Solution: Example no.

Trading A/C of Mamta Fashions Pvt.Ltd. for the year ended 31st March 2006. Particulars Amount Rs. To Opening inventory To Purchases To Wages To Gross profit c/d 1,12,500 By Sales 27,00,000 By Closing inventory 86,970 3,55,530 32,55,000 32,55,000 Particulars Amount Rs. 31,20,000 1,35,000

Profit & Loss A/C of Mamta Fashions Pvt. Ltd for the year ended 31/ 03/ 2006.

Particulars

Amount Rs.

Amount Rs.

Particulars

Amount Rs.

Amount Rs. 3,55,530

To Salaries

90,338 By Gross Profit transfers from trading A/C

To interest on term loan Add: Interest due 27,000 27,000 To General Expenses To Depreciation on: Premises Plant & Machinery To Bad debts (T.B) To Bad Debts (Adj.) To Bad Debts Reserve (Adj.) To Bad Debt Reserve (T.B) 36,080 69,300 3,165 3,000 1,05,380 54,000 10,252

- 6,165

Preliminary Expenses written off Provision for income Tax To Net Profit c/d Total To Transfer to General Reserve To Proposed Dividend: *Preference Shares *Equity shares To Dividend Distribution Tax @ 16.995% of Proposed dividend 10,000 36,000

15,00 30,763 57,132 3,55,530 Total 2,900 Balance as on 1st April 2005 39,375 3,55,530

46,000

7,818

Balance Sheet of Mamta Fashions Pvt. Ltd. as on 31st March 2006

Liabilities

Amount Rs.

Amount Rs.

Assets

Amount Rs.

Amount Rs.

1.Share Capital Authorized : 1,00,000 Equity Shares of Rs.10 each 1000 10% Preference Shares of Rs.100 each

1.Fixed Assets: Land 10,00,000 Premises: Less: Depr. @ 10% Plant & Machinery 1,00,000 Less: Depr. @ 14% 4,95,000 69,300 4,25,700 3,60,800 36,080 3,24,720 87,500

Issued, Subscribed, Called-up and Paid up: 30,000 Equity Shares of Rs.10 each 1,000 10% Preference Shares of Rs.100 each. 3,00,000

2.Investments:

1,00,000

2.Reserves & Surplus:

3. Current Assets, Loans and

General Reserve as on 1/04/05 Add: Created during the year Surplus in P& L A/C

37,500

Advances: 40,400 Current Assets: 1,35,000 1,06,050 25,000

29,00

Inventory Debtors 39,789 Add: Bills Receivable Dishonoured Less: Provision for Doubtful Debts Bills Receivable Less: Bills Dishonoured

1,31,050 3,000 1,28,050

58,875

25,000 3.Secured Loans: Term loans from Delhi Financial Corporation 4.Unsecured Loans 5. Current Liabilities and Provisions: A. Current Liabilities: Creditors Bills Payable Central Sales Tax Payable Interest Due on Term Loan 27,000 83,000 55,500 10,800 4. Miscellaneous Expenditure Preliminary Expenses Less: 1/5th Written off 75,00 1,500 Cash in hand 4,50,000 Current Account ABN AMRO Bank

33,875 4,725 45,500

6,000

B. Provisions: Income Tax Proposed Dividend Dividend Distribution Tax @ 16.995% of Proposed dividend 30,763 46,000 7,818

Total

11,91,070 Total

11,91,070