NCERT Solution for Class 12 Accountancy Chapter 3 - Financial Statements of a Company

NCERT Solutions are said to be an extremely helpful book while preparing for the CBSE Class 12 Accountancy examinations. This study material owns a deep knowledge and the Solutions collected by the subject matter exerts are no distinct.

NCERT Solution For Class 12 Accountancy Chapter 3 – Financial Statements Of A Company furnishes us with an all-inclusive data to all the concepts. As the students would have learnt the basic fundamentals about the subject of accountancy in class 11, this curriculum for class 12 is a continual part of it; which explains the concepts in a great way.

Download PDF Of Ncert Solution For Class 12 Accountancy Chapter 3 – Financial Statements Of A Company

 

ncert sol class 12 part 2 accountancy ch 3 financial statements of a company 01
ncert sol class 12 part 2 accountancy ch 3 financial statements of a company 02
ncert sol class 12 part 2 accountancy ch 3 financial statements of a company 03
ncert sol class 12 part 2 accountancy ch 3 financial statements of a company 04
ncert sol class 12 part 2 accountancy ch 3 financial statements of a company 05
ncert sol class 12 part 2 accountancy ch 3 financial statements of a company 06
ncert sol class 12 part 2 accountancy ch 3 financial statements of a company 07
ncert sol class 12 part 2 accountancy ch 3 financial statements of a company 08
ncert sol class 12 part 2 accountancy ch 3 financial statements of a company 09
ncert sol class 12 part 2 accountancy ch 3 financial statements of a company 10
ncert sol class 12 part 2 accountancy ch 3 financial statements of a company 11
ncert sol class 12 part 2 accountancy ch 3 financial statements of a company 12
ncert sol class 12 part 2 accountancy ch 3 financial statements of a company 13
ncert sol class 12 part 2 accountancy ch 3 financial statements of a company 14
ncert sol class 12 part 2 accountancy ch 3 financial statements of a company 15
ncert sol class 12 part 2 accountancy ch 3 financial statements of a company 16
ncert sol class 12 part 2 accountancy ch 3 financial statements of a company 17
ncert sol class 12 part 2 accountancy ch 3 financial statements of a company 18
ncert sol class 12 part 2 accountancy ch 3 financial statements of a company 19
ncert sol class 12 part 2 accountancy ch 3 financial statements of a company 20
ncert sol class 12 part 2 accountancy ch 3 financial statements of a company 21
ncert sol class 12 part 2 accountancy ch 3 financial statements of a company 22

 

Access the solution for class 12 Accountancy Chapter 3 – Financial Statements Of A Company

Short Questions for NCERT Accountancy Solutions Part 2 Class 12 Chapter 3

1. State the meaning of financial statements?

Financial statements are the end products of an accounting process, it provides a true picture of the performance of the company over a time period and such a statement is used by different users of accounting information. These statements are prepared annually

2. What are limitations of financial statements?

Limitation are:

1. Financial statements reflect historical data i.e it reflects the original price of the items or the price at which items were acquired. It fails to highlight the current price of items as per market and also inflated price due to rising inflation in the market. Hence data and information are historical in nature.

2. Financial statement do not portray the qualitative aspects of any transaction, the aspects such as size, colour, quality and the capabilities. Only quantitative data which can be expressed in monetary value are considered

3. Financial statement are biased in nature as it is dependent on human interference.

4. It becomes difficult to assess the performance of another company

5. It will be difficult to forecast as the statement is prepared based on historical data.

3. List any three objectives of financial statements?

The objectives of preparing financial statements are:

1. A financial statement provides timely and reliable information on the economic status of a company on a periodical basis. It also makes information available to external users or stakeholders who do not have direct access to the information.

2. A financial statement helps in revealing the true financial position of a company. It contains information related to liquidity, profitability, financial viability and solvency of an organisation.

3. A financial statement is helpful in evaluating the earning capacity of a firm.

4. State the importance of financial statements to
   (i) shareholders
   (ii) creditors
   (iii) government
   (iv) investors

Following are the importance of financial statements for:

1. Shareholders: For a shareholder, a financial statement is helpful in determining viability and profit making capacity of a business. It provides businesses with sufficient data to analyse the financial health and performance of the business.

2. Creditors: A financial statement is essential for a creditor to understand the credit worthiness of the business along with liquidity. It helps them to decide whether further investments can be done for this business.

3. Government: A financial statement helps government in determining GDP, national income, industrial growth etc. which leads to formulation of various policies and addressing problems like poverty and unemployment etc.

4. Investors: For Investors who have invested or those planning to invest, a financial statement is necessary. Financial statement helps determining the prospects and viability of new investments.

5. How will you disclose the following items in the Balance Sheet of a company:

(i) Loose Tools

(ii) Uncalled liability on partly paid-up shares

(iii) Debentures Redemption Reserve

(iv) Mastheads and publishing titles

(v) 10% debentures

(vi) Proposed dividends

(vii) Share forfeited account

(viii) Capital Redemption Reserve

(ix) Mining Rights

(x) Work-in-progress

 

Disclosure of various items in the Balance Sheet of a company is given below. 

Part 2 Class 12 Chapter 3-1

 

Long Questions for NCERT Accountancy Solutions Part 2 Class 12 Chapter 3

1. Explain the nature of the financial statements.

The nature of financial statements are:

1. Financial statement record facts about the items at the original price at which they were purchased and doesn’t take into account the prevailing market price, and also do not include price fluctuations due to inflation.

2.The financial statements are created based on various accounting conventions such as Prudence convention, matching concept etc. and adhering to such conventions result in the statements being easy to understand, compare and reflect the fair and true financial situation of the organisation.

3. A financial statement is based on many concepts such as going concern concept, realisation concept, and money measurement concept. A financial statement adheres to all these concepts when financial statements are prepared.

4. In preparing financial statements personal judgements play an important role. For example when determining which method to charge depreciation and recording of stock at market value or cost price. All these are based on personal judgement.

2. Explain in detail about the significance of the financial statements.

Importance of financial statements:

1. It provides information to various users of accounting information which can be both internal and external. Users derive information as per their needs from such statements. For example it provides shareholders an idea about the viability of business while the same statement can be used by tax authorities to determine tax payable by organisation.

2. It helps management in comparing performance which can be on both inter and intra firm basis, it helps in determining the viability of business and also is helpful in framing of policies for business. It enhances the decision making capabilities of the management.

3. Financial statements help creditors and investors determine the state of solvency of a business which influences decision to offer loans and credit.

4. Financial statements help provide information on different policies, methods, best practices and accounting processes. Disclosing accounting policies simplifies financial statements and makes users of accounting information.

5. The government uses accounting information to determine various parameters of national growth like GDP, National Income, Industrial growth etc.

6. Investors need information on business solvency and profitability to offer further loans and invest in business and such information is obtained from financial statements.

3. Explain the limitations of financial statements.

Limitation are:

1. Financial statements reflect historical data i.e. it reflects the original price of the items or the price at which items were acquired. It fails to highlight the current price of items as per market and also inflated price due to rising inflation in the market. Hence data and information are historical in nature.

2. Financial statement do not portray the qualitative aspects of any transaction, the aspects such as size, colour, quality and the capabilities. Only quantitative data which can be expressed in monetary value are considered.

3. Financial statement are biased in nature as it is dependent on the personal judgement regarding the way transactions are recorded

4. It becomes difficult to assess the financial performance of one company with another due to differences in practices and methods adopted by each company.

5. It will be difficult to forecast as the statement is prepared based on historical data as it fails to capture inflation rates.

6. The company can manipulate the data to show better liquidity position which can give false impression to the investors leading to project cancellation

.

4. Prepare the format of statement of Profit and Loss and explain its items.

As per the REVISED SCHEDULE VI, the statement is as follows

Statement of Profit and Loss

For year ended…

S. No.

Particulars

Note No.

Figures for the Current Year

Figures for the Previous Year

I

Revenue from Operations

 

 

 

II

Other Income

 

 

 

III

Total Revenue (I + II)

 

 

 

IV

Expenses:

 

 

 

 

Cost of Material Consumed

 

 

 

 

Purchase of Stock-in-Trade

 

 

 

 

Changes in inventories of finished goods

 

 

 

 

Work-in-progress and Stock-in-Trade

 

 

 

 

Employee Benefit Expenses

 

 

 

 

Finance Cost

 

 

 

 

Depreciation and Amortisation Expenses

 

 

 

 

Other Expenses

 

 

 

 

Total Expenses

 

 

 

V

Profit before exceptional and extraordinary items and tax (III – IV)

 

 

 

VI

Exceptional items

 

 

 

VII

Profit before extraordinary item and tax (V – VI)

 

 

 

VIII

Extraordinary Items

 

 

 

IX

Profit Before Tax (VII – VIII)

 

 

 

X

Tax Expenses

 

 

 

 

(1) Current Tax

 

 

 

 

(2) Deferred Tax

 

 

 

XI

Profit/(Loss) for period from continuing operations (IX – X)

 

 

 

XII

Profit/ (Loss) from discontinuing operations

 

 

 

XIII

Tax expenses of discontinuing operations

 

 

 

XIV

Profit/(Loss) from discontinuing operations (after Tax (XII – XIII)

 

 

 

XV

Profit (Loss) for the period (XI + XIV)

 

 

 

XVI

Earning Per Equity Shares

 

 

 

 

(1) Basic

 

 

 

 

(2) Diluted

 

 

 

 

 

 

 

 

 

Items of Profit and Loss Statement are:

1. Revenue from Operations: Revenue which is earned from the basic operating activities of an organisation. The source of revenue varies for financing and non-financing companies. For financing companies the revenue sources are: Interest, dividends and other types of financial services while for a non-financing company, it includes revenues earned from sales of products and services and other operating activities.

2. Other Incomes: Refers to incomes that are earned separately and not from any operating activity. These are the sources: Gain on sale of investments, income from interest, dividends as such.

3. Expenses: These include all the expenses such as cost of materials consumed, purchasing of stock in trade, also changes in inventories, stock in trade and work in progress.

5. Prepare the format of balance sheet and explain the various elements of balance sheet.

COMPANY’S BALANCE SHEET- As per REVISED SCHEDULE VI

Name of the Company…

BALANCE SHEET

as on…

Particulars

Note No.

Figures as at the end of Current Year

Figures as at the end of the Previous Year

I. EQUITY AND LIABILITIES

 

 

 

(1) Shareholders’ Funds

 

 

 

(a) Share Capital

 

 

 

(b) Reserves and 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 (Net)

 

 

 

(c) Other Long-Term Liabilities

 

 

 

(d) Long-Term Provisions

 

 

 

(4) Current Liabilities

 

 

 

(a) Short-Term Borrowings

 

 

 

(b) Trade Payables

 

 

 

(c) Other Current Liabilities

 

 

 

(d) Short-Term Provision

 

 

 

 

 

 

 

TOTAL

 

 

 

 

 

 

 

II. ASSETS

 

 

 

(1) Non-Current Assets

 

 

 

(a) Fixed Assets

 

 

 

(i) Tangible Assets

 

 

 

(ii) Intangible Assets

 

 

 

(iii) Capital Work-in-Progress

 

 

 

(iv) Intangible assets under development

 

 

 

(b) Non-Current Investments

 

 

 

(c) Deferred tax assets (net)

 

 

 

(d) Long-Term Loans and Advances

 

 

 

(e) Other Non-Current Assets

 

 

 

(2) Current Assets

 

 

 

(a) Current Investments

 

 

 

(b) Inventories

 

 

 

(c) Trade Receivables

 

 

 

(d) Cash and Cash Equivalents

 

 

 

(e) Short-Term Loans and Advances

 

 

 

(f) Other Current Assets

 

 

 

 

 

 

 

TOTAL

 

 

 

 

 

 

 

The elements of a balance sheet consists of:

A. Shareholder Funds

1. Share Capital consists of Authorised capital, Subscribed capital and Issued capital equity and preference share.

2. Reserves and Surplus consists of Capital Reserve, Debenture Redemption, Capital Redemption Reserve, Tax Reserve, General Reserve and Share warrants. Share warrants provide the holder to have ownership of equity shares of a company. When money is received from selling share warrants it is called as money received against warrants.

B. Share Application money pending allotment: It refers to application on which allotment is pending but amount is received. It takes place when a company issues equity shares publicly in order to raise funds.

C. Non-Current Liabilities: It consists of following items: long term borrowings, deferred tax liablities, long term provisions and other long term liabilities.

D. Current liabilities: It consists of following items: short term liabilities, trade payables, short term provisions

E. Assets which include Non-current and Current Assets. Non-current assets can be long term loans, plant, machinery, furniture, goodwill etc. while current assets are investment is shares and debentures, finished goods, raw materials, cash and cash equivalents, bank balance, cheques not encashed, short-term.  

6. Explain how financial statements are useful to the various parties who are interested in the affairs of an undertaking?

The various parties interested in financial statements of a company can be broadly classified as: 1. Internal and 2. External

Internal Users

1. Owners: The interest of an owner is towards knowing whether profit is earned or loss is incurred by the business. They are more interested in knowing about the viability of the capital that is invested in the business.

2. Management: Financial statements help management in devising new policies for growth of business and also provides management with the insights required for implementing various cost cutting measures.

3. Employees: They are interested in timely payments, bonuses and appraisals at the decided time. Financial statements help employees to learn about financial position of the organisation so that appropriate salary can be demanded.

External Users:

1. Banks and Financial Institutions: Such institutions provide credit so it is necessary to understand the liquidity, solvency and creditworthiness of the organisation for loan requirements in future.

2. Creditors: Businesses own money to creditors and hence it is important for them to have information about credit worthiness of the business.

3. Investors or potential investors: These are people who will provide funds by means of investment in business, hence the viability and solvency of an organisation will help in making investment decisions.

4. Tax Authorities: Information is required by them for determining the types of taxes that can be charged on the organisation.

5. Government: Government needs information to determine National Income, GDP and industrial growth. Financial statements help government in formulating various policies and address issues like poverty and unemployment.

6. Consumers: An organisation publishing financial statement makes consumers aware of the profits they are earning and the relative expenses that goes into providing services at affordable prices, thus helping in gaining a good name among consumers.

7. Public: Public knowledge of financial statements is about how the business is spending money for social welfare.

8. Researchers: Researchers use the financial statements to predict market trends and undertake research projects.

7. `Financial statements reflect a combination of recorded facts, accounting conventions and personal judgments’ discuss.

Financial statements reveal the true financial position of a company and help in formulating various decisions and policy making. The nature of financial statements are dependent on these aspects:

1. Financial statement record facts about the items at the original price at which they were purchased and doesn’t take into account the prevailing market price, and also do not include price fluctuations due to inflation.

2.The financial statements are created based on various accounting conventions such as Prudence convention, matching concept etc. and adhering to such conventions result in the statements being easy to understand, compare and reflect the fair and true financial situation of the organisation.

3. A financial statement is based on many concepts such as going concern concept, realisation concept, and money measurement concept. A financial statement adheres to all these concepts when financial statements are prepared.

4. In preparing financial statements personal judgements play an important role. For example when determining which method to charge depreciation and recording of stock at market value or cost price. All these are based on personal judgement.

8. Explain the process of preparing income statement and balance sheet.

Process of preparing income statement and balance sheet is as follows:

Income Statement:

1. Prepare a trial balance as per balance of different accounts in the ledger.

2. Determine revenue received from the business operation which is achieved by subtracting sales return from sales conducted.

3. Add incomes received other than revenue (such as cash discount, profit earned from sale of assets.

4. Deduct expenses from total revenue to determine profit before tax.

5. Deduct tax paid by company from the amount determined as profit before tax to arrive at Net Profit or Loss.

Balance Sheet:

Balance sheet consists of two parts: Equity and Liabilities and Assets.

1. The equity and liabilities contain shareholder funds, non-current liabilities, current liabilities and share application money pending allotment are recorded.

2. Assets are recorded next, it contains all non-current and current assets

3. Tally the total of both sides. It must be equal for the total to tally.

Numerical Questions for NCERT Accountancy Solutions Part 2 Class 12 Chapter 3

1. Show the following items in the balance sheet as per the provisions of the Companies Act, 2013 in Schedule III:
 

Particulars

 

Particulars

 

Preliminary Expenses

2,40,000

Good will

30,000

Discount on issue of shares

20,000

Loose tools

12,000

10% Debentures

2,00,000

Motor Vehicles

4,75,000

Stock in Trade

1,40,000

Provision for tax

16,000

Cash at bank

1,35,000

 

 

Bills receivable

1,20,000

 

 

The solution for this question is as follows:

Extract of Balance Sheet

as at March 31, 2013

Particulars

Note No.

Amount 

(₹)

I. Equity and Liabilities

 

 

1. Shareholders’ Funds

 

 

a. Share Capital

 

 

b. Reserves and Surplus

 

 

2. Non-Current Liabilities

 

 

  1. Long-term Borrowings

1

2,00,000

3. Current Liabilities

 

 

  1. Other Current Liabilities

 

 

     b. Short-term Provisions

2

16,000

 

 

 

II. Assets

 

 

1Non-Current Assets

 

 

  1. Fixed Assets

 

 

         i. Tangible Assets

3

4,75,000

        ii. Intangible Assets

4

30,000

     b. Non-Current Investments

 

 

2. Current Assets

 

 

  1. Inventories

5

1,52,000

     b. Trade Receivables

6

1,20,000

     c.Cash and Cash Equivalents

7

1,35,000

    d. Other Current Assets

8

2,60,000

 

 

 

 

Notes to Accounts

Particulars

Amount

(₹)

1. Long Term Borrowings

 

10% Debentures

2,00,000

 

 

2. Short Term Provisions

 

Provision for Tax

16,000

 

 

3. Tangible Assets

 

Motor Vehicles

4,75,000

 

 

4. Intangible Assets

 

Goodwill

30,000

 

 

5. Inventory

 

Loose Tools

12,000

 

Stock

1,40,000

1,52,000

 

1,52,000

 

 

6. Trade Receivables

 

Bill Receivable

1,20,000

 

 

7. Cash and Cash equivalents 

 

Cash at Bank

1,35,000

 

 

8. Other Current Assets

 

Preliminary Expenses

2,40,000

 

Discount on Issue of Shares

20,000

2,60,000

 

2,60,000

 

 

 

2. On 1st Aril, 2017, Jumbo Ltd. issued 10,000; 12% debentures of ₹. 100 each a discount of 20%, redeemable after 5 years. The company decided to write-off discount on issue of such debentures over the life time of the Debentures. Show the items in the balance sheet of the company immediately after the issue of these debentures.

The solution for this question is as follows:

Balance Sheet

as at April 01, 2017

Particulars

Note No.

Amount 

(₹)

I. Equity and Liabilities

 

 

1. Shareholders’ Funds

 

 

a. Share Capital

 

 

b. Reserves and Surplus

 

 

2. Non-Current Liabilities

 

 

      a. Long-term Borrowings

1

10,00,000

3. Current Liabilities

 

 

      a. Other Current Liabilities

 

 

       b. Short-term Provisions

 

 

Total

 

10,00,000

 

 

 

II. Assets

 

 

1Non-Current Assets

 

 

     a. Other Non-Current Assets

2

1,60,000

2. Current Assets

 

 

     a. Other Current Assets

3

40,000

     b. Cash and Cash Equivalents

4

8,00,000

Total

 

10,00,000

 

 

 

 

Notes to Accounts

Particulars

Amount

(₹)

1. Long Term Borrowings

 

12% Debentures

10,00,000

 

 

2.Other Non-current assets

 

Unamortized discount on issue of Debentures

1,60,000

 

 

3. Other Current Assets

 

Unamortized discount on issue of Debentures

40,000

 

 

4. Cash and Cash Equivalents

 

Bank

8,00,000

 

 

 

 

3. From the following information prepare the balance sheet of Gitanjali Ltd., as per the (Revised) Schedule VI:

Inventories ₹. 14,00,000; Equity Share Capital ₹. 20,00,000; Plant and Machinery ₹. 10,00,000; Preference Share Capital ₹. 12,00,000; Debenture Redemption Reserve ₹. 6,00,000; Outstanding Expenses ₹. 3,00,000; Proposed Dividend ₹. 5,00,000; Land and Building ₹. 20,00,000; Current Investments ₹. 8,00,000; Cash Equivalent ₹. 10,00,000; Short term loan from Zaveri Ltd. (A Subsidiary Company of Twilight Ltd.) ₹. 4, 00,000; Public Deposits ₹. 12, 00,000.

The solution for this question is as follows:

Balance Sheet

as on …

Particulars

Note No.

Amount 

(₹)

I. Equity and Liabilities

 

 

1. Shareholders’ Funds

 

 

a. Share Capital

1

32,00,000

b. Reserves and Surplus

2

6,00,000

2. Non-Current Liabilities

 

 

      a. Long-term Borrowings

3

12,00,000

3. Current Liabilities

 

 

      a. Other Current Liabilities

4

3,00,000

       b. Short-term Borrowings

5

4,00,000

       c. Short-term Provisions

6

5,00,000

Total

 

62,00,000

 

 

 

II. Assets

 

 

1Non-Current Assets

 

 

    a. Fixed Assets

 

 

       i. Tangible Assets

7

30,00,000

       ii. Intangible Assets

 

 

     b. Non-Current Investments

 

 

2. Current Assets

 

 

     a. Inventories

 

14,00,000

      b. Current Investments

 

8,00,000

      c. Cash and Cash Equivalents

 

10,00,000

Total

 

62,00,000

 

 

 

 

Notes to Accounts

Particulars

Amount

(₹)

1. Share Capital

 

Equity Share Capital

20,00,000

 

Preference Share Capital

12,00,000

32,00,000

 

32,00,000

 

 

2.Reserve and Surplus

 

Debenture Redemption Reserve

6,00,000

 

 

3. Long-term Borrowings

 

Public Deposits

12,00,000

 

 

4. Other Current Liabilities 

 

Outstanding Expenses

3,00,000

 

 

5. Short-term Borrowings

 

Loan from Zaveri Ltd.

4,00,000

 

 

6. Short-Term Provisions

 

Proposed Dividend

5,00,000

 

 

7. Tangible Assets

 

Land and Building

20,00,000

 

Plant and Machinery

10,00,000

30,00,000

 

30,00,000

 

 

 

 

4. From the following information prepare the balance sheet of Jam Ltd. as per the (revised) Schedule VI:

Inventories ₹. 7, 00,000; Equity Share Capital ₹. 16, 00,000; Plant and Machinery ₹. 8, 00,000; Preference Share Capital ₹. 6, 00,000; General Reserve’s ₹. 6, 00,000; Bills payable ₹. 1, 50,000; Provision for taxation ₹. 2, 50,000; Land and Building ₹. 16, 00,000; Noncurrent Investments ₹. 10, 00,000; Cash at Bank ₹. 5, 00,000; Creditors ₹. 2, 00,000; 12% Debentures ₹. 12,00,000.

The solution for this question is as follows:

Balance Sheet

as at March 31, 2013

Particulars

Note No.

Amount 

(₹)

I. Equity and Liabilities

 

 

1. Shareholders’ Funds

 

 

a. Share Capital

1

22,00,000

b. Reserves and Surplus

2

6,00,000

2. Non-Current Liabilities

 

 

      a. Long-term Borrowings

3

12,00,000

3. Current Liabilities

 

 

      a. Short-term Borrowings

 

 

       b. Trade Payables

4

3,50,000

       c. Short-term Provisions

5

2,50,000

Total

 

46,00,000

 

 

 

II. Assets

 

 

1Non-Current Assets

 

 

    a. Fixed Assets

 

 

        i. Tangible Assets

6

24,00,000

    b. Non-Current Investments

 

10,00,000

2. Current Assets

 

 

    a. Inventories

 

7,00,000

    b. Cash and Cash Equivalents

7

5,00,000

Total

 

46,00,000

 

 

 

 

Notes to Accounts

Particulars

Amount

(₹)

1. Share Capital

 

Equity Share Capital

16,00,000

 

Preference Share Capital

6,00,000

22,00,000

 

22,00,000

 

 

2.Reserve and Surplus

 

General Reserve

6,00,000

 

 

3. Long Term Borrowings

 

12% Debentures

12,00,000

 

 

4. Trade Payables

 

Creditors

2,00,000

 

Bills Payable

1,50,000

3,50,000

 

3,50,000

 

 

5. Short-Term Provisions

 

Provision for Taxation

2,50,000

 

 

6. Tangible Assets

 

Land and Building

16,00,000

 

Plant and Machinery

8,00,000

24,00,000

 

24,00,000

 

 

7. Cash and Cash Equivalents

 

Bank

5,00,000

 

 

 

 

5. Prepare the balance sheet of Jyoti Ltd. as at March 31, 2017 from the following information:

Building ₹. 10,00,000; Investments in the shares of Metro Tyers ₹. 3,00,000; Stores & Spares ₹. 1,00,000; Discount on issue of 10% debentures ₹. 10,000; Statement of Profit and Loss (Dr.) ₹. 90,000; 5,00,000 Equity Shares of ₹. 20 each fully paid-up; Capital Redemption Reserve ₹. 1,00,000; 10% Debentures ₹. 3,00,000; Unpaid dividends ₹. 90,000; Share options outstanding account ₹. 10,000.

The solution for this question is as follows:

Balance Sheet

as at March 31, 2017

Particulars

Note No.

Amount 

(₹)

I. Equity and Liabilities

 

 

1. Shareholders’ Funds

 

 

a. Share Capital

1

10,00,000

b. Reserves and Surplus

2

10,000

2. Non-Current Liabilities

 

 

  1. Long-term Borrowings

3

3,00,000

3. Current Liabilities

 

 

  1. Other Current Liabilities

4

1,00,000

Total

 

14,10,000

 

 

 

II Assets

 

 

1Non-Current Assets

 

 

     a. Fixed Assets

 

 

       i. Tangible Assets

5

10,00,000

     b. Non-Current Investments

6

3,00,000

2. Current Assets

 

 

     a. Inventories

7

1,00,000

     b. Other Current Assets

8

10,000

Total

 

14,10,000

 

 

 

Notes to Accounts

Particulars

Amount

(₹)

1.Share Capital

 

Equity Share Capital (50,000* shares of ₹ 20 each)

10,00,000

 

 

2.Reserve and surplus

 

Capital Redemption Reserve

1,00,000

 

Less: Statement of Profit or Loss (Debit)

90,000

10,000

 

10,000

3. Long-term Borrowings

 

10% Debentures

3,00,000

 

 

4. Other Current Liabilities

 

Unpaid Dividend

90,000

 

Share Option Outstanding

10,000

1,00,000

 

1,00,000

 

 

5. Tangible Assets

 

Building

10,00,000

 

 

6. Non-Current Investments

 

Shares of Metro Tyres

3,00,000

 

 

7. Inventory

 

Stores and Spares

1,00,000

 

 

8. Other Current Assets

 

Discount on Issue of 10% Debentures

10,000

 

 

 

6. Brinda Ltd. has furnished the following information:

(a) 25,000, 10% debentures of ₹. 100 each;

(b) Bank Loan of ₹. 10, 00,000 repayable after 5 years;

(c) Interest on debentures is yet to be paid.

Show the above items in the balance sheet of the company as at March 31, 2017.

The solution for this question is as follows:

Extract of Balance Sheet

as at March 31, 2017

Particulars

Note No.

Amount 

(₹)

I. Equity and Liabilities

 

 

1. Shareholders’ Funds

 

 

a Share Capital

 

 

b. Reserves and Surplus

 

 

2. Non-Current Liabilities

 

 

  1. Long-term Borrowings

1

35,00,000

3. Current Liabilities

 

 

  1. Other Current Liabilities

2

2,50,000

 

 

 

 

Notes to Accounts

Particulars

Amount

(₹)

1. Long Term Borrowings

 

12% Debentures

25,00,000

 

Bank Loan

10,00,000

35,00,000

 

35,00,000

 

 

2. Other Current Liabilities

 

Interest on Debentures

2,50,000

 

 

  7. Prepare a balance sheet of Black Swan Ltd., as at March 31, 2017 form the following information:

General Reserve

:

3,000

10% Debentures

:

3,000

Statement of Profit & Loss

:

1,200

Depreciation on fixed assets

:

700

Gross Block

:

9,000

Current Liabilities

:

2,500

Preliminary Expenses

:

300

6% Preference Share Capital

:

5,000

Cash & Cash Equivalents

:

6,100

The solution for this question is as follows:

Extract of Balance Sheet

as at March 31, 2017

Particulars

Note No.

Amount 

(₹)

I. Equity and Liabilities

 

 

1. Shareholders’ Funds

 

 

a. Share Capital

1

5,000

b. Reserves and Surplus

2

4,200

2. Non-Current Liabilities

 

 

      a. Long-term Borrowings

3

3,000

3. Current Liabilities

 

2,500

Total

 

14,700

 

 

 

II. Assets

 

 

1Non-Current Assets

 

 

     a. Fixed Assets

 

 

         i. Tangible Assets

4

8,300

2. Current Assets

 

 

     a. Cash and Cash Equivalents

5

6,100

     b. Other Current Assets

6

300

Total

 

14,700

 

 

 

Notes to Accounts

Particulars

Amount

(₹)

1. Share Capital

 

6% Preference Share Capital

5,000

 

 

2.Reserve and Surplus

 

General Reserve

3,000

 

Statement of Profit or Loss

1,200

4,200

 

4,200

 

 

3.Long Term Borrowings

 

10% Debentures

3,000

 

 

4. Tangible Assets

 

Fixed Assets

9,000

 

Less: Depreciation

700

8,300

 

8,300

 

 

5.Cash and Cash Equivalents

 

Cash

6,100

 

 

6. Other Current Assets

 

Preliminary Expenses

300

 

 


Concepts covered in this chapter –
  • Meaning of financial statements
  • Nature of financial statements
  • Objectives of financial statements
  • Types of financial statements
  • Limitations of financial statements

Conclusion

NCERT solutions for class 12 Accountancy chapter 3 provides a wide degree of illustrative examples; which assists the students to comprehend and learn quickly. The above mentioned are the illustrations for class 12 CBSE syllabus. For more solutions and study materials of NCERT solutions for class 12 Accountancy visit BYJU’S or download the app for more information.

Leave a Comment

Your email address will not be published. Required fields are marked *