Loss A/c for the year ended 31st march 2008 and Balance sheet as on that date.

Particulars Rs.

Equity share capital of Rs. 100 each

Rs. 50 paid up (Authorised and Issued 40,000 shares) 20,00,000

Profit and Loss A/c (Cr. on 1-4-2014) 8,00,000

Current Deposit A/c 68,20,000

Fixed Deposit A/c 78,00,000

Saving Bank A/c 51,30,000

Director’s fees 90,000

Audit fees 20,000

Furniture (Cost Rs. 20,00,000) 17,40,000

Interest and discount received 42,00,000

Commission and exchange 20,00,000

Reserve fund 7,00,000

Printing and Stationery 80,000

Salary (including Manager’s Rs. 4,00,000) 14,00,000

Building (Cost Rs. 60,00,000) 45,00,000

Cash in hand 3,20,000

Cash with RBI 70,00,000

Cash with Other Bank 65,00,000

Law charges 30,000

Investment at cost 24,00,000

Loans, cash credit and overdraft 60,00,000

Bills discounted and purchased 28,00,000

Interest paid 30,00,000

Borrowing from Laxmi Bank Ltd. 40,00,000

Branch Adjustment A/c(Cr.) 26,00,000

Rent and Taxes 1,70,000

Following additional information is available:

1) The Bank has accepted on behalf of the customers bills worth Rs. 30,00,000 against the
securities or Rs. 38,00,000 lodged with the Bank.

2) Rebate on bills discounted to Rs. 1,10,000

3) Provide depreciation on building by 10% and on furniture by 5% on cost.

4) Provide Rs. 30,000 for bad and doubtful debts.