Solution: 3

M/s Modern Dress Bhandar Ltd.

Balance Sheet as at 31st March 2012
Particulars Note RS.

I. EQUITY AND LIABILITIES

1. Shareholders’ Funds

a) Share Capital 1 39,25,000

b) Reserves and Surplus 2 3,00,000

2. Non-Current Liabilities

Long-term Borrowings 3 30,00,000

3. Current Liabilities

a. Trade Payables 4 7,70,000

b. Other Current Liabilities 5 1,80,000

c. Short-term Provisions 6 83,55,000

Total

II. Assets

1. Non-Current Assets

Fixed Assets

- Tangible Assets 7 58,77,000

- Intangible Assets 8 2,50,000

Other Non-Current Assets 9 45,000

2. Current Assets

a. Inventories (Stock) 9,50,000

b. Trade Receivables 10 8,26,500

c. Cash and cash Equivalents 11 4,06,500

Total 83,55,000

Profit and Loss Statement for the year ended 31st March, 2012

Particulars Note RS. RS.

 1. Revenue From Operations (Sales) 41,50,000

2. Other Income

1. Total Revenue 41,50,000

Expenses:

1. Purchases 18,50,000

2. Changes in Inventories

Opening Stock 7,50,000

Less: Closing Stock (9,50,000) (2,00,000)

3. Employee Benefit Expenses 12 11,82,050

4. Finance Cost 13 3,60,000

5. Depreciation and Amortization Expenses 14 4,95,000

6. Other Expenses 15 1,02,950

2. Total Expenses 37,90,000

3. Profit Before Tax 3,60,000

Income-Tax Expenses (provision for Taxation @ 50% of Rs.3,60,000) 1,80,000

4. Profit /(Loss) for the Period 1,80,000

Notes to Accounts RS.

1. Share Capital

Issued subscribed & paid up capital

4, 00,000 Equity Shares of Rs.10 (assumed) each fully called up……….. 40,00,000

Less: Calls-in-arrears 75,000

Total 39,25,000

2. Reserves and Surplus

1. General Reserve 2,50,000

2. Surplus Account
Balance as at 1-4-2011 2,62,500

Add: Profit for the year 1,80,000

4,42,500

Less: Interim Dividend 3,92,500 50,000

Total 3,00,000

3. Long-term Borrowings

12% Debentures 30,00,000

4. Trade Payables

a. Bills Payable 3,70,000

b. Creditors 4,00,000

Total 7,70,000

5. Other Current Liabilities

Debenture Interest A/c 1,80,000

6. Short-term Provisions

Provision for Tax 1,80,000

7. Tangible Assets

a. Premises 30,72,000

b. Plant 33,00,000

Less: Depreciation 4,95,000 28,05,000

Total 58,77,000

8. Intangible Assets

Goodwill 2,50,000

9. Other Non-Current Assets

Share Issue Expenses 50,000

Less: Written off 5,000

Total 45,000

10. Trade Receivables

Debtors 8,70,000

Less: provision for Doubtful Debts 43,500

Total 8,26,500

11. Cash and cash Equivalents

Cash at Bank 4,06,500

12. Employee Benefits Expenses

a. Wages 9,79,800

b. Salaries 2,02,250

Total 11,82,050

13. Finance Costs

a. Debenture Interest paid 1,80,000

b. Outstanding (6 months) 1,80,000

Total 3,60,000

14. Depreciation and Amortization Expenses

Depreciation on Plant (15% of Rs.33,00,000) 4,95,000

15. Other Expenses

a. Bad Debts 21,100

Add: Provision for Doubtful Debts (RS.8,70,000 x 5/100) 43,500

64,600

Less: bad Debts Provision (Old) 35,000 29,600

b. General Expenses 68,350

c. Share Issue Expenses w/o 5,000

Total 1,02,950