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Question
The following balances are left on the books of HMM Ltd. after its Profit and Loss Statement had been prepared for the year ended 31st March, 2024:
| Liabilities | ₹ | Assets | ₹ |
| Securities Premium | 80,000 | Plant and Equipment | 6,60,000 |
| General Reserve | 1,00,000 | Trade Receivables | 1,20,000 |
| Trade Payables | 2,40,000 | Cash at Bank | 2,00,000 |
| Share Capital paid up (Nominal Capital - ₹ 10,00,000 in equity shares of ₹ 10 each) | 8,00,000 | Freehold Premises | 5,50,000 |
| Net profit for the year as on 31.3.2024 | 6,00,000 | Motor Vehicles | 3,98,000 |
| Profit & Loss balance on 1.4.2023 | 1,40,000 | Stock-in-Trade | 2,67,000 |
| Accrued Expenses | 3,00,000 | Prepaid Expenses | 25,000 |
| Cash in Hand | 40,000 | ||
| 22,60,000 | 22,60,000 |
You are required to draw up the company’s Balance Sheet as at 31st March, 2024 after taking into account the following matters:
- Transfer ₹ 1,00,000 to General Reserve.
- Directors proposed a dividend of 12% on the paid up share capital.
Ledger
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Solution
| Balance Sheet as at 31st March, 2024 | ||
| Particulars | Note No. | ₹ |
| I. EQUITY & LIABILITIES: | ||
| (1) Shareholders’ Funds | ||
| (a) Share Capital | 1 | 8,00,000 |
| (b) Reserves and Surplus | 2 | 8,24,000 |
| (2) Current Liabilities | ||
| Trade Payables | 3 | 2,40,000 |
| Accrued Expenses | 4 | 3,00,000 |
| Proposed Dividend | 5 | 96,000 |
| Total | 22,60,000 | |
| II. ASSETS: | ||
| (1) Non-Current Assets | ||
| Property, Plant and Equipment | ||
| (a) Plant and Equipment | 6 | 6,60,000 |
| (b) Freehold Premises | 7 | 5,50,000 |
| (c) Motor Vehicles | 8 | 3,98,000 |
| (2) Current Assets | ||
| Inventories (Stock-in-Trade) | 9 | 2,67,000 |
| Trade Receivables | 10 | 1,20,000 |
| Cash and Cash Equivalents: | ||
| (a) Cash at Bank | 11 | 2,00,000 |
| (b) Cash in Hand | 12 | 40,000 |
| Other Current Assets (Prepaid Expenses) | 13 | 25,000 |
| Total | 22,60,000 | |
Notes to Accounts:
1) Share Capital
| Particulars | Amount (₹) |
| Authorised Share Capital: | |
| 1,00,000 Equity Shares of ₹ 10 each | 10,00,000 |
| Issued, Subscribed and Paid-up Share Capital: | |
| 80,000 Equity Shares of ₹ 10 each fully paid | 8,00,000 |
2) Reserves & Surplus
| Particulars | Amount (₹) |
| Securities Premium | 80,000 |
| General Reserve (Opening) | 1,00,000 |
| Add: Transfer during the year | 1,00,000 |
| Closing Balance | 2,00,000 |
| Surplus (Balance in Statement of P&L): | |
| Balance as per last Balance Sheet | 1,40,000 |
| Add: Current Year’s Net Profit | 6,00,000 |
| Less: Transfer to General Reserve | (1,00,000) |
| Closing Surplus | 6,40,000 |
| Total Reserves & Surplus | 8,20,000 |
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