Exercise:

Q. 1 Following is the summary Balance Sheet of Ajantha Ltd. as on 31st March, 2022.

Liabilities Amt. (₹) Assets Amt. (₹)

Equity Share Capital 1,95,000 Cash in hand 7,500

10% Preference Share Capital 1,00,000 Cash at bank 45,000

9% Debentures 1,25,000 Preliminary expenses 10,000

General Reserves 30,000 Goodwill 50,000

Capital Reserves 25,000 Building 1,50,000

11% Bank Loan 50,000 Investment (long-term) 1,00,000

Creditors 62,500 Furniture 1,25,000

Bank Overdraft 67,500 Plant & Machinery 1,50,000

Provision for Tax 70,000 Debtors 75,000

Outstanding Expenses 15,000 Prepaid Expenses 25,000

Profit & Loss A/c 70,000 Stock 1,00,000

Depreciation Provision 40,000 Calls in arrears (equity) 5,000

Commission on issue of shares 7,500

8,50,000 8,50,000

Present the above Balance Sheet in vertical form & show the following:

1. Net worth 2. Borrowed Fund 3. Capital Employed

4. Net Block 5. Working Capital 6. Fictitious Assets

Q. 2 The following balances appear in the books of M/s. Stevens & Bros. at 31st March,
2022 You are required to prepare a Balance Sheet in a form suitable for financial analysis.

Liabilities Amt. (₹) Assets Amt. (₹)

Capital 1,60,000 Cash & Bank 12,000

Profit & Loss (Cr. balance) 32,000 Land & Building (at cost less 80,000
depreciation)

General Reserves 28,000 Prepaid Expenses 20,000

Trade Creditors 16,000 Stock 60,000

Term Loan from Bank 70,000 Debtors 36,000

Bank Overdraft 36,000 Preliminary Expenditure 6,000

Provision for Tax 32,000 Plant & Machinery (at cost less 1,04,000
depreciation)

Marketable Investments 20,000

Advance Payment of Tax 36,000

3,74,000 3,74,000

Q. 3 The following balances are extracted from the financial statements of Jagga Jasoos Ltd.

Particulars Amt. (₹) Particulars Amt. (₹)

Bank Loan 1,00,000 Preliminary Expenses (not 12,500

written off)

7% Preference Share Capital 2,50,000 Closing Stock 2,00,000

(₹100)

Investments 1,25,000 12% Debentures 2,50,000

Trade Receivables 2,00,000 Bills Payables 50,000

Trade Payables 1,50,000 Land & Buildings 5,00,000

Goodwill 1,25,000 Equity Share Capital (₹10 5,00,000

each)

Bills Receivables 1,37,500 Bank Overdraft 75,000

Plant & Machinery 3,00,000 Cash & Bank balance 37,500

Profit & Loss A/c (Cr. Balance) 2,00,000 Furniture 2,00,000

Unclaimed Dividend 10,000 General Reserves 2,12,500

Prepaid Expenses 25,000 Advance Tax 1,00,000

Provision for Tax 1,15,000 Proposed Dividend 50,000

You are required to prepare a Balance Sheet in vertical form suitable for analysis.
Q. 4 Following are the balances as on 31st March, 2021 in the books of accounts of
Darjeeling Tea Products Ltd. You are required to prepare a vertical Balance Sheet from the
same.

Particulars Amt. (₹) Particulars Amt. (₹)

TDS - Staff Salaries 50,000 Calls in arrears 20,000

Share Issue Expenses 40,000 Profit & Loss A/c (Cr. Balance) 7,70,000

Land & Building 10,00,000 Patents 1,00,000

10% Debentures 6,00,000 Stock 8,70,000

Trade Investment 4,00,000 Debtors 18,50,000

Creditors 17,60,000 Equity Share Capital 10,00,000

Plant & Machinery 7,40,000 Bank Overdraft 8,40,000

Q. 5 Following is the Balance Sheet of Bahana Banao Ltd. as at 31st March, 2022.

(all figures are in ‘000s)

Liabilities Amt. (₹) Assets Amt. (₹)

Equity Share Capital 2000 Trade Investments 800

Dividend Equalization Reserves 280 Patents 120

General Reserves 440 Land & Building (Cost) 1280

Profit & Loss A/c 760 Plant & Machinery (Cost) 2600

6% Debentures 1000 Cash & Bank Balance 352

Bank Overdraft 600 Closing Stock 1240

Sundry Creditors 840 Sundry Debtors 888

Unpaid Dividend 40 Bills Receivables 120

Bills Payable 240 Short term deposit with 120
customers

Provision for Tax 680 Underwriting Commission 240

Provision for Depreciation: 1000 Preliminary Expenses 120

Land & Building 200
Plant & Machinery 800

7880 7880

Present the above balance sheet in vertical form suitable for the purpose of analysis.
Q. 6 Balance Sheet as on 31st March, 2022

Liabilities Amt. (₹) Assets Amt. (₹)

Share Capital 15,00,000 Goodwill 2,50,000

Capital Reserves 3,000 Land 2,58,000

General Reserves 2,40,820 Premises 3,00,000

Leasehold Redemption Fund 85,000 Plant 4,68,790

Profit & Loss A/c 37,554 Furniture 17,150

5% Debentures 3,15,000 3% G.P. Notes 1,42,800

Sundry Creditors 1,47,800 Stock 3,93,540

Bills Payable 1,50,000 Debtors 4,07,884

Provision for Taxation 50,000 Cash & Bank 2,40,560

Advance Tax 47,350

Preliminary Expenses 3,100

25,29,174 25,29,174

Rearrange the above Balance Sheet in a form suitable for analysis & calculate the following:

a. Current Assets b. Fixed / Non-Current Assets c. Total funds

employed
d. Quick Assets e. Long term borrowings f. Secured loans

g. Intangible Assets h. Proprietor’s Funds i. Owed funds

j. Fictitious Assets k. Working Capital

Q. 7 Balance Sheet as on 31st March, 2022

Liabilities Amt. (₹) Assets Amt. (₹)

Share Capital 13,00,000 Goodwill 50,000

Capital Reserves 5,000 Land 2,58,000

General Reserves 2,40,820 Leasehold Premises 3,00,000

Leasehold Redemption Fund 85,000 Plant 4,68,790

Profit & Loss A/c 37,554 Furniture 17,150

5% Debentures 3,15,000 3% G.P. Notes 1,42,800

Sundry Creditors 1,47,800 Stock 3,93,540

Proposed Dividend 1,50,000 Debtors 4,07,884

Provision for Taxation 50,000 Cash & Bank 2,42,560

Advance Tax 47,350

Preliminary Expenses 3,100

23,31,174 23,31,174

Rearrange the above Balance Sheet in a form suitable for analysis & calculate the following:

b. Current Assets b. Fixed / Non-Current Assets c. Total funds

employed

d. Quick Assets e. Long term borrowings f. Secured loans

g. Intangible Assets h. Proprietor‟s Funds i. Owed funds

j. Fictitious Assets k. Working Capital

Q. 8 The following balances appear in the books of M/s. Blasters Ltd. for the year ended on
31st March, 2022. You are required to prepare a revenue statement in vertical form.

Particulars Amt. Particulars Amt.

(₹) (₹)
Opening stock 1,00,000 Sales return 40,000
Net profit b/f from P.Y. 1,20,000 Profit on sale of investments 10,000
Office rent 10,000 Loss by fire 10,000
Carriage inward 40,000 Closing stock 80,000
General reserves 1,50,000 Purchases 4,00,000
Wages 1,44,000 Postage & Telegram 10,000
Octroi 10,000 Provision for tax 60,000
Office staff salaries 80,000 Sales 12,40,000
Audit fees 40,000 Dividend on shares held 50,000
Advertisement 50,000 Carriage outward 10,000
Finance expenses 50,000 Warehouse expenses 10,000
Loss on sale of asset 60,000 Import duty 6,000
Depreciation:
Plant & Machinery 30,000
Furniture 32,000
Delivery Van 28,000 90,000

Q. 9 Following information regarding M/s. Cornvita Ltd. for the year ended on 31 st March,
2022 is given:

Particulars Amt. Particulars Amt.

(₹) (₹)
Sales 10,00,000 Return Inwards 25,000
Opening stock of Raw material 55,000 Purchase of Raw material 2,50,000
Staff Salaries 75,000 Commission Allowed 2,500
Salesmen Salaries 12,500 Proposed Dividend 75,000
Bank Charges 5,000 Exhibition Expenses 17,500
Freight Inwards 20,000 Repairs of Computer 2,500
Office Rent & Insurance 22,500 Closing stock of WIP 20,000
Debenture Interest 25,000 Wages 35,000
Loss on sale of Machinery 5,000 Purchase of Finished Goods 40,000
Printing & Stationery 2,500 Interest received on Investment 20,000
Direct Expenses 25,000 Provision for Income tax 1,00,000
Profit & Loss (Cr.) 1,20,000 Closing stock of Raw material 40,000
Depreciation on Patterns 5,000 Sale of Scrap 10,000
Depreciation on Machinery 10,000

You are required to rearrange the above information & prepare vertical income statement,
suitable for analysis.

Q. 10 M/s. Nightmare Ltd.

Profit & Loss A/c for the year ended on 31 st March, 2022

Particulars Amt. Particulars Amt.

(₹) (₹)
To Establishment Expenses 65,000 By Gross Profit b/d 3,06,700
To Rent & Taxes 6,000 By Dividend (gross) 10,000
To Interest on Debentures 10,500
(+) Outstanding 10,500 21,000
To Audit Fees 2,500
To Directors‟ Fees 14,000
To Sundry Expenses 700
To Depreciation on:
Land & Building 17,500
Furniture 70,000 87,500
To Remuneration to Managing 6,000
Director
To Provision for taxes 57,000
To Net Profit c/d 57,000

To General Reserves By Net Profit b/d

To Proposed Equity Dividend 60,000 By Balance brought forward 25,000
(P.Y.)
To Balance carried forward 7,000
82,000 82,000

You are required to convert the above Profit & Loss A/c into vertical form & determine the
following:
a. Administrative Expenses b. Finance Expenses c. Operating Expenses

d. Non-operating Income e. Net Profit before Tax f. Net Profit after Tax

Q. 11 The following information regarding M.B. Ltd for the year ended 31 st March, 2022 is
given to you:

Particulars Amt. Particulars Amt.

(₹) (₹)
Sales 37,50,000 Office salary 2,00,000
Purchases 25,00,000 Computer repairs & maintenance 42,000
Opening stock (01-04-2021) 2,50,000 Rent, rates & taxes 2,000
Closing stock (31-03-2022) 3,75,000 Printing & stationery 200
Return inward 37,500 Bad debts 37,875
Carriage outward 28,500 Purchase of Computer 20,000
Carriage inward 25,000 Dividend on shares (Cr.) 5,000
Return outward 25,000 Staff welfare expenses 22,000
Salesmen salary 37,500 Interest (Dr.) 25,000
Advertising & Publicity 1,26,000 Loss on sale of shares 1,12,500
Salesmen Travelling Allowance 3,750

Rearrange the above information in vertical form suitable for analysis.

Q. 12 Following are the balances in the books of Romario Ltd. for the year ended 31 st
March, 2021.

Particulars Amt. Particulars Amt.

(₹) (₹)
10% Preference Share Capital 5,00,000 Inventories 15,00,000
Administrative Expenses 3,00,000 Long term Investments 1,00,000
Cash & Bank 25,000 Other Current Liabilities 50,000
Marketable Investments 2,00,000 Other Direct Expenses 1,20,000
Depreciation 1,75,000 Provision for Expenses 1,62,500
Direct Labour 1,87,500 Raw materials consumed 19,50,000
Equity Share Capital 7,50,000 Reserves & Surplus 1,75,000
Fixed Assets 35,00,000 Sales 40,00,000
Income Tax 4,42,500 Secured term Loans 30,00,000
Interest paid 3,60,000 Selling Expenses 65,000
Trade Payables 8,37,500 Trade Receivables 9,25,000
Unsecured term Loans 3,75,000

You are required to prepare vertical income statement for the year ended on 31 st March, 2021
& vertical balance sheet as on that date for analysis.

Q. 13 From the following trial balance of M/s. Sawera Corporation, prepare revenue
statement & balance sheet in vertical format on 31 st March, 2022.

Dr. Amt. Cr. Amt.

(₹) (₹)
Opening stock 32,000 Sales 2,64,000
Purchases 2,24,000 Creditors 48,400
Trade charges 8,640 Discount 4,800
Salaries 12,400 Sundry receipts 9,680
Rent 7,200 Sawera‟s Capital 2,00,000
Stationery 2,500
Carriage outward 900
Discount allowed 4,800
Debtors 1,68,000
Furniture 16,000
Cash at bank 48,400
Cash in hand 2,040
Total 5,26,880 Total 5,26,880

Adjustments: 1. Closing stock on 31 st March, 2022 was ₹40,000

2. Provide for trade charges due ₹2,400

3. Write off Bad debtors ₹2,000

4. Depreciate Furniture by 10% p.a.

Q. 14 Following is the trial balance of R & M Ltd. as on 31 st March, 2022. Trial Balance

Dr. Amt. Cr. Amt.

(₹) (₹)
Preliminery Expenses (not yet 40,000 Equity Share Capital (₹100) 14,00,000
written off)
Administrative Expenses 8,00,000 Gross Sales 40,80,000
Land & Building 16,00,000 General Reserve 6,40,000
Plant & Machinery 12,00,000 Profit & Loss A/c (Cr.) 4,00,000
Selling Expenses 2,00,000 12.5% Debentures 8,00,000
Furniture 6,00,000 Depreciation Provision:
Land & Building
4,00,000
Plant & Machinery 2,00,000
Furniture 1,60,000 7,60,000
Cost of production 19,20,000 Trade Payables 8,00,000
Return Inwards 80,000
Finished Goods 4,80,000
Government Bonds 5,60,000
Advance Tax 4,00,000
Trade Receivables 10,00,000
Total 88,80,000 Total 88,80,000

Other information: 1. Closing stock of Finished Goods was ₹3,20,000

2. Provide dividend on equity shares at 10%

3. Make provision for Income tax of ₹4,00,000

From the above information, you are required to prepare Income statement for the year ended
31st March, 2022 & Balance sheet as on that date in vertical form suitable for analysis.

Q. 15 Following is the trial balance of M/s. Appy Ltd. as on 31 st March, 2022.

Particulars ₹ ₹
Sales 40,00,000
Fixed Assets 20,00,000
Bills Receivables & Payables 4,00,000 3,00,000
Cash & Bank balance 1,00,000
Opening stock 2,00,000
Bank overdraft 2,00,000
Purchases 25,00,000
Administrative Expenses 60,000
Legal Expenses 40,000
Salaries 1,00,000
Advertisement 80,000
Warehouse Rent 40,000
Depreciation on machinery 1,00,000
Interest on Bank overdraft 20,000
Equity Share Capital 12,00,000
General Reserve 2,00,000
Laptop Repairs 40,000
Direct Expenses 40,000
Investment 80,000
Debtors & Creditors 2,00,000 1,00,000
Total 60,00,000 60,00,000

Additional information: 1. Closing stock on 31st March, 2022 was valued at ₹1,00,000

2. Cash sales were 1/3 rd of credit sales

You are required to prepare vertical income statement for the year ended 31 st March, 2022 &
vertical balance sheet as on that date for financial analysis.

Q. 16 The following balances appear in the books of M/s. Chimaniya Ltd. for the year ended
31st March, 2022. You are required to prepare Revenue statement & Balance sheet in vertical
form.
Particulars Amt. Particulars Amt.
(₹) (₹)
Equity Share Capital 4,50,000 Sales 17,10,000
Plant & Machinery 90,000 Debentures 1,00,000
Purchases 13,10,000 Interim Dividend Paid 30,000
Wages 1,70,000 Depreciation 30,000
Bank Overdraft 40,000 Office Salaries 30,000
Office Rent 10,000 Dividend Received 10,000
Advertisement 40,000 Goodwill 50,000
Finance Expenses 16,000 Land & Building 96,000
Income Tax 30,000 Creditors 50,000
Preliminary Expenses (not yet 10,000 Trade Investments 1,50,000
written off)
Bills Payable 30,000 Returns to Suppliers 10,000
Net Profit b/f from P.Y. 26,000 Debtors 1,30,000
Opening Stock 1,50,000 Cash 84,000

Closing stock on 31st March, 2022 is ₹1,60,000

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