12th | Ts grewal 2021-2022 Question 6 to 10 | ch1 Financial Statement of a Company

Analysis Of Financial Statements Ts Grewal 2021-2022

for Class 12 Commerce | Accountancy

Chapter 1 - Financial Statements Of A Company

 

Page No 1.59:

Question 6:

A company has an opening credit balance in Surplus, i.e., Balance in Statement of Profit and Loss of `1,00,000. During the year, it earned a profit of `75,000. It decided to transfer `15,000 to Debentures Redemption Reserve (DRR) and also proposed to pay dividend of `25,000.

How will be the appropriations shown in the financial statements?
 

Answer:

Extract of Balance Sheet

as at …..

Particulars

Note No.

Amount

( `)

I. Equity and Liabilities

 

 

1. Shareholders’ Funds

 

 

a. Share Capital

 

 

b. Reserves and Surplus

1

1,50,000

   2. Share Application Money  Pending Allotment

 

 

   3. Non-Current Liabilities

 

 

   4. Current Liabilities

 

 

   a. Short-term Provisions

4

25,000

Total

 

 

 

 

 

 

NOTES TO ACCOUNTS

                                                                           

Note No.

Particulars

Amount

( `)

1

Reserves and Surplus

 

 

(a) Surplus, i.e. Balance in Statement of Profit and Loss

1,00,000

 

 

  Add: Profit for the year

75,000

 

 

  Less: Appropriations

 

 

Transfer to Debenture Redemption Reserve

(15,000)

 

 

Proposed Dividend

(25,000)

1,35,000 

 

(b) Debenture Redemption Reserve

 

 

      Transferred from Surplus i.e. Balance in Statement of Profit and Loss

15,000

 

      Total (a + b) [to be Shown in Balance Sheet against Reserves and
      Surplus]

1,50,000

4

Short-term Provisions

 

 

Proposed Dividend

25,000

 



Page No 1.70:

Question 7:

State giving reason whether Trade Receivables are classified as Current Assets or Non-current Assets in the Balance Sheet of a Company as per Schedule III of the Companies Act, 2013 in the following cases.   

 

 

 

 

Case

Operating Cycle Period (Months) 

Expected Realisation Period (Months)

 

 

 

1

10

11

2

10

12

3

10

13

4

14

13

5

15

16

 

 

 

 

 

Answer:

 

Case

As Current Assets or Non- Current Assets

Reason

1.

Current Assets

Expected receipt is more than operating cycle but receivable within 12 months.

2.

Current Assets

Expected receipt is more than operating cycle but receivable within 12 months.

3.

Non- Current Assets

Expected receipt is more than operating cycle and receivable after 12 months.

4.

Current Assets

Expected receipt is less than operating cycle.

5.

Non- Current Assets

Expected receipt is more than operating cycle and receivable after 12 months.

 



Page No 1.70:

Question 8:

State giving reason whether Trade Payables are classified as Current Liabilities or Non-current Liabilities in the Calance Sheet of a Company as per Schedule III of the Companies Act, 2013 in the following cases:

Case

Operating Cycle Period (Months) 

Expected Payment Period (Months

1

10

11

2

10

12

3

10

13

4

14

13

5

15

16

 

 

 

 

 

 

Answer:

Case

As Current Liabilities or Non- Current Liabilities

Reason

1.

Current Liabilities

Expected payment is more than operating cycle but payable within 12 months

2.

Current Liabilities

Expected payment is more than operating cycle but payable within 12 months

3.

Non- Current Liabilities

Expected payment is more than operating cycle and payable after 12 months

4.

Current Liabilities

Expected payment is less than operating cycle

5.

Non- Current Liabilities

Expected payment is more than operating cycle and payable after 12 months

 



Page No 1.61:

Question 9:

Under which head and how are the following items shown in the Balance Sheet of a company under Schedule III:
(i) Calls-in-Arrears;  (ii)  Share Application Money Pending Allotment; (iii) Unpaid Dividend; and (iv) Dividend not paid on Cumulative Preference Shares?

 

Answer:

 

Items

Head

Disclosure

 Calls-in-Arrears

 Shareholder’s Funds

 It is shown as a deduction from
 Subscribed Capital shown as
 ‘Subscribed but not fully paid’
 under Shareholder’s Funds

 Share Application Money
 Pending Allotment

 Share Application Money
 Pending Allotment

 It is shown as a separate line item

Unpaid Dividend

 Current Liabilities

 It is shown as ‘Other Current
 Liability’ under Current Liabilities

 Dividend not paid on Cumulative
 Preference Shares

 Contingent Liabilities and
 Commitments

 It is shown as Contingent
 Liabilities and Commitments in
 Notes to Accounts

 



Page No 1.61:

Question 10:

Under which main head and sub-head of Equity and Liabilities part of the Balance Sheet are the following items classified or shown:
 

(i)   Bonds; 

(ii)   Debentures

(iii) Public Deposits;

(iv)   Capital Redemption Reserve;

(v)  Forfeited Shares Account:

(vi)    Sundry Creditors; and 

(vii) Interest Accrued but Not Due on Debentures?

 

Answer:

 

Items

Main head

Sub-head

 Bonds

 Non-Current Liabilities

 Long Term Borrowings

 Debentures

 Non-Current Liabilities

 Long Term Borrowings

 Deposits

 Non-Current Liabilities

 Long Term Borrowings

 Capital redemption Reserve

 Shareholder’s Funds

 Reserves and Surplus

 Share Forfeiture Account

 Shareholder’s Funds

 Subscribed Capital under Share Capital

 Sundry Creditors

 Current Liabilities

 Trade Payables

 Interest Accrued but not due on
 Debentures

 Current Liabilities

 Other Current Liabilities