4.

Final Accounts- Practical Questions

Q.1 The following balances were recorded in the books of “ABC” Co. Ltd. on 31st March, 2023:

Debit Balances Amount Credit Balances Amount

Calls- in –arrears(on Equity 10,000 7.5% Preference Share capital 1,00,000
shares)-
Opening Stock 33,300 Equity Share capital 2,00,000

Purchases 1,06,500 Share Forfeiture A/c 4500

Land & Building 1,70,000 Security Premium 16,500

Plant & Machinery 1,15,000 Capital Reserve 55,000

Preliminary Expenses 6000 General Reserve 90,000

Furniture 32,000 Provident Fund 13,000

Investments 1,65,700 5% debentures (Mortgage) 50,000

Loose-Tools 12,000 Sales 2,60,000

Debtors 66,000 Creditors 33,000

Productive Wages 35,200 P & L A/c 5500

Debenture Redemption Fund 20,000 Bank loan 25,400

Investments

Salaries 57,000 Public Deposit 14,600

Rent, rates & Taxes 20,000 Income from Investments 9500

Director’s Fees 3500 Debenture Redemption Fund 20,000

Postages & Telegrams 6500 Reserve for Bad debts 3000

Provident Fund Contribution 2500

Cash & Bank Balance 10,800

Income-Tax 28,000

9,00,000 9,00,000
You are required to prepare final accounts of the company as per Companies Act, 2013 for the year
ended on 31st March, 2023. After taking into account the following additional information:

1. The stock on 31-03-2023 was Rs.95,400.

2. Provide 5% reserve for Bad debts on Debtors.-
3. Prepaid rent amounted to Rs.2000.
4. Provide depreciation on plant & machinery at 2%, on furniture at 5% and on land & building
at 4.
 5. Outstanding expenses: Productive wages Rs.2500, Salaries-Rs.3000, and Rates & Taxes
Rs.1500.-
6. Transfer Rs.25,000 to general reserve.
7. The directors of the company recommended 7.5% dividend on preference share capital and
10% on equity share capital.
8. The authorised capital of the company amount to Rs.5,00,000.-
Q.2 The following is the trial balance of AMNS Ltd. as on 31-03-2023:

Debit Balances Amount Credit Balances Amount

Debenture Interest (Net) 28,584 Equity shares of Rs.10 each , 3,00,000
TDS at the rate of 20.60% Fully paid up
Sales Return 11,500 10% Preference share capital 2,50,000
Salary 1,28,000 12% Debentures 6,00,000
Wages 14,500 General Reserve 1,30,000
Director Fees 12,000 Creditors 1,10,000
Computers 1,50,000 Income Tax Provision(2021-22) 1,30,000
Furniture 60,000 P & L A/c(1-04-2022) 1,25,000
Land & Buildings 4,50,000 Interest received on investments 12,200
(Gross-Rs.16,000)
Plant & Machinery 3,40,000 Subsidy for purchase of goods 30,000
Motor Car (Purchased on 1-7-2022) 3,00,000 Public Deposit 45,000
Preliminary Expenses 10,000 Sales 14,78,000
Tata company share of Rs.10 each, 40,000 Subsidy for purchase of 30,000
Rs.8 paid up per share Computers
Sima co.’s debentures fully paid up 70,000 Bank overdraft 60,000
Debtors 1,53,000
Purchases 10,00,000
Opening Stock 1,00,000
Advance tax paid (2021-22) 1,30,000
Advance tax paid (2022-23) 1,00,000
Bills Receivables 15,200
Cash & Bank Balance 1,87,416
33,00,200 33,00,200
Additional Information:

1. Provide depreciation at 5% on Land & Building, 10% on furniture, 15% on Plant &
Machinery, 20% on Motor car and on computer at the rate of 20% p.a.
2. Sundry debtors include Rs.23,000 for more than 6 months. Provide Rs.5500 on debtors for
bad debts reserve.
3. The details of Closing stock: cost price- Rs.1,75,000, Required repair expenses-Rs.15,000 and
Market price-Rs.1,70,000
4. The management recommended dividend of 10% on equity share capital after transferring
Rs.15,000 to General Reserve.
5. The IT liability for the last year fixed at Rs.1,40,000. Provide Rs.1,00,000 for taxation and
corporate dividend tax at 20% of dividend.
6. Bank overdraft secured against stock.
From the above information prepare final accounts of company as per companies act, 2013.

Q.3 The following is the trial balance of AMRON Ltd. as at 31-03-2023:

Particulars Debit Balances Particulars Credit Balances

 Opening Stock 1,50,000 Equity Share Capital 5,00,000
P & L A/c –change in stock B/S- Note No.1
Purchases 3,82,000 Purchase Return 10,000
P & L A/c- Purchases P & L A/c- less from purchases
Wages- 60,000 Sales 11,50,000
P & L A/c-Note No.24 P & L A/c- Receipts from ope.
Furniture 25,000 Discount 6300
B/S- Note No.10 P & L A/c- Note No. 20
Salaries 12,000 Profit & Loss Account 1,70,000
P & L A/c- Note No.21 B/S R & S- Note No.2
Rent 15,000 Trade creditors 33,700
P & L A/c- Note No.24 B/s- Note No.7
Trade Expenses 11,000 General Reserve 82,000
P & L A/c- Note No.24 B/S R & S- Note No.2
Trade Debtors 54,000 Provision for doubtful debts 3000
B/S- Note No.16 P & L A/c- Note No.24
Plant & Machineries 12,00,000 Bills payable 13,000
B/S- Note No.10 B/s- Note No.7
Cash at bank 21,500
B/s- Note No.17
Computer Software 9000
B/S- Note No.10
Bills receivable 14,000
B/S- Note No.16
Bad debts 6500
P & L A/c- Note No.24
Discount allowed 8000
P & L A/c- Note No.24
Total 19,68,000 Total 19,68,000
Additional Information:

1. Closing stock on 31-03-2023 was amounted to Rs.2,00,000

P & L A/c- Change in stock, B/s –Note no.15
2. Depreciate plant & Machinery at 12%, Furniture at 10%, and computer software at 20%. P &
L A/c- Note No.23, B/S- Note No.10 (deducted from asset)
3. Further bad debts amounted to Rs.4000 and provide 5% on debtors for doubtful debts.
P & L A/c- Not No.24, B/s Note no.16
4. Provide for income-tax at 35% P & L A/c-Prov. Tax B/s – Note No.-9 and dividend distribution
tax at 20% of dividend. B/s- less from P & L balance in Note No.2, B/s Note No.9
5. The Board of Directors recommended a dividend of 25%. less from P & L balance in Note
No.2, B/s Note No.9
6. Equity share capital consists of 50,000 equity shares of Rs.10 each, fully paid. Authorised
capital
7. Transfer 10% of net profit to general reserve. less from P & L balance in Note No.2, B/s Note
No.2 add in balance of GR
Prepare Profit and Loss Account and Balance-sheet of the company as per Companies Act,2013
Schedule-III for the year ended on 31-03-2023.

Q.4 The following balances appeared in the books of Jai Bharat Ltd. as on 31-03-2023. (14)

Particulars Debit Particulars Credit

Balances Balances
 Building at cost 1,50,000 Equity Share Capital 6,00,000
Fully paid shares of Rs.10 each
Purchases 5,00,900 General Reserve 2,50,000
Salaries & Wages 3,59,000 Unclaimed Dividend 6520
Repairs to Building 26,810 Trade Payables 36,880
Miscellaneous Expenses 31,090 Sales 10,83,940
Machinery at cost 2,00,000 Provision for Depreciation 71,000
Motor Vehicles at cost 30,000 Interest on Investments 8540
Furniture at cost 5,000 Profit & Loss A/c (1/04/2022) 16,840
Opening Stock 1,72,050 Staff Provident Fund 37,500
Trade Receivables 2,23,380
Non-current Investments 2,88,950
Advance Payment of Tax 50,000
Cash Balance 72,240
Director’s Fees 1800
Total 21,11,220 21,11,220
Additional Information:

1. Closing stock on 31-03-2021 was valued at Rs.1,48,680.

2. Provide Rs.10,000 for depreciation on fixed assets, Rs.1800 for director’s fees and Rs.6200 for
the company’s contribution to Staff Provident Fund.
3. Interest accrued on investment amounted to Rs.2750.
4. Make provision for income-tax Rs.50,000.
5. The board of directors proposed final dividend at 8% after transfer to General Reserve
Rs.30,000. Provide corporate dividend tax at 20% of dividend.
6. A claim of Rs.2500 for workmen’s compensation is being disputed by the company.
7. Out of total authorised capital, the company has issued 60,000 shares of Rs.10 each.
Prepare Profit and Loss Account and Balance-sheet of the company as per Companies Act,2013 for the
year ended on 31-03-2023.