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Solution:

Example no.4

Trading A/C of Mamta Fashions Pvt.Ltd. for the year ended 31 st March2006 .

Particulars Amount

Rs.

Particulars Amount

Rs.

To Opening inventory 1,12,500 By Sales 31,20,000

To Purchases 27,00,000 By Closing inventory 1,35,000

To Wages 86,970

To Gross profit c/d 3,55,530

32,55,000 32,55,000

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

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Particulars Amount

Rs.

Amount

Rs.

Particulars Amount

Rs.

Amo

R

To Salaries 90,338 By Gross Profittransfers fromtrading A/C

3,55,53

To interest on term loan

Add: Interest due 27,000

27,000 54,000

To General Expenses 10,252

To Depreciation on:

Premises

Plant & Machinery

36,080

69,300 1,05,380

To Bad debts (T.B)

To Bad Debts (Adj.)

To Bad Debts Reserve(Adj.)

To Bad Debt Reserve(T.B)

3,165

3,000

-

- 6,165

Preliminary Expenseswritten off

15,00

Provision for income Tax 30,763

To Net Profit c/d 57,132

Total 3,55,530 Total 3,55,53

To Transfer to GeneralReserve

2,900

To Proposed Dividend:

*Preference Shares

*Equity shares

To Dividend DistributionTax @ 16.995% of

Proposed dividend

10,000

36,000 46,000

7,818

Balance as on 1 st April2005

3

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

Liabilities Amount

Rs.

Amount

Rs.

Assets Amount

Rs.

Amount

Rs.

1.Share Capital 1.Fixed Assets:

Authorized :

1,00,000 Equity Sharesof Rs.10 each

1000 10% PreferenceShares of Rs.100 each

10,00,000

1,00,000

Land

Premises:

Less: Depr. @ 10%

Plant & Machinery

Less: Depr. @ 14%

3,60,800

36,080

4,95,000

69,300

87,500

3,24,720

4,25,700

Issued, Subscribed,Called-up and Paid up:

30,000 Equity Sharesof Rs.10 each

1,000 10% PreferenceShares of Rs.100 each.

3,00,000

1,00,000

2.Investments:

2.Reserves &Surplus:

3. Current Assets,Loans and

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General Reserve as on1/04/05

Add: Created duringthe year

Surplus in P& L A/C

37,500

29,00

40,400

39,789

Advances:

Current Assets:

Inventory

Debtors

Add: Bills ReceivableDishonoured

Less: Provision for Doubtful Debts

Bills Receivable

Less: BillsDishonoured

1,06,050

25,000

1,31,050

3,000

58,875

25,000

1,35,000

1,28,050

33,875

3.Secured Loans:

Term loans from DelhiFinancial Corporation

4,50,000

Cash in hand

Current AccountABN AMRO Bank

4,725

45,500

4.Unsecured Loans

5. Current Liabilitiesand Provisions:

A. CurrentLiabilities:

Creditors

Bills Payable

Central Sales TaxPayable

Interest Due on TermLoan

83,000

55,500

10,800

27,000

4. MiscellaneousExpenditure

Preliminary Expenses

Less: 1/5 th Written off 75,00

1,500 6,000

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B. Provisions:

Income Tax

Proposed Dividend

30,763

46,000

Dividend DistributionTax @ 16.995% of Proposed dividend

7,818

Total 11,91,070 Total 11,91,070