IBS Mumbai - Accounting for Managers Company Final Accounts

COMPANY FINAL ACCCOUNTS

Introduction:
There is no legal obligation for sole proprietorship and a partnership firm to prepare final accounts, but companies have
statutory obligations to keep proper books of accounts and to prepare its final accounts every year in the manner as prescribed
in the Companies Act. Chapter IX, Sections 128 to 138 of the Companies Act, 2013 deals with the legal provisions relating to the
Accounts of Companies. These sections including Schedule II and III were brought into force from 1st April 2014. The relevant
rules pertaining to these provisions have also been notified. All these relevant provisions/schedules and rules are applicable for
the financial years commencing on or after 1st April 2014.

Schedule III of The Companies Act, 2013:

According to Section 129 of the Companies Act, 2013, all the companies registered under this Act will have to present its
financial statements in Schedule III of the Act. The Schedule III of the Companies Act, 2013 has been formulated to keep pace
with the changes in the economic philosophy leading to privatization and globalization and consequent desired changes/reforms
in the corporate financial reporting practices. It deals with the Form of Balance Sheet, Statement of Profit and Loss, and
disclosures to be made therein, and it applies uniformly to all the companies registered under the Companies Act, 2013, for the
preparation of financial statements of an accounting year.

Presentation of Balance Sheet

A Balance Sheet is a statement of the financial position of an enterprise as at a given date, which exhibits its assets, liabilities,
capital, reserves and other account balances at their respective book values.

IBS-Mumbai Page1
IBS Mumbai - Accounting for Managers Company Final Accounts

Part-I – Form of Balance Sheet

Name of the Company: .............................................................
Balance Sheet as at: ..................................................................
Particulars Note No. Figure as at the end of Figures as at the end
Current Reporting of the Previous
Period (Rs.) Reporting Period (Rs.)
I. EQUITY AND LIABILITIES
(1) Shareholders’ Funds
(a) Share Capital
(b) Reserves & 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 (DTL) (Net)
(c) Other Long-Term Liabilities
(d) Long-Term Provisions

IBS-Mumbai Page2
IBS Mumbai - Accounting for Managers Company Final Accounts
(4) Current Liabilities
(a) Short-Term Borrowings
(b) Trade Payables
(c) Other Current Liabilities
(d) Short-Term Provisions
Total
II. ASSETS
(1) Non-Current Assets
(a) Fixed Assets
(i) Tangible Assets
(ii) Intangible Assets
(iii) Capital WIP
(iv) Intangible Assets under Development
(b) Non-Current Investments
(c) Deferred Tax Assets (DTA) (Net)
(d) Long-Term Loans & Advances
(e) Other Non-Current Assets
(2) Current Assets
(a) Current Investments
(b) Inventories
(c) Trade Receivables
(d) Cash & Cash Equivalents
(e) Short-Term Loans & Advances
(f) Other Current Assets
Total

DISCLOSURE REQUIREMENTS:
(A) For “EQUITY AND LIABILITIES” Items
Sch. III Disclosure Requirement Points to be considered
(1) Shareholders’ Funds
(a) Share Capital
For each Class of Share Capital (different classes of Preference Shares to be treated separately):
(a) Authorized Capital It is the maximum number and face/par value, of each class of
shares that a corporate entity may issue in accordance with its
instrument of incorporation.
(b) Number of Shares Issued, Subscribed and Fully • Subscribed Share Capital” is “that portion of the Issued Share
Paid, and Subscribed but not Fully Paid Capital which has actually been subscribed by the public and
subsequently allotted to the shareholders by the entity. This also
includes any Bonus shares issued to the Shareholders.
• “Paid-up Share Capital” is “that part of the Subscribed Share
Capital for which consideration is cash or otherwise has been
received. This also includes Bonus Shares allotted and Shares issued
otherwise than for cash against purchase consideration, by the
corporate entity.”
• If Shares are not fully called, then disclose the called-up value per
share.
(c) Rights, Preferences and Restrictions attaching to • For Preference Shares, the rights include dividend and/or capital
shares including restrictions on the distribution of related rights. Further, Preference Shares can be cumulative, non-
Dividends and the Repayment of Capital cumulative, redeemable, convertible, non-convertible, etc.
(d) Shares held in the Company held by its Holding • Disclose number of Shares held by the entire chain of Subsidiaries
Company or its ultimate Holding Company including and Associates starting from the Holding Company and ending right
Shares held by Subsidiaries or Associates of the up to the Ultimate Holding Company.
Holding Company or the ultimate Holding Company in • All such disclosures should be made separately representing for
aggregate each class of Shares, (for both Equity and Preference Shares).
(e) List of Shareholders holding more than 5% shares • Date for computing the 5% limit should be taken as the Balance
as on the Balance Sheet Date Sheet date. So, if during the year, any Shareholder held more than
IBS-Mumbai Page3
IBS Mumbai - Accounting for Managers Company Final Accounts
5% Equity Shares but does not hold as much at the Balance Sheet
date, disclosure is not required.

(1) (b) Reserves & Surplus

(h) Surplus, i.e., balance in Statement of P&L disclosing Appropriations to the Profit for the year (including carried forward
allocations & appropriations, such as, Dividend, Bonus balance) is to be presented under the main head ‘Reserves and
Shares and Transfer to/from Reserves, etc. Surplus’. Under Sch III, the Statement of P&L will no longer reflect
(Additions & Deductions since last Balance Sheet to be any appropriations, like Dividends transferred to Reserves, Bonus
shown under each of specified heads) Shares, etc.
Profit and Loss Account (Dr.): Debit Balance Statement of P&L shall be shown as a Negative Figure under the head ‘Surplus’.
Similar, the balance of ‘Reserves & Surplus’, after adjusting Negative balance of Surplus, if any, shall be shown under the head
‘Reserves & Surplus’ even if the resulting figure is in the negative.
(1) (c) Money Received Against Share Warrants
In case of Listed Companies, Share Warrants are issued to Promoters & others in terms of the Guidelines for Preferential
Issues, viz. SEBI (Issue of Capital and Disclosure Requirements), Guidelines, 2009. Effectively, Share Warrants are amounts
which would ultimately form a part of the Shareholder’s Funds. Since Shares are yet to be allotted against the same, these are
not reflected as a part of Share Capital, but as a separate line-item.
(2) Share Application Money Pending Allotment
Share Application Money not exceeding the Issued Capital and to the extent not refundable is to be disclosed as a separate
line item after “Share Holders Funds” and before “Non-Current Liabilities”. If the Company’s Issued Capital is more than the
Authorized Capital, and approval of increase in Authorized Capital is pending, the amount of Share Application Money
received over and above the Authorized Capital should be shown under the head “Other Current Liabilities”.
(3) Non-Current Liabilities
(3) (a) Long-Term Borrowings
Long-Term Borrowings shall be classified as – --
(a) Bonds/Debentures,
(b) Terms Loans – (i) from Banks, and (ii) from Other Loans with repayment period beyond 36 months are usually known
Parties, as “Term Loans”. So, Cash Credit, Overdraft and Call Money
Accounts/ Deposits are not covered by the expression “Term Loans”.
(c) Deferred Payment Liabilities, Deferred Payment Liabilities would include any Liability for which
payment is to be made on deferred credit terms, e.g., Deferred Sales
Tax Liability, Deferred Payment for Acquisition of fixed Assets, etc.
(d) Deposits, Deposits classified under Borrowings would include Deposits
accepted from Public and Inter-Corporate Deposits which are in the
nature of Borrowings.
(e) Loans & Advances from Related Parties, Loans and Advances from related parties are required to be
disclosed. Advances under this head should include those Advances
which are in the nature of loans.
(f) Long-Term Maturities of Finance Lease Obligations, --
(g) Other Loans & Advances (specify nature) --
Note: Borrowings shall further be sub-classified as Secured and Unsecured. Nature of Security shall be specified separately in
each case.
(3) (b) Deferred Tax Liabilities (As per Accounting Standard-22)
(3) (c) Other Long-Term Liabilities
It shall be classified as – Sundry Creditors for Goods or Services, and Acceptances should be
(a) Trade Payables disclosed as part of Trade Payables. Disclosure Requirements under
MICRO, SMALL & MEDIUM ENTERPRISES DEVELOPMENT (MSMED)
Act will also be required to be made in the annual Financial
Statements.
(b) Others Amounts due under contractual obligations, e.g., payables in respect
of statutory obligations, like contribution to Provident Fund,
Purchase of Fixed Assets, Contractually Reimbursable Expenses,
Interest Accrued on Trade Payables, etc., should be classified as
“Others” and each such item should be disclosed nature wise.
(3) (d) Long-Term Provisions
It shall be classified as – This should be classified into short-term and long-term portions, and
(a) Provision for Employee Benefits the latter amount should be included here.

IBS-Mumbai Page4
IBS Mumbai - Accounting for Managers Company Final Accounts
(b) Others (Specifying nature) --
(4) Current Liabilities
(4) (a) Short-Term Borrowings
1. Short-Term Borrowings shall be classified as – • Short-Term Borrowings will include all Loans within a period of 12
• Loans Repayable on demand– (i) from Banks, & (ii) months from the date of the loan, Loans payable on demand, etc.,
Other Parties, but they will not include Current Maturity of Long-Term Borrowings
• Loans and Advances from Related Parties, (which should be treated only as “Other Current Liabilities”).
• Deposits,
• Other Loans and Advances (specify nature)
Security wise Classification: Borrowings shall further be sub-classified as Secured and Unsecured. Nature of security shall be
specified separately in each case
(4) (b) Trade Payables
It shall be classified as –  Liability for Capital Goods Purchases: Amount due towards
(A) Total outstanding dues of micro enterprises and purchase of capital goods to be disclosed under “Other Current
small enterprises; and Liabilities” with a suitable description.
(B) Total outstanding dues of creditors other than
micro enterprises and small enterprises.”
(4) (c) Other Current Liabilities
It shall be classified as –
(a) Current maturities of Long-Term Debt, • The portion of Long-Term Debts/ Lease Obligations, which is due
(b) Current Maturities of Finance Lease Obligations, for payments within 12 months of the reporting date is required to
(c) Interest Accrued but not due on Borrowings, be classified under “Other Current Liabilities”, while the balance
(d) Interest Accrued and due on Borrowings, amount should be classified under Long-Term Borrowings.
(e) Income Received in Advance, • Trade Deposits and Security Deposits which are not in the nature of
(f) Unpaid Dividends, Borrowings should be classified separately under Other Non-
(g) Application Money received for allotment of Current/ Current Liabilities.
Securities and due for Refund and Interest Accrued • Other Payables under this head may be in the nature of statutory
thereon dues such as Withholding Taxes, Service Tax, VAT, Excise Duty, etc.
(h) Unpaid Matured Deposits and Interest Accrued
thereon,
(i) Unpaid Matured Debentures and Interest Accrued
thereon,
(j) Other Payables (specify nature).
(4) (d) Short Term Provisions
It shall be classified as – (a) Provision for Employee This should be classified into short-term and long-term portions, and
Benefits the former amount should be included here.
(b) Others (Specifying nature) This includes Provision for Dividend, Provision for Taxation, Provision
for Warranties, etc.

(B) For “ASSETS” Items

Sch. III Disclosure Requirement Points to be considered
(1) Non-Current Assets
(1) (a) (i) Tangible Assets (As per AS – 6, 10)
1. Classification shall be given as – Reconciliation: A Reconciliation of the Gross and Net Carrying
(a) Land, (b) Buildings, (c) Plant and Equipment, (d) Amounts of each Class of Assets at the Beginning and End of the
Furniture & Fixtures, (e) Vehicles, (f) Office Reporting period showing Additions, Disposals, Acquisitions through
Equipment, (g) Others (Specify Nature). Business Combinations and other Adjustments and the related
Depreciation and Impairment Losses / Reversals shall be disclosed
separately.
(1) (a)(ii) Intangible Assets
Classification shall be given as –
(a) Goodwill, (b) Brands / Trademarks, (c) Computer Software, (d) Mastheads and Publishing Titles, (e) Mining Rights, (f)
Copyrights, and Patents and Other Intellectual Property Rights, Services and Operating Rights, (g) Recipes, Formula, Models,
Designs and Prototypes, (h) Licenses and Franchise, (i) Others (specify nature).
(1) (b) Non-Current Investments
Non-Current Investments shall be classified as Trade • If a Debenture is to be redeemed partly within 12 months and
Investments and Other Investments, and further balance again after 12 months, the amount to be redeemed within
classified as Investments in – 12 months should be disclosed as current, and balance as Non-
(a) Property, Current.

IBS-Mumbai Page5
IBS Mumbai - Accounting for Managers Company Final Accounts
(b) Equity Instruments, • “Trade Investment” is normally understood as an Investment made
(c) Preference Shares, by a Company in Shares or Debentures of another Company, to
(d) Government / Trust Securities, promote the trade or business of the first Company
(e) Debentures or Bonds,
(f) Mutual Funds,
(g) Partnership Firms, and
(h) Other Non-Current Investments (specify nature).
(1) (c) Deferred Tax Asset (As per Accounting Standard – 22)
(1) (d) Long Term Loans and Advances
1. General Classification: Long-Term Loans and Capital Advances:
Advances shall be classified as – • It should be specifically included under Long-Term Loans and
(a) Capital Advances, Advances and hence, cannot be included under Capital Work-In-
(b) Security Deposits, Progress.
(c) Loans and Advances to Related Parties (giving • Capital Advances are advances given for procurement of Fixed
details thereof), Assets which are Non-Current Assets. They are not realized back in
(d) Other Loans and Advances (specify nature) cash, and over a period, get converted into Fixed Assets. Assets.
2. Security wise Classification: The above shall be Hence, they are always Long-Term Advances, irrespective of when
separately sub-classified as – the Fixed Assets are expected to be received.
(a) Secured, considered Good Other Loans and Advances should include all other items in the
(b) Unsecured, considered Good nature of advances recoverable in cash or kind, e.g., Prepaid
(c) Doubtful. Expenses, Advance Tax, CENVAT Credit Receivable, VAT Credit
3. Directors, etc.: Loans and Advances due by Receivable and Service Tax Credit Receivable which are not expected
Directors or Other Officers of the Company or any of to be realized within the next 12 months or operating cycle
them either severally or jointly with any other whichever is longer, from the Balance Sheet date.
persons or amounts due by Firms or Private
Companies respectively in which any Director is a
Partner in a Director of a Member should be
separately stated.
(1) (e) Other Non-Current Assets
1. Other Non-Current Assets shall be classified as – • A Receivable shall be classified as ‘Trade Receivable’ if it is in
(a) Long-term Trade Receivables (including Trade respect of the amount due on account of goods sold or services
Receivables on Deferred Credit Terms) rendered in the normal course of business.
(b) Others (specify nature)
(2) Current Assets
(2) (a) Current Investments
Current Investments shall be classified as – Principles given for Non-current Investments will also apply here.
(a) Investments in Equity Instruments, However, Trade vs Non-Trade Classification, is not required for
(b) Investment in Preference Shares, Current Investments.
(c) Investments in Government or Trust Securities,
(d) Investments in Debentures or Bonds,
(e) Investments in Mutual Funds,
(f) Investments in Partnership Firms,
(g) Other Investments (specify nature).
(2) (b) Inventories
Inventories shall be classified as –
(a) Raw materials,
(b) Work in Progress,
(c) Finished Goods,
(d) Stock-in-Trade (in respect of goods acquired for Trading),
(e) Stores and Spares,
(f) Loose Tools,
(g) Others (specify nature)
Note: Goods-in-Transit shall be disclosed under the relevant subhead of Inventories. Mode of Valuation shall be stated.
(2) (c) Trade Receivables
1. Aggregate amount of Trade Receivables Sch III requires separate disclosure of “Trade Receivables O/s for a
outstanding for a period exceeding 6 months from period exceeding 6 months from the date they become due for
the date they are due for payment should be payment”, only for the current portion of Trade Receivables.
separately stated.
2. Security wise Details: Trade Receivables shall be

IBS-Mumbai Page6
IBS Mumbai - Accounting for Managers Company Final Accounts
separately subclassified as –
(a) Secured, considered Good
(b) Unsecured, considered Good
(c) Doubtful.
3. Directors, etc: Debts due by Directors or Other
Officers of the Company or any of them either
severally or jointly with any other person or debts
due by Firms or Private Companies, respectively in
which any Director is a Partner, or a Director, or a
Member should be separately stated.
(2) (d) Cash and Cash Equivalents
Cash and Cash Equivalents shall be classified as –
(a) Balances with Banks,
(b) Cheques, Drafts on Hand,
(c) Cash on Hand,
(d) Other (Specify nature).
(2) (e) Short Term Loans and Advances
1. General Classification: Short-Term Loans and Advances shall be classified as –
(a) Loans and Advances to Related Parties (giving details thereof),
(b) Others (specify nature).
2. Security wise Classification: The above shall also be sub classified as-
(a) Secured, considered Good,
(b) Unsecured, considered Good,
(c) Doubtful
3. Directors, etc.: Loans & Advances due by Directors or Other Officers of the Company or any of them either severally or
Jointly with any other person or amounts due by Firms or Private Companies, respectively in which any Director is a Partner
or a Director or a Member shall be separately stated.
(f) Other Current Assets
This is an all-inclusive heading, which incorporates Current Assets which do not fit into any other Asset Categories.

Special Point: Unamortized portion of share issue expenses, etc.

Schedule III does not deal with any accounting treatment of these items, and the same continues to be governed by the
respective AS / best practices. So, a Company can disclose the Unamortized Portion of such expenses as “Unamortized
Expenses”, under the head “Other Current/ Non-Current Assets”, depending on whether the amount will be amortized in the
next 12 months or thereafter

Part II-Form of Statement of Profit And Loss

Name of the Company :……………………………………………
Profit and Loss Statement for the year ended:………………………………….. (Rs. in …….)
Particulars Note No. Figure as at the end of Figures as at the end
Current Reporting of the Previous
Period (Rs.) Reporting Period (Rs.)
I. Revenue from Operations
II. Other Income
III. Total Revenue (I+II)
IV Expenses:
Cost of Materials Consumed
Purchases of Stock-In-Trade
Changes in Inventories of Finished Goods / Work-in-
progress and Stock-In-Trade
Employee Benefits Expense
Finance Costs
Depreciation and Amortization Expense
Other Expenses
Total Expenses
V Profit before Exceptional & Extraordinary Items and

IBS-Mumbai Page7
IBS Mumbai - Accounting for Managers Company Final Accounts
Tax (III – IV)
VI Exceptional Items
VII Profit before Extraordinary Items and IAX (V-VI)
VIII Extraordinary Items
IX Profit before Tax (VII-VIII)
X Tax Expenses:
(1) Current Tax
(2) Deferred Tax
XI Profit /(Loss) for the period from Continuing
Operations (IX – X)
XII Profit /(Loss) from Discontinuing Operations
XIII Tax Expense of Discontinuing Operations
XIV Profit /(Loss) from Discontinuing Operations (After
Tax) (XII-XIII)
XV Profit / (Loss) for the period (XI + XIV)
XVI Earnings per Equity Share:
(1) Basic
(2) Diluted

General Instructions for Preparation of Statement of Profit and Loss:

Item Description
Revenue from Operations For companies other than a Finance Company
Revenue from
(a) Sale of Products
(b) Sale of Services
(c) Other Operating Revenues
(d) Less: Excise Duty
For a Finance Company
(a) Interest
(b) Other Financial Services Revenue
Finance Costs Finance Costs shall be classified as –
(a) Interest Expenses,
(b) Other Borrowing Costs,
(c) Applicable Net Gain / Loss on Foreign Currency Transactions and
Translation.
Other Income Other Income shall be classified as –
(a) Interest Income (in case of a Company other than a Finance Company),
(b) Dividend Income,
(c) Net Gain/Loss on Sale of Investments,
(d) Other Non-Operating Income (Net of Expenses directly attributable to
such income).
Employee Benefits Expense (i) Salaries & Wages, (ii) Contribution to PF and Other Funds, (iii) Expense on
ESOP and Employee Stock Purchase Plan (ESPP), (iv) Staff Welfare Expenses

IBS-Mumbai Page8
IBS Mumbai - Accounting for Managers Company Final Accounts

Practice Problems
1. The authorized share capital of the company is Rs.10,00,000 divided into 8%-5,000 preference shares of Rs. 100 each. And
50,000 equity shares at Rs. 10 each. 50% of each class of shares were issued to the public fully called up. Rs. 20 per share on
100-8% preference shares and Rs. 2 per share on 2,000 equity shares were not received.
Show the note on share capital forming a part of balance sheet.

2. Following is Trial Balance of Deva Ltd as on 31.03.2020.

Debit balances Rs. Credit balances Rs.
Fixed Assets (Net Block) 7,50,000 Equity share Capital (Rs 10 each fully paid) 4,40,000
Investments 2,50,000 9% Pref. shares Capital (Rs 100 each fully paid) 1,00,000
Closing stock 3,75,000 Profit and Loss A/c 2,80,000
Debtors 1,22,500 Securities Premium 30,000
Staff Advance 1,00,000 Debentures Redemption Reserve 2,00,000
Prepaid Expenses 45,000 General Reserve 75,000
Advance to Suppliers 27,500 8% Debentures 5,25,000
Cash in hand 12,500 Creditors 58,500
Bank balance 1,10,000 Bills Payable 21,500
Provision for Taxation 62,500

TOTAL 17,92,500 TOTAL 17,92,500

Additional information:
1) Entire Authorized share capital has been issued and subscribed
2) Of the debtor’s, debts due for more than six months is Rs 22,500. All debts are unsecured and considered to be good.
3) Ignore previous year's figure
After considering the above adjustments, prepare Balance sheet of the company as on 31.3.2020 as per schedule III
requirements.

3. The following is the Trial Balance of Saket Ltd. as on 31.03.2020.

Debit balances Rs. Credit balances Rs.
Land at cost 2,20,000 Equity Capital (shares of Rs. 10 each) 3,00,000
Plant & Machinery 6,08,000 10% Debentures 2,00,000
Trade Receivables 1,00,000 General Reserve 1,30,000
Opening Stock 86,000 Profit & Loss A/c 72,000
Bank 20,000 Securities Premium 40,000
Purchases 3,20,000 Sales 7,00,000
Factory Expenses 60,000 Trade Payable 52,000
Administration Expenses 30,000
Selling Expenses 30,000
Debenture Interest 20,000

TOTAL 14,94,000 TOTAL 14,94,000

Additional information:
1) The Authorized share capital of the company is 40,000 shares of RS. 10 each.
2) Depreciation is to be provided on Plant & Machinery at 10%.
3) Outstanding Selling Expenses are Rs. 1,500 and Prepaid Factory Expenses are Rs. 2,000.
4) Transfer to General Reserve Rs.70,000.

IBS-Mumbai Page9
IBS Mumbai - Accounting for Managers Company Final Accounts
5) Stock as on 31/03/2020 was Rs. 1,05,000.
You are required to prepare Saket Ltd.’s Balance Sheet as on 31.03.2020 and statement of Profit & Loss for the year ended
31.03.2020. Ignore previous year's figures and taxation.

4. The following is the trial balance of Onida Ltd. as on 31.03.2020.

Particulars Dr. Rs. Particulars Cr. Rs.
Land at cost 1,10,000 Equity Capital (Share of Rs. 10 each) 1,50,000
Plant & Machinery (cost Rs. 3,85,000) 2,99,000 10% Debentures (Secured against Plant & 1,00,000
Machinery)
Debtors 46,000 General Reserve 66,000
Stock at cost (01.04.2019) 52,000 Profit & Loss A/c 35,000
Bank 15,000 Securities Premium 20,000
Material consumed 1,50,000 Sales 3,50,000
Other Expenses 60,000 Creditors 25,000
Salary 15,000 TDS payable 13,000
Debenture Interest 10,000 RDD 2000
Bad Debts 4000
TOTAL 7,61,000 TOTAL 7,61,000
Additional information:
a) The authorized share capital of the company is 30,000 shares of Rs. 10 each.
b) Depreciation is to be provided on Plant and Machinery @ 10% on cost.
c) Debtors include Rs 6,000 outstanding for more than 6 months.
d) Transfer to General Reserve Rs.50,000.
e) Directors recommended 10% dividend.
f) Further Bad debts are Rs. 1,500 and provide for RDD @ 5%
g) Closing Stock as on 31-3-2020 is Rs.52000.
Prepare: Profit and Loss Statement for the year ended 31-3-20 and the Balance Sheet of Onida Ltd. as on that date as per the
provisions of the Company’s Act taking into consideration the above-mentioned adjustments. Ignore previous year figures.

5. Sun Co. Ltd. is a registered company with an authorized share capital of Rs 70,000 divided into 7,000 equity shares of Rs. 10
each. Company’s Trial Balance as on 31-03-20 was as under:
Dr. Balances Rs Cr. Balances Rs
Building (cost Rs 50,000) 40,000 Share capital:
5000 equity shares of Rs 10 each 50,000
Furniture (cost Rs 5,000) 4,000 6% debentures of Rs 100 each 10,000
Vehicles (cost Rs 10,000) 6,500 Creditors 12,500
Equity shares of companies (Market 20,000 Bills payable 4,000
value Rs 22,000)
Stock as on 1-4-2019 20,000 General Reserves 5,000
Debtors 17,000 Profit and Loss Account 2,000
Cash in bank 8,750 Sales 49,000
Salaries 10,000 Dividend income 700
Directors sitting fees 800
Audit fees 650
Debenture interest 500
Purchases 5000
TOTAL 1,33,200 TOTAL 1,28,200
Adjustments:
1) Provide 10% depreciation p.a. on cost of fixed assets.
2) Dividend is proposed for the year @ 10%

IBS-Mumbai Page10
IBS Mumbai - Accounting for Managers Company Final Accounts
3) Sundry debtors include debts which are due for more than 6 months Rs 4,000.
4) Stock as on 31-3-2020 Rs.30000.
5) Create 5% provision for doubtful debts.
6) Provide for Income Tax @ 50%
Prepare Profit and Loss statement for the year ended 31-03-20 and balance sheet as per the provisions of the Companies Act
taking into a consideration the above-mentioned adjustments.

IBS-Mumbai Page11