Following are the extracts from the Balance Sheet of MAH Ltd. as at 31st March, 2019:

Particular

31^st March

2019

(₹)

31^st March

2018

(₹)

Surplus, i.e., Balance in Statement of Profit and Loss
10,00,000

5,00,000

Dividend Payable
50,000

–

Additional Information: Proposed Dividend for the years ended 31st March, 2018 and 2019 are ₹ 4,00,000 and ₹ 5,00,000 respectively.
Prepare the Note to show Net Profit before Tax and Extraordinary Items.

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Solution

Particulars

Amount

(₹)

Profit as per Statement of Profit and Loss (10,00,000 – 5,00,000)

5,00,000

Add: Proposed Dividend (Current Year)

4,00,000

Profit Before Taxation and Extraordinary Items

9,00,000

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Q. Following is the extract from the Balance Sheet of Zee Ltd.:

Particular	31^st March 2019 (₹)	31^st March 2018 (₹)
Equity Share Capital	8,00,000	8,00,000
10% Preference Share Capital	6,00,000	6,00,000
Surplus i.e., Balance in Statement of Profit and Loss	7,20,000	4,00,000
Unpaid Dividend	20,000	–

Additional Information:
(i) Proposed dividend on equity shares for the year 2017-18 and 2018-19 are ₹ 1,60,000 and ₹ 2,00,000 respectively.
(ii) An Interim Dividend of ₹ 40,000 on Equity Shares was paid.
Calculate Net Profit before Tax and Extraordinary Items.

Q. Calculate Net Profit before Tax and Extraordinary Items of Premier Sales Ltd. from its Balance Sheet as at 31st March, 2019:

Particulars ulars	Note No.	31st March, 2019 (₹)	31st March, 2018 (₹)
I. EQUITY AND LIABILITIES
1. Shareholders' Funds
(a) Share Capital		5,00,000	5,00,000
(b) Reserves and Surplus (Surplus, i.e., Balance in Statement of Profit and Loss)		2,00,000	1,45,000
2. Current Liabilities
(a) Trade Payables		90,000	50,000
(b) Other Current Liabilities		20,000	10,000
(c) Short-term Provisions	1	50,000	30,000
Total Total Expenses		8,60,000	7,35,000
II. ASSETS
1. Non-Current Assets
(a) Fixed Assets		4,50,000	4,00,000
(b) Non-Current Investments		50,000	1,50,000
2. Current Assets		2,60,000	1,85,000
Total		8,60,000	7,35,000

Notes to Accounts

Particulars	31st March, 2019 (₹)	31st March, 2018 (₹)
I. Short-term Provisions
Provision for Tax	50,000	30,000

Additional Information:

(i) Proposed Dividend for the years ended 31st March, 2018 and 2019 are ₹ 50,000 and ₹ 75,000 respectively.
(ii) Interim Dividend paid during the year was ₹ 10,000.

From the following Balance Sheet as at 31st March, 2019 and Statement of Profit and Loss for the year ended 31st March, 2019 of RSB Ltd. and additional information, prepare Cash Flow Statement:

Particulars	Note No.	31st March, 2019 (₹)	31st March, 2018 (₹)
I. EQUITY AND LIABILITIES
1. Shareholders' Funds
(a) Share Capital		7,50,000	5,00,000
(b) Reserves and Surplus	1	9,50,000	3,00,000
2. Non-Current Liabilities
Long-term Borrowings (5% Debentures)		7,00,000	4,00,000
3. Current Liabilities
(a) Trade Payables		1,10,000	90,000
(b) Other Current Liabilities	2	39,000	25,000
(c) Short-term Provisions (Provision for Tax)		2,60,000	2,25,000
Total		28,09,000	15,40,000
II. ASSETS
1. Non-Current Assets
(a) Fixed Assets – Tangible	3	6,85,000	7,45,000
(b) Non-current Investments		7,50,000	2,50,000
2. Current Assets
(a) Current Investments		6,74,000	95,000
(b) Inventories		1,00,000	2,00,000
(c) Trade Receivables		4,00,000	1,50,000
(d) Cash and Cash Equivalents		2,00,000	1,00,000
Total		28,09,000	15,40,000

STATEMENT OF PROFIT AND LOSS
for the year ended 31st March, 2019
Particulars	Note No.	31st March, 2019 (₹)	31st March, 2018 (₹)
I. Revenue from Operations	4	40,00,000	35,00,000
II. Other Income	5	35,000	30,000
III. Total Revenue (I + II)		40,35,000	35,30,000
IV. Expenses:
Purchases of Stock-in-Trade		27,00,000	24,70,000
Change in Inventories of Stock-in-Trade	6	1,00,000	50,000
Finance Cost		27,500	20,000
Depreciation		40,000	45,000
Other Expenses		22,500	20,000
Total Expenses		28,90,000	26,05,000
V. Profit before Tax (III – IV)		11,45,000	9,25,000
VI. Less: Tax		3,45,000	2,25,000
VII. Profit after Tax (V – VI)		8,00,000	7,00,000

Notes to Accounts

Particular		31^st March 2019 (₹)	31^st March 2018 (₹)
1.	Reserves and Surplus
	Debenture Redemption Reserve	1,00,000	1,00,000
	Surplus, i.e., Balance in Statement of Profit and Loss	8,50,000	2,00,000
		9,50,000	3,00,000
2.	Other Current Liabilities
	Interest on Debentures	35,000	20,000
	Outstanding Expenses	4,000	5,000
		39,000	25,000
3.	Fixed Assets–Tangible
	Cost	8,90,000	9,90,000
	Less: Accumulated Depreciation	2,05,000	2,45,000
		6,85,000	7,45,000
4.	Revenue from Operations
	Sales	42,00,000	35,75,000
	Less: Sales Return	2,00,000	75,000
		40,00,000	35,00,000
5.	Other Income
	Interest on Deposits	15,000	12,500
	Dividend on Investments	10,000	17,500
	Gain (Profit) on Sale of Fixed Assets	10,000	…
		35,000	30,000
6.	Change in Inventories of Stock-in-Trade
	Opening Stock	2,00,000	2,50,000
	Less: Closing Stock	1,00,000	2,00,000
		1,00,000	50,000

Additional Information:

Q. From the following Receipts and Payments Account and additional information given below, prepare Income and Expenditure Account and Balance Sheet of Rural Literacy Society as on 31st March, 2019:

RECEIPTS AND PAYMENTS ACCOUNT for the year ended 31 st March, 2019
Dr.				Cr.
Receipts		Amount (₹)	Payments	Amount (₹)
To Balance b/d:			By General Expenses	32,000
Cash in Hand		40,000	By Newspaper	18,500
Cash at Bank		1,55,500	By Electricity	30,000
To Subscriptions:			By Fixed Deposit with Bank	1,80,000
2017-18	12,000		(On 30th September, 2018 @ 10% p.a.)
2018-19	2,65,000		By Books	70,000
2019-20	5,000	2,82,000	By Salary	36,000
To Legacy		12,500	By Rent	65,000
To Government Grant		1,20,000	By Postage Charges	3,000
To Sale of Old Furniture		37,000	By Furniture (purchased)	1,05,000
(Book value ₹ 50,000)			By Balance c/d:
To Interest received on Fixed Deposit		4,500	Cash in Hand	30,000
			Cash at Bank	82,000
		6,51,500		6,51,500

Additional information:
(i) Subscription outstanding as on 31st March, 2018 ₹ 20,000 and on 31st March, 2019 ₹ 15,000.
(ii) On 31st March, 2019, salary outstanding ₹ 6,000 and one month rent paid in advance.
(iii) On 1st April, 2018, society owned furniture ₹ 1,20,000 and books ₹ 50,000.

Q. From the following Trial Balance, extracted from the books of Raga Ltd., prepare a Profit and Loss Account for the year ended 31st March, 2019 and a Balance Sheet as at that date:

Debit Balances	(₹)	Credit Balances	(₹)
Drawings Account	20,000	Sales	2,20,000
Land & Building	12,000	Capital	1,01,110
Plant and Machinery	40,000	Discount	1,260
Carriage Inward	100	Commission	5,230
Wages	500	Bills Payable	1,28,870
Salary	2,000	Purchase Return	10,000
Sales Return	200
Bank charges	200
Coal, gas and water	1,200
Purchases	1,50,000
Trade Expenses	3,800
Stock (Opening)	76,800
Cash at Bank	50,000
Rates and Taxes	870
Bills Receivable	24,500
Sundry Debtors	54,300
Cash in hand	30,000
	4,66,470		4,66,470

The additional informations are as under:
(i) Closing stock was valued at the end of the year at ₹ 20,000.
(ii) Depreciation on Plant and Machinery charged at 5% and on Land and Building at 10%.
(iii) Make a provision for discount on debtors at 3%.
(iv) Make a provision at 5% on debtors for Bad-debts.
(v) Salary outstanding was ₹ 100 and Wages prepaid were ₹ 40.
(vi) The manager is entitled to a Commission of 5% on Net Profit after charging such Commission.

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	Particulars	Amount (₹)
	Profit as per Statement of Profit and Loss (10,00,000 – 5,00,000)	5,00,000
	Add: Proposed Dividend (Current Year)	4,00,000
	Profit Before Taxation and Extraordinary Items	9,00,000

Particulars Amount (₹) Profit as per Statement of Profit and Loss (10,00,000 – 5,00,000) 5,00,000 Add: Proposed Dividend (Current Year) 4,00,000 Profit Before Taxation and Extraordinary Items 9,00,000

Particulars

Amount

(₹)

Profit as per Statement of Profit and Loss (10,00,000 – 5,00,000)

5,00,000

Add: Proposed Dividend (Current Year)

4,00,000

Profit Before Taxation and Extraordinary Items

9,00,000