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FINANCIAL ACCOUNTING FOR MANAGEMENT

SANJAY INDUSTRIES LTDBalance Sheet and Income Statement

o6. I7. J8.

1.

The following is the trial balance f Sanjay Industries Ltd as on 31st March 2006.2.

of Rs. 10 each)

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CHAPTER3 MEASUREMENTOF PROFITANDFINANCIALPOSITiON: IIICORPORATEENTITIES

6. Providefor m a n a ~ e r i a l remuneration@10%of thenetprofitsbeftr:;ax.7. Makeaprovisionforincometax@ 35%.8. TheBoardof Directorsproposesadividend@10%forthe yearended31 stMarch2006aftertransfertoGeneralReserve@5%of profitaftertax.t s ~ ~ < 6 ~ 6 1 ( ~ 10 U,S() _ ,:LS 3 0 ~Required . \ -:::- s ~ 7 3-;1. Preparethefollowingfinancialstatementsof SanjayIndustriesLtd.:

a. Profit and loss account fortheyearended31stMarch2006. ~ O t D 6 \ ~ NPb. Profit and loss appropriation account fortheyearended31 stMarch2006.c. Balancesheetas on31 stMarch2006. c . . ~ : ; , ?'o3 s-S 1 312. Brieflycommentupontheperformanceof thecompany.f D .;: q< I OSt:> ~ \ :. 50 r, 33

fSA011O " A T ~ ~ ~ (.,. 06'1'\ ~ - ~ l - I ~ l 6 Gr -:> ~ ~ ~ y SOI.

SANGEETA UDHYOG LTD.Balance Sheet and Income Statement

The following is thetrialbalanceof SangeetaUdhyogLtd.ason3]stMarch2006.~ " . ' ) Y . . , ; ~ ; . . ; ; j ; ~ : i ? , ; . i ; } ~ ~ i ( . : ; ; i h ~ ( j ; r ' V ~ i ~ ~ ' \ ' ' / ~ ~ ; i . i . ; } ; ~ ( f ~ ~ t . " , ' C t ~ ' i f i ~ l e ; : ; X 7 \

Stock, 1st April 2005 14,91,360Wages 8,77,920Debtors &creditors 13,15,200 7,37,760Furniture 40,000

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136 FINANCIAL ACCOUNTING FOR MANAGEMENTRates electricity-factory

96,0001,04,000

10,000

Further infQrmation1 The authorised share capital of the company consists of 4,00,000 equity shares of Rs. 10 each.2. The stock was valued at Rs, 9,98,720 and loose tools at Rs. 80,000,3. Wages Rs. 15.120 and ofl\ce salaries Rs. 9,600 are due.4. Bank loan was taken on 1-04-2005 on interest @ 15% p.a. o s t..Mt - ... . . 4 - ~5. Depreciation is to be provided on:

1 Plant Machinery @ 14%;2 Furniture @ 18%.

6 Write off one-third Preliminary Expenses.7. Provide Rs. 68,000 on Debtors for Doubtful Debts.8 Provide further Rs. 24,960 for discount on debtors.9. Make a provision for income tax @ 35%.10. Transfer 10% of net profits to General Reserve.

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CHAPTER 3 MEASUREMENT OF PROFIT AND FINANCIAL POSITION: III CORPORATE ENTITIES

10 each.

t ; jA. / l . i ~ ~ i j i ; \ i , ; \ j . r ~r ~bentures- secured 15,00,000

General reserve ?h on n MBank uvtlluldft-ABN Amro ~ . ; " ured 15,28,600Sundry creditors 14,61,400Sales 1,44,68,500Rent 1,20,000Other income 25,500Profit & Ale 2,68,000Calls-in-arrears 40,000Stock, _n ... . goods"''''''''tlU 6,87,300Stock, 1-04-2005-raw materials ., 9,73,000Raw materials purchased 59,29,700

....""'.,'" and discounts 1,20,800Carriage 'VVCl'U' ?2Q?OORates, taxes and insurance 2,20,200

, Wages 52,19,800I Coal and fuel 2,52,000 Furniture and fixtures 6,50,000

Freehold land 52,00,000Plant & Machinery 29,50,000Er'\,III. ,,,,,nng tools f i f ih nnn

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FINANCIAL ACCOU 'J'nNG FOR MANAGEMENT

2. The closing stocks of finished goods and raw materials were valued at Rs. 12,40,000 andRs. 15,92,000 respectively.3. The closing stocks of engineering tools was valued at Rs. 5,32,000.4. Outstanding liabilities for wages and general expenses: Rs. 1,00,000 each.5. Depreciation to be charged: plant and machinery @ 14%, patterns @ 20%, furniture & fixtures

@ 18%.6. Provide 2% on debtors as doubtful debts after writing otT Rs.86,000 as bad debts.7. Write offpreliminary expenses Rs. 20,000.8. Provide income tax @ 35%.9. Create debenture redemption reserve ofRs 3,00,000.

10. Dividend @ 10% on equity proposed by the board of directors.Required

1. Prepare the following financial statements of ushpa Engineering Company Ltd.:a. Balance sheet as at 31 st March 2006.b. Profit and loss aCGount for the year ended 31 st March 2006.c. Profit and loss appropriation account for the year ended 31 st March 2006.

2. Briefly comment upon the performance of the company.Hint: Debenture redemption reserve is appropriated out of profits just like general reserve for the'llr ',' ''' of meeting the debenture redemption liability.)