Question No.

1 Following is the Balance sheet of Agri Tech Limited as on 31 st

March, 2022 ( Rs.in Lacs )
Tangible Fixed Assets 210
Less: Depreciation 60 150
Intangible Assets 15
Less: Amortization 5 10
Non Current Investments( Investment in 65
Subsidiary)
Current Assets
Stock of Raw Material 32
Trade Receivables 35
Short Term Investment 21
Cash at Bank 42
Total Assets 355
Equity Capital of Rs.10 each 80
Reserves & Surplus 140
Non Current Liabilities
10% Debentures 90
Current Liabilities
Trade Payables 45
Total Capital & Liabilities 355

In the year 22-23 Company received Rs.35 lacs from customers of last year
( Trade Receivables) and paid Rs.45 Lacs to the suppliers of last year ( Trade
Payables ).
During the year 22-23, Company has achieved Sales of Rs.340 Lacs out of which
company has not yet received Rs.45 Lacs from customers.
Purchase of Raw Material Rs.172 Lacs out of which Rs.30 Lacs are not yet paid to
the suppliers, Employee Cost paid Rs.16 Lacs and other operating expenses paid
Rs.116 Lacs. Interest paid on Debentures Rs.9 Lacs.
During the year, Company has sold its entire investment in subsidiary for Rs.46
Lacs. At the end of the year, Company issued 1 Lac equity shares of Rs.10 each to
its employees and collected Rs.10 lacs in Bank.
On 31st March, 2023 Raw material remaining in stores is Rs.22 Lacs, Depreciation
charged is Rs.15 Lacs and amortization of Intangible assets is Rs. 5 lacs. Prepare
Profit & Loss Account for the year 2022-23 and Balance Sheet as on 31st March,
2023.
Example 2
Neha Electronics Limited started its manufacturing activities in electronic goods in
April, 2022. Company issued 2 Lac Equity shares of the face value of Rs.10 each at
Rs.25 per share and received Rs.30 Lacs in its bank account. Company has also
issued 5,000 Convertible 10% Preference shares of Rs.100 each and received Rs.5
Lacs in its Bank account.
Company has purchased Tangible Fixed Assets of Rs.35 Lacs and Software of Rs.2
Lacs. Company purchased raw material of Rs.19 Lacs out of which amount not yet
paid to the suppliers is Rs.3 Lacs, Purchase of stock in trade Rs.2 Lacs , Employee
Benefit Expenses Rs.4 Lacs and other operating expenses Rs.9 Lacs ( amount not
yet paid Rs.1 Lac ).
Company has achieved sales of Rs.50 Lacs out of which amount of Rs.6 Lac is not
yet received from customers.
At the end of the year raw material remaining in stores is of Rs.1 Lac, Depreciation
is charged at 5% and software amortized at 25%.
At the end of the year, based on past data available , a provision at 2% is made
against warranty and provision of Rs.2 Lac is made against Trade Receivables.
Company purchased brand “ Bijali” by paying Rs.5 Lacs. Company has started
construction of another factory building and till 31 st March, 2023, company has
spend Rs.7 Lacs on construction.
Prepare Profit & Loss Account for the year 2022-23 and Balance Sheet as on 31st
March,2023 assuming that provision for tax is made at 25%
Example 3 Following is the Balance sheet of Finotex Engineering Limited as on 31 st March,
2022 ( Rs.in lacs )
Tangible Fixed Assets 100
Less: Depreciation 20 80
Intangible Assets 20
Less: Amortization 5 15
Non Current Investments 40
Current Assets
Stock of Raw Material 20
Stock of WIP 5
Stock of FG 10
Trade Receivables 35
Cash at Bank 12
Total Assets 217
Equity Capital of Rs.10 each 50
Reserves & Surplus 90
Non Current Liabilities
10% Debentures 40
Current Liabilities
Trade Payables 37
Total Capital & Liabilities 217

In the year 22-23 Company received Rs.35 lacs from customers of last year ( Trade Receivables)
and paid Rs.37 Lacs to the suppliers of last year ( Trade Payables ).
During the year 22-23, Company has achieved Sales of Rs.100 Lacs out of which company has
not yet received Rs.30 Lacs from customers.
Purchase of Raw Material Rs.60 Lacs out of which Rs.12 Lacs are not yet paid to the suppliers,
Employee Cost paid Rs.6 Lacs and other operating expenses paid Rs.10 Lacs. Interest paid on
Debentures Rs.4 Lacs.
On 31st March, 2023 Raw material remaining in stores is Rs.17 Lacs, WIP Rs.7 Lacs and Finished
goods Rs.11 Lacs. Depreciation charged is Rs.10 Lacs and amortization of Intangible assets is Rs.
5 lacs. Prepare Profit & Loss Account for the year 2022-23 and Balance Sheet as on 31st March,
2023 assuming corporate tax paid at 25%.