TY BBI - Banking Companies Final Accounts

Recognition of Interest
Q1 From the following information calculate interest income to be recognized for the year end
31.03.2018
( Rs in Lakhs)
Particulars Total Interest Earned Earned but not Collected
during the year
Performing Assets Non-Performing
Assets
Cash Credit 2000 400 420
Overdraft 1300 100 350
Term Loan 2000 40 500

Q1 a From the following information calculate interest income to be recognized for the year end
31.03.2018
( Rs in Lakhs)
Particulars Total Interest Earned but not Collected
Collected
Performing Assets Non-Performing
Assets
Cash Credit 2000 400 420
Overdraft 1300 100 350
Term Loan 2000 40 500

Q2. From the following information calculate interest income to be recognized for the year end
31.03.2018
Particulars Total Interest Earned NPA
Earned Collected
Cash Credit 2820 820 400
Overdraft 750 450 100
Term Loan 2540 750 250
Q3. From the following information calculate interest income to be recognized for the year end
31.03.2018
(Rs. Lakhs)
Particulars Performing Assets NPA
Earne Collected Earned Collected
d
Term Loan 100 80 50 20
Cash Credit 200 120 100 60
Bills Purchased and Discounted 300 180 150 90

Q4 Home work
KC Bank Statement of interest on advances in respect of Performing Assets and Non-Performing
assets are as follows:
( Rs in Lakhs)
Particulars Performing Assets Non - Performing Assets
Interest Earned Interest Received Interest Earned Interest Received
Cash Credits and 1800 1060 450 70
Overdraft
Term Loan 480 320 300 40
Bills Purchased 700 550 350 35
and Discounted
Find out the income to be recognized for the year ended 31st March.
 Rebate on Bill Discounting
Q1. From the Following data calculate rebate on Bills Discount as on 31.12.2019 and pass
journal entries in the book of Krishna Bank Ltd.
The following bills were discounted at 5%:
Discounted Amount Rs Due date inclusive
of 3 days of grace
28.12.2019 50,000 31.01.2020
29.07.2019 1,00,000 30.11.2019
29.10.2019 4,00,000 30.04.2020
31.12.2019 30,000 03.03.2020

Q2. The following is an extract from Trial Balance of Dream Bank Ltd. as on 31st March 2006:
Rebate on Bills Discounted on dt. 01.04.2005 Rs. 68,259 (Cr)
Discounted Received Rs. 1,70,156 (Cr)
Analysis of the bills discounted reveals:
Due Date Amount (Rs)
01.06.2006 2,80,000
08.06.2006 8,72,000
21.06.2006 5,64,000
01.07.2006 8,12,000
05.07.2006 6,00,000

Due date are inclusive of days of grace, Bills are discounted @ 9% Pa

Q3. From the Following data calculate rebate on Bills Discount as on 31.3.2019
Date of Bill Amount Rs Period (including Rate of Discount
days of grace)
15.1.2019 6,55,000 05.06.2019 10%
10.2.2019 8,70,000 12.06.2019 12%
28.2.2019 9,20,000 25.06.2019 11%
20.3.2019 11,30,000 06.07.2019 10%
Q4. .
Bill discounted (Rs) 1,85,06,000
Rebate on bill discounted (Rs) (01.04.2019) 3,21,600
Discount Received (Rs) 11,56,300
From the Following data calculate rebate on Bills Discount as on 31.3.2020 and give necessary
journal entries

Amount Period (inclusive of 3

Rate of Discount
Rs days of grace)

19,65,000 01.06.2020 10%

26,10,000 15.06.2020 12%

27,60,000 28.06.2020 11%

33,90,000 08.07.2020 10%

Q5. From the Following data calculate Rebate on Bills Discount as on 31.3.2018
Date of Bill Amount Period Discount %
(Months
24th Feb 2019 3000 2 12
th
28 February 2019 5000 3 12.5
th
18 April 2019 2500 1 12
Q6 Ind Bank Ltd. gives you the following details as on 31.03.2014
Bill No Date of Bills Amount Period of Bill Discounted on
105 21.02.2014 500000 3 Months 28.02.2014
109 28.02.2014 400000 3 Months 20.03.2014
148 10.03.2014 300000 2 Months 23.03.2014
160 15.03.2014 700000 2 Months 30.03.2014
The bills were discounted @12% pa. You are required to find out the amount of Rebate on Bills
Discounted. Also pass journal entries for discount and rebate.

Ans: 54, 61,43,48, 8877, 8022.4241, 11046

Q1. From the following information, find out the amount of provision required to be made in the
profit and loss account for the Krishna Bank year ended 31-3-2020

Advances Rs. Lakhs

Standard Asset 8000
Sub- standard Asset 3500
Doubtful Assets for:
Up to one year 560
One to two years 280
Two to three years 190
More than 3 years 90
Loss Asset 55
Q2. From the following information, find out the amount of provision required to be made in
the profit and loss account for the ABC Bank year ended 31-3-18

Advances Rs. Thousand

Standard Asset 1600
Sub- standard Asset (secured) 700
Sub- standard Asset (Unsecured) 300
Doubtful Assets for:
For one year 112
For two and Three years 56
For More than 3 years 38
Loss Asset 18
Q3. From the following information find out the amount of provisions to be shown in the Profit
and Loss account of Swarajya Commercial bank

Amount (Rs.)
Assets in Lakhs
Standard Asset 10000
Sub- standard Asset 6400
Doubtful Assets for:  
For one year 3200
For two years 1800
For Three years 900
For More than three years (secured by
mortgage of Plant Rs.600 Lakhs) 1100
Loss Asset 3000

Q4. From the following information, find out the amount of provision required to be made in the
profit and loss account for the Smart Bank year ended 31-3-19

Advances (Assets): Rs. Lakhs

Standard Asset 20,000
Sub- standard Asset 16,000
Doubtful Assets for:  
For one year (secured Against the
6,000
Machinery Rs. 4000 lakhs)
For two and Three years (Realize
4,000
Value of the security is Rs. 2500)
For More than 3 years 2,000
Non-Recoverable Assets 1,500
Banking Company Final Accounts
Q1. From the following information, prepare the Profit and Loss A/c of Krishna Bank Ltd. for
the year ended 31st March 2018

Particulars Amount
Interest on Loan
5,180,000
Interest on Fixed Deposits
5,500,000
Rebate on Bills Discounted
980,000
Commission Income
164,000
Establishment Charges
1,080,000
Discount on Bills Discounted (net)
2,920,000
Interest on Cash Credits
4,460,000
Interest on Current Account
840,000
Rent and Rates
360,000
Interest on Overdraft
3,080,000
Director’s Fees
60,000
Auditor’s Fees
24,000
Interest on Saving Bank Deposits
1,360,000
Postage and Telegrams
28,000
Printing and Stationery
58,000
Sundry Charges
34,000

Bad debts to be written off amounted to Rs. 8,00,000

Provision for taxation may be made at 55% of net profit. Show your workings
Q2. From the following information, prepare the Profit and Loss A/c of Yes Bank Ltd. for the
year ended 31st March 2018
Particulars Amount Particulars Amount
Interest on Loans Interest on temporary Overdraft
3,000,000 in current account 30,000
Interest on Fixed Deposits Interest on saving Deposits
2,750,000 87,000
Commission Postage
10,000 10,000
Exchange and Brokerage Printing and Stationery
20,000 20,000
Salaries and Allowances Rent and Rates
150,000 15,000
Discount on Bills Discounted Taxes and Licenses
( Gross) 152,000 10,000
Interest on Cash Credit Audit Fees
240,000 10,000
Sundry Expenses
10,000

Other Information:
1. Rebate on bills discounted to Rs.30,000.
2. Salary to Managing Directors Rs.30,000
3. Provision for Bad Debts Rs. 40,000
4. Provision for Income Tax to be made for Rs. 34,000
5. Interest of Rs. 4,000 on Doubtful Debts (loan and Advances) was wrongly credited to
interest on loan account
Q3. From the following information, prepare a Balance Sheet with necessary Schedules of the
Citizen Bank Ltd. as on 31st March 2018
Amoun Amount
Particulars t (000) Particulars (000)
Share Capital of 100 each
Cash in hand 240 Rs.50 called 1,000

Cash with RBI 400 Statutory Reserves 2,600

Cash with other Banks 600 Dividend Equalization Reserve 400

Money at call and Short Notice 100 Profit and Loss Account 1,000
Investment Government
Securities 300 Current Accounts 160

Share and Debenture 100 Saving Deposit Accounts 600

Gold 700 Fixed Deposit Accounts 1,600

Loan 3,780 Recurring Deposits 400

Bills Discounted 600 Borrowings 1,200

Fixed Assets 4,000 Branch Adjustment 40

Fixed Assets acquired in
satisfaction of claims 120 Unclaimed Dividend 20

Advance Tax 40 Proposed dividend 60

Tax Deducted at sources 20 Provision for Taxation 60

Accrued Interest 140 Unexpired Dividend 100

  - Bills Payable 80

  - accrued Interest 80

  - Provision for Depreciation 1,600

  - Unpaid Dividend 100

  - Reserve for Doubtful Debts 40

Total Total
 11,140 11,140
Other Information:
1. Bills for collection Rs. 2,00,000
2. A Claim by employees for bonus amounting to Rs. 15,000 is pending award of arbitration
3. Liability for partly paid Investment Rs. 20,000
4. Guarantees given on behalf of constituents Rs.25,000
Q4 Following are some of the balances as on 31st March, 2018 of Vaibhav Bank Ltd

Particulars Debit Credit

Equity Shares of Rs.100 each Rs.
50 paid up   800,000

Profit and Loss A/c on 1-4-2017   320,000

Current Accounts   2,728,000

Saving Deposit Accounts   3,120,000

Fixed Deposit Accounts   2,052,000

Directors Fees 36,000  
Audit Fees 8,000  
Furniture ( Cost Rs.8,00,000) 696,000  

Interest and Discount   1,680,000

Commission Exchanged and
Brokerage   800,000

Reserve Fund   280,000

Stationery and Printing 32,000  
Rent and Rates 68,000  
Building ( Cost Rs.24,00,000) 1,800,000  
Salary 560,000  
Law Charges 12,000  
Cash in hand 128,000  
Cash with RBI 2,800,000  
Cash with other Banks 2,600,000  
Investment Government Securities 960,000  
Overdrafts, Loans, Cash Credits 2,400,000  
bill discounted and Purchase 1,120,000  
Interest Paid 1,200,000  

Borrowing from Bank   1,600,000

Branch Adjustment Account   1040000
Total 14,420,000 14,420,000
Other Information:
1. The Bank has accepted on behalf of the customer bills worth Rs. 6,00,000
2. Rebate on Bills Discounted Rs. 44,000
3. Provide Depreciation on Building 10% and Furniture 5% on cost
4. Provide Rs. 12000 for bad debts and doubt full debts
Q5. On 31st March 2002, the following balance stood in the book of New Bank Ltd. after
preparing Profit and Loss account.

Particulars Amount Particulars Amount

Share Capital 35,00,000 Reserve Fund
24,50,000
Fixed Deposit 66,50,000 Saving Bank Ac
21,00,000
Current Assets 5,60,00,000 Money at Call and Short Notice
2,10,000
Investment 2,10,00,000 Profit and Loss Ac (Cr)
14,70,000
Dividend for 1999 3,50,000 Land and Building
74,45,000
Cash in hand 4,20,000 Cash with RBI
1,05,00,000
Cash with others Banks 91,00,000 Borrowing from others Banks
44,00,000

Bills Discounted and Purchased 42,00,000 Sundry Creditors

2,10,000
Bills Payable 56,00,000 Unclaimed Dividend
2,10,000
Acceptance on Behalf of
Bills for Collection 9,80,000
Customers 14,00,000

Net Profit for the year 16,80,000 Loan, Overdrafts and Cash Credit
4,90,00,000
The net profit is after deducting provision for Bad debts Rs. 210000, tax provision of Rs. 700000
and rebate on bill discounted Rs. 35000. Prepare Balance Sheet.
Q6