Question

Z Ltd. has the following balances on 1st April, 2022:

	₹
General Reserve	2,50,000
Capital Reserve	1,50,000
Statement of Profit & Loss	2,00,000

During the year ended 31st March, 2023, it incurred a loss of ₹ 7,10,000. Show how these items will appear in the Balance Sheet and notes to accounts?

Answer 1

Balance Sheet of Z Ltd. as at 31st March, 2023.
Particulars	Note No.	Current Year (₹)	Previous Year (₹)
I. EQUITY AND LIABILITIES:
1. Shareholders’ Funds:
(a) Share Capital		-	-
(b) Reserves & Surplus	1	(1,10,000)	6,00,000

Notes to Accounts:

Note 1: Reserves & Surplus
Particulars	Current Year (₹)	Previous Year (₹)
General Reserve	2,50,000	2,50,000
Capital Reserve	1,50,000	1,50,000
Surplus i.e. Balance in Statement of Profit & Loss:
– Balance as per last Balance Sheet	2,00,000	2,00,000
– Less: Loss during the year	(7,10,000)	-
Balance carried forward	(5,10,000)	2,00,000
Total (Reserves & Surplus)	(1,10,000)	6,00,000

Working notes:

Loss during the year = ₹ 7,10,000

2,00,000 − 7,10,000

= (₹ 5,10,000)

Closing Balances:

General Reserve = ₹ 2,50,000

Capital Reserve = ₹ 1,50,000

Statement of P&L (Debit balance) = (₹ 5,10,000)

2,50,000 + 1,50,000 − 5,10,000

= (₹ 1,10,000)

Reserves & Surplus = (₹ 1,10,000)