Chapter 3 tinancial Stat of companies

s chapter kg Focus sire balance sheet tally Karna

nahi hai Ye humko Presentation of Financial stat

as Per Law with Proper Disclosure Par Focus

Kyuki Act ha Object sire 131s ko tally

Karna hai

he Karna nahihai Uski understanding bhi develop

Karna Mai Kyuki Fin Statements Ke Reader sirf CAY
commerce he student Nahi hai Koi bhi User hosakta hai
Main Users are Investors Bankers Suppliers Customer Govt
employees Public
in Fin Stat Ke users sanitime Par Sahi inform lessice

So Financial Statement Must Provide

Relevant inform ii Comiarable
Ii Reliable information IV Understandable
all the above are Qualitative characteristics
OF Financial statement
Law ki requirement hai ki humko Proper
Disclosure deng hoga so that Reader Ian take
informed decision
Such information must be Presented in
uniform and standard manner Prescribed

by Comp Act As so that it can be Used For

interfirm Comparision

in 11th 12th
P L ale
or or
Sch It

to salary toe
Income

Expenses

1
Net surplus
 Company's Act
Schedule II

Division I Division I Division I

Compliny follows N BF C
com
any follow
A S Ind Ag Flash F
Class
Inter Final

I Financial statement of comp Division I

Part I Balance sheet affon Givendate

2 Part I statement of P L for the yearended
3 Cash Flow statement alagsechapter
54 Notes to Accounts

I Dividend declaration Rule

Schedule 3 Division I Part II

Vidhyoday education Pvt ltd

statements Potter
Shio Shi Particular
Income
IE iEti ti
9 Revenue from operation
b other income

total income xx

I Expenses
a cost of mat Consumed 3
b Purchase ofstock intrade 4
c change in Inventory of c 0.7 OP stock
F Goods WIP stockin 5 t OP Clo stock
trade
d Employeebenefit exp 6
e Interest Fin thy 7
F Depreci amortis 8

g other exp 9

total EXP
I
si sini Particular Nits s s
III Net Profit before
Exceptional Extra E II
ordinary items
1 Exceptional items I
xp

Profit before extra

xx
ordinary item
EExtra ordinary items
I fix
Net Profit before tax VI
tax expense's
VI
current tax
Deferred tax A L x

Profit after tax

From
continuing operation
schedule
Division 1 Part
Ltd

Statement of P L for the year ended 31131

Note Car Year Previs
Particular year
Income
9 Revenue from operation I xx
b other income 2 x x

total income I

Expenses
Cost SEET 33
a it gsumed
b Purchases of stock intrade 4
C change in Inventories of
Stock in trade Finish 5
ed goods WIP
Edis
d Employees benefit expenses 6
Do not in lades directorRemunv
e Finance cost 7
F
Det jation ftp.t.jyton 8
g Other operating exp S

III x

III Trofit before exceptional

Extra ordinary item
 Note Car Year
4 15
V Exceptional items xx

profit before extra

items
ordinary tax
Extra ordinary items ex

Profit before tax

in t.EEiEfe fnsfx
24 21
2 Deferred tax 3
Profit loss For the Period
From continuing olerations
Profit loss fromDiscontinuing
operation before tax D
1 Tax Expenses ofdiscontinuing
operation
11 Profit loss From Discontinuing xx
Operation after tax
111 Profit 10557 For thePeriod

re

Diluted EPs
 ES n s a ement of P L

Meaning Special Requirement Examples

Revenue From operation Sales of Product or

service
Principal or AncillaryRevenue Grant Donation
specially sec 80mi
generating Activities F companies otheroperatingRevenue

then income interestincome

Dividend
Other than revenue From operation Gain loss on sale 5
Never include
any Negative expenses of Assets
Gain loss on sales
of investments
transfer fee sec
Discountincome
Sales of scrap

Cost of material consumed Purchaseof raw

it means only Rawmaterial consumed material is adjusted
with OP Clo stock
Disclosure of Opening closing Raw of Raw material
Material is not required
Ply wood used For
Furniture
Store spares
consumed
Meaning Special Requirement Examples

Purchase of stock in trade Purchase of

stock in trade
it includes
only goods Purchased For Resale
Change in inventory

Diff inOp I clo stock of Stock in Change in inventory

trade W I P Finished goods
Disclosure of opening closing stock
is not required
it will be zero if opening closing
are same Exteited to be same
II interest
Finance cost Chg
amortization of
cost incurred to
arrange borrowing
Exch Loss on
Foreign currency
borrowings

Employee benefit expenses Salary wages

Contribution to P.F
Directors are not emitoyees
ESOP ESPP EXP
Staff welfare
1 95 EE tir

Ap YiIs
Meaning Special Requirement Examples
Rent
other expenses
electrixity
operating extensest Insurance
Rates taxes
Consumable in
office
Preliminary exe
41W Comm
off
W
Discount given
Bad debts Provi
For Bad debts
Directors Reman

Exceptional extra ordinary items Abnormal gain or

Loss
2.51 Litigation
settlement exp
EYES Retrospective
Law e xp

Depreciation amortization on tangible

Asset

Amortization of
intangible a w
Patents
 AgarTB hum P L se Pehlebanatehairs to TBmain OPstock
agar TB hum PICkebaadbanatehaim.to TB main Clo sto

eg Prepare stat of Profit loss Extract IT 13

Debit credit
RFO Sales of goods service 50 00,000
come Stockrato arterial 25000

FE.intIEEiIneagon
stock in
trade 16,000
Cmcc Purchase Raw material 15,00900
par c stock in trade 5,00,000
EB.E wages 10 00,000
Salary
contribution to DFund 400,000
Depreciation 1.50.000
B nint Goodwill wish
1.00.000
I Rent income 2,05000
Profit on sales of Machine 2150,000

Carriage outward 30,000

E Carriage inward 40,000
Advertising 45,000
of a Dividend intome 50,000
Interest 75,000
Loss by Fire 50,000
PDD Expenses 25,000
Closing Stock are R.m 100,000 WIP 50,000 stock in trade 60,000
Finished gotta 000
 Schedule II Part
t.B.CM IPI Itd
Stat of PRC For the 4 ended 31.3.1024
Sr Sr Partic Estant
Nyt
Income
a Revenue from
Operation 50 100,000
b other income I 5 00,000
total inime A 55.00.000
2 EExpenses
a cost of material
consumed 2
b Purchase of stock in trade
Finis
I
a change in inventory of
hedgoods WIP 3
stork intrade 70,000
d Employee benefit exp 4 14 00,000
e Finance cost 75,000
F Depreciation Amoritisation 5
2.50.000
g other expense 6 1140,000
total exp B 3720,000
3 Net Profit before extraordiitems A B
4 Extra ordinary item 105517Five 17,85 8
5 Net Profit After tax 17,30 000
Earning Per share
Basic
Diluted
 Notes to Alc
Note No Particular Amt

Other Income
Rental Income 200,000
Profit on sales ofmachinery 250,000
Divid Received 50,000
5,00 000
2 Cost of material consumed
OP stock of Raw material 25,000
1 1 Parthase of Raw material 15.00.000
C 1 10 stock of Raw material 4.00.000
14 25,00
3 Change in inventory
OP Stock Fin goods 40,000 890
III intrade
I I closing stock Efffoots 58 0
stock in trad Goooo 150,00
70,000
4 Employee benefit exp
salary Provwages
Fund
10,00900
contribution
400,00
14,00 00
Note No Particular Amt

5 Depreciation amortization
Depreciation teng FA 150000
amortization of
Ihtang 10000
2.50.00
6 other ex
carriage olw 30,000
carriage 11W
Advertisement 4 88
P D D
25,00
140,00
Question Prepare stat of P L For Ye 2023 24

Itd had 10,000 Equity shares of Elo each

Sales of goods 30.00.000

Sales of service 500,000

Purchase of Raw material 700,000

stock of Finished goods 50,000
i Raw material 40,000
Salary wages 300,000
Director Sitting Fee 30,000
Gain on sales of Digitalcurrency 40,000

C S R Expenses 25,000
Depreciation of PPE 30,000
Dividend income
700,000
Rental exp 40,000
interest e xp 90,000
Income in 50,000
survey
Auditor's Remuneration 80,00
Discount received 6000
Discount exp 18,000
transfer Fee 5,000
Loss due to Fire
PDD exp 6000
DDD Liability 6,000
Adjustment Closing stock
3g
FHished
goods 80,000
tax Rate 30

Fin cost
12 F O
7
I

RM c m.cc
I
2 IE

op ision

CME

How dare
you
As Per Company's Act 2013 PPE 9k is to be maintained
at cost only i.e Depreciation is to be accumulated
in Prov For dep ape or accum depreciation ale
L
chg.toP
Entry Depreciation akar
to PPE Provi Fordeer 9k

each year
Depreci will be accumated here in Prov Farder at

PPE
sT3
IIs.g byBalcid
1.05.70 t.it 0
179 3743400
to 922600 by Petre 32
5
35,77650

Assets disposal
to PPE 165,750 by Provi Fordeer 24865
to P L alt 1915 bymisc Rec ale 142800

Ihc

Misc Receipt
to bank 14280
9 4,192,800by
 Sch 111 Part I

statement of P L for 4ended 31 3 2023

9Mt EE
NI
Income
a Revenue From operation 47.22.600
b other income 161465
total income A 4894,065
2 Expenses
a cost of material consumed 2 5907,000
b Finance cost 3 3 52,410
C Depreciation amortis WN
3.57.765
d other Expense
4 665,040

total expenses B 4481215

3 Net Profit before tax a B 6.01.850
4 tax Expenses
car tax 251 152183 1.50.463
Deferred tax
Profit after tax 4,51387
Note Ii Divi declared Proposed by directors will not
be tonsidered in Final ale as it is declared
bymembers in Aam
Ii Revaluatgain on Land is unrealised Profit should be
credited to Revaluation Res as Per A5 10 PPE
 Notes to Alc
vote No Patti any
other income
trans Fee 38250
Discount Received 66,300
Int menvestment 55,00
Profit on sale of PRE 159 15

161,465
2 Cost of material consumed
OP Stork 997250 29.07.000
Har of material 48 86600

3 clos.stockiynI.mn
Finance cost Debenture
L 339150
13260
352,410
4 other
Factory exP 258060
Rates taxes insur 1650205
Repairs 149685
sundry ext 127,50
Selling ext 26520
Director Fee 38250

665,040
 a 11.34 ADVANCED ACCOUNTING

Illustration 4
You are required to prepare a Statement of Profit and Loss and Balance Sheet from
the following Trial Balance extracted from the books of the International Hotels
Ltd., on 31st March, 20X2:
Dr. Cr.
` `
19ᵗʰ Authorised Capital-divided into 5,000 6% Preference Shares

68 of ` 100 each and 10,000 equity Shares of ` 100 each 15,00,000

Subscribed Capital -
18650
5,000 6% Preference Shares of ` 100 each 5,00,000

2506 Equity Capital 8,05,000

4580 Purchases - Wines, Cigarettes, Cigars, etc. 45,800 8000

970 - Foodstuffs 36,200
Wages and Salaries 28,300
2958 I 1
Rent, Rates and Taxes 8,900
1200 Laundry 750
21315 Sales - Wines, Cigarettes, Cigars, etc. 68,400

4020 - Food 57,600

164255
Coal and Firewood 3,290
Carriage and Cooliage 810
22245
c Sundry Expenses 5,840
Advertising 8,360
Repairs 4,250
Rent of Rooms 48,000
Billiard 5,700
Miscellaneous Receipts 2,800
Discount received 3,300
Transfer fees 700

© The Institute of Chartered Accountants of India

 FINANCIAL STATEMENTS OF COMPANIES 11.35

Freehold Land and Building 8,50,000

Furniture and Fittings 86,300

Inventory on hand, 1st April, 20X1

Wines, Cigarettes. Cigars, etc. 12,800

Foodstuffs 5,260

Cash in hand 2,200

Cash with Bankers 76,380

Preliminary and formation expenses 8,000

2,000 Debentures of ` 100 each (6%) 2,00,000

Profit and Loss Account 41,500

Trade payables 42,000

Trade receivables 19,260

Investments 2,72,300

Goodwill at cost 5,00,000

General Reserve 2,00,000

19,75,000 19,75,000

Wages and Salaries Outstanding 1,280

Inventory on 31st March, 20X2

Wines, Cigarettes and Cigars, etc. 22,500

Foodstuffs 16,400

Depreciation : Furniture and Fittings @ 5% p.a. : Land and Building @ 2% p.a.

The Equity capital on 1st April, 20X1 stood at ` 7,20,000, that is 6,000 shares fully
paid and 2,000 shares ` 60 paid. The directors made a call of ` 40 per share on 1st
October 20X1. A shareholder could not pay the call on 100 shares and his shares
were then forfeited and reissued @ ` 90 per share as fully paid. The Directors
declared a dividend of 8% on equity shares on 2 nd April, 20X2, transferring any
amount that may be required from General Reserve. Ignore Taxation.

© The Institute of Chartered Accountants of India

 agar hum Periodic inv system follow Kar

rake hain to humare Paas stock Ka Koi

avail Nahi hota hai
Systematic Record
is case main hum year end Par
stock taking Karte hain our closing
stock ki value determine Karte hain
is case main TB main OP Stock Parch
milegg our Clo stock T B ke neeche
Adjustm main milega

Agar Comp Perpetual inventory system

Follow Kar rahi hai to have
they
systematic inventory records our istiye
ab Comp Stock 9k maintain Karegi
TB main hunko
Hint
a
Adjusted Pur C O 4.5 dikegg
b
Gb Clo stock TB mainaayega
 eg TB
Debtor 10L
Baddest 1L direct the
Provis ForBidest 1 2L

Come Wants to create Provision on

Debtors

Debtors appearing T B is after 13 debt

So calculate Clo Provision Requirement
disently on TIB Debtor

10L 151 150,000

Provision
OP bal
other exp
1.20 L

Clo 1.5L by P L 0.30L Bad debt 1000L

10 15 P DoD 0.30L
1
Rent
iii
 eg TB
Debtor to L
Baddest 1L
Provis Forbidest
2L
1 2L
ICE
D DoD exp 0
P L
0th exp

A Further Bad debt of 50k is to

be recorded with detect
I 0.5L

L
0M
Agar
PDD exp TB main Dikh raha hai
to Iska Mat lab accountant is Saal ke

provision ki entry Kan Chung hai to ab

PDD exp all close Karke usko Pfc
main other exp main add Karkar do

Agar PDD Exp are TIB main Cr side

Dikh 29ha has to hem isico P L main
other exp main Kay denge
 Sch Division t Part I
Ltd B S as an 31131
sr.sr.su MY EYE year
Equity Liabilities
Shareholders fund
9 Share capital xx
b Reservesfsurpins 2
C Money Received against
Share warrent

2 Share application
money Pending allotm

3 Non Current Liab

9 Long term borrowings
b D T Liab
c other Long term Liab
d Long term Provision

a current Liabilities
a short term borrow
b
 so

sr.sr.su Not 9 year

Equity Liabilities
Share holders fund
9 Share capital
b Reserves surplus 2
a share a
Monyrecjiiz.iq
ApplicationmoneyReceived
Pending Allotment
__
Non Current Liab

9 Long termborrowings 4
b Deferred tax Liab Net 5

c other non Car Liab G

d Long term Provision 7

Current Liability
a short term borrowing 8
b trade
Payable 9
From Mt S M E
From others

c Othercur Liability to
Sr Sr sr NY Eui year

d short term Provisions 11

Assets
Non Current Assets
9 Fixed Assets
i PPE IC
ii 13
Intangibles
iii tangible capital WIP
in
intang under development
b Non Current Investm
c Deferred tax Assets
d Non eur Loans advan
e other Non current sie

II Current Assets

9 current Investments
b inventories
c Trade receivable
Sr Sr sr NY Eui year

d Cash cash equv

e short term loansRadu
F Other Current Assets
 otes to AK
I Share capital

Requirement Presentation in Notes

Disclose For each class Authorised share cap xx
Nos Amount Pls
Number amount ofshares Issued subscribed
Called UPcapital
2 Disclose Authorised Subscribed
Nos Amt PIS
Issued Paid UpCapital 1 1 Calls in arrear 1 1

3 Reconciliation statement Paid at share capital

Beginning End

4 Rights Preference ofeach

classof share
5 Details of slit having
more than 51 Shares

6 Disclose the detail of

Shares issued For

consideration otherthan
cash No need todisclose
the source of Bonus
atleast For 5 Years
 2 Reserves surplus 3 Long term borrowings
Capital Reserve xx t can be From Public Bank
Financial institution Directors
Capita Redemp Res Xx
show secured unsecured
security Premium xx
Show nature of securities
Debenture redemep
Show term
tion Reserve of Loan
Show source of Loan Dire for
Revaluation Reserve
E s o P reserve curve mail.it
xx of long
term
Retained earnings Borrowing are to be shown
as short term
borrowings
it can be Negative So excluded from LT
Borrowing
x

4 Deferred tax Liabiab Assets Eg Bonds

Debentures
Show net amount Deposits
IF DTL DTA
Hsside Fixed Deposits
if DTA DTL Deferred Payment Liab

fp Finance lease liability

5 other longtermliability ie cte ffEFa

6 Long term Provision Provision For Retirement Benefits
7 Short term Borrowings 8 trade Payable
Bank overdraft Provide ageing schedule
Loan Repayable on demand 0 12 m
to Related Parties 12 24 m
Fame silent
Deposits 24 3am
Other loan other
Current maturity of LT Provide inform OF Parch
Borrowings alongwith From M 5 M E others
source of Borrowings it also includes
ills Payable

9 other current Liabilities 10 Short term Provision

Accrued interest on Provision For tax
Debentures Borrowings Chet of Advance tax
Deposits etc
Provision for Libilities
Income received in adv
Provision For Warranties
unpaid Unclaimeddivid
Provision For Lawsuits
Applicationmoney for Refund 50 hum haarne basehaing

Unpaid mature Deposit

 Property Plant and equipment
Always show Cost Accumulated depreciation
i i Reconciliation statement

PPE Reconcile Depreciation

OP Cost OP accumulated dep
Addition Deere For the
Deletion
closingbat.CHcost III widpan
assets sold discarded
Closing bat
IF assets is held for sales then show them it 95

Current Assets

Classify them 9s Land Building Plant equipment

Furniture Fittings Vehicle equipments leased Assets

2 IntangibleAssets

aW Brands Copyrights License title miningRights

software
give Reconciliation same as above
3 Non current Investment
Show InvestmentProperty inv in equity Pref Share Gout
Bonds Debenture mutual Fund Partnership Firm
Show basis of valuation cost or fair value
Quoted unquoted Provision Fordecline

4 Long term Loans advance

Capital Advance
Advance to Related Parties
Show details of secured Unsecured etc

15 Other Non Current Assets

LT Receivable say Sale of Plant

security deposit
Give ageing schedule
Show good Doubtful
Show secured unsecured
16 Current investment
Show investment Property investment in equity

Pref Shares Gout bonds Debentures mutual fund

Show basis of valuation cost Fair value

Show Quoted Unquoted Provisions For Decline

17 Inventories

Disclose details of Raw material WIP Finished

goods stock in trade Finishedgoods

Stores
Loose tools if it meet defination of PPE then it
is shown as PPE
Show mode of valuation FIFO w Aug

18 Tradereceivable
Give ageing schedule generally given 6 month or more

it also includes Bills Receivable

Show secured unsecured

Reduce it by Provision For Doubtful debt
19 Cash cash equivalent

Show Non Schedule bank separately

Include cash Bank cheque in hand

margin money
Bank deposit 0 12 months

20 Short term loans advances

Loans to Directors
Loans to Sta Ff
Small advance

secured unsecured

21 Other car Assets

Accrued tht