NCERT Solution For Class 12 Accountancy Chapter 3 Financial Statements Of A Company

Last Updated: August 25, 2024Categories: NCERT Solutions

NCERT Solutions for Class 12 Accountancy Part 2 Chapter 3 Financial Statements of a Company are provided here by SimplyAcad to support students struggling with the complicated questions of the chapter.

The solutions offer great insight of the topic and help clear the basics ensuring better understanding of the concepts and related functions.

Financial Statements Of A Company is a crucial chapter dealing with various functions, formulas, and applications, therefore, students must thoroughly prepare it to score well. The provided answers will serve as a guidance to the students so they can learn the method to approach questions in the paper.

NCERT Solutions for Class 12 Accountancy Part 2 Chapter 3 Financial Statements of a Company contains different forms of questions including short, long and numericals and answers of all are given in an organised and structured manner below.

Access NCERT Solutions for Class 12 Accountancy Part 2 Chapter 3 Financial Statements of a Company

Short Questions for NCERT Accountancy Solutions Part 2 Class 12 Chapter 3

1. State the meaning of financial statements.

Financial statements are the end products of an accounting process It provides a true picture of the performance of the company over a time period, and such a statement is used by different users of accounting information. These statements are prepared annually.

2. What are the limitations of financial statements?

The limitations are

1. Financial statements reflect historical data, i.e., it reflects the original price of the items or the price at which items were acquired. It fails to highlight the current price of items as per market and also inflated prices due to rising inflation in the market. Hence, data and information are historical in nature.

2. Financial statements do not portray the qualitative aspects of any transaction, the aspects such as size, colour, quality and capabilities. Only quantitative data, which can be expressed in monetary value, are considered

3. Financial statements are biased in nature, as they are dependent on human interference.

4. It becomes difficult to assess the performance of another company.

5. It will be difficult to forecast, as the statement is prepared based on historical data.

3. List any three objectives of financial statements.

The objectives of preparing financial statements are

1. A financial statement provides timely and reliable information on the economic status of a company on a periodical basis. It also makes information available to external users or stakeholders who do not have direct access to the information.

2. A financial statement helps in revealing the true financial position of a company. It contains information related to liquidity, profitability, financial viability and solvency of an organisation.

3. A financial statement is helpful in evaluating the earning capacity of a firm.

4. State the importance of financial statements to
(i) shareholders
(ii) creditors
(iii) government
(iv) investors

The following are the importance of financial statements for

1. Shareholders: For a shareholder, a financial statement is helpful in determining the viability and profit-making capacity of a business. It provides businesses with sufficient data to analyse the financial health and performance of the business.

2. Creditors: A financial statement is essential for a creditor to understand the creditworthiness of the business along with liquidity. It helps them to decide whether further investments can be done in this business.

3. Government: A financial statement helps the government in determining GDP, national income, industrial growth etc., which leads to the formulation of various policies and addressing problems like poverty, unemployment, etc.

4. Investors: For Investors who have invested or those planning to invest, a financial statement is necessary. The financial statement helps determine the prospects and viability of new investments.

5. How will you disclose the following items in the Balance Sheet of a company:

(i) Loose Tools

(ii) Uncalled liability on partly paid-up shares

(iii) Debentures Redemption Reserve

(iv) Mastheads and publishing titles

(v) 10% debentures

(vi) Proposed dividends

(vii) Share forfeited account

(viii) Capital Redemption Reserve

(ix) Mining Rights

(x) Work-in-progress

Disclosure of various items in the Balance Sheet of a company is given below.

Part 2 Class 12 Chapter 3-1

Long Questions for NCERT Accountancy Solutions Part 2 Class 12 Chapter 3

1. Explain the nature of the financial statements.

The nature of financial statements are

1. A financial statement records facts about the items at the original price at which they were purchased. It does not take into account the prevailing market price and also does not include price fluctuations due to inflation.

2. The financial statements are created based on various accounting conventions such as the Prudence convention, matching concept, etc. and adhering to such conventions results in the statements being easy to understand, compare and reflect the fair and true financial situation of the organisation.

3. A financial statement is based on many concepts, such as the going concern concept, realisation concept, and money measurement concept. A financial statement adheres to all these concepts when financial statements are prepared.

4. In preparing financial statements, personal judgements play an important role. For example, when determining which method to charge depreciation and recording of stock at market value or cost price. All these are based on personal judgement.

2. Explain in detail the significance of the financial statements.

Importance of financial statements

1. They provide information to various users of accounting information which can be both internal and external. Users derive information as per their needs from such statements. For example, they provide shareholders with an idea about the viability of the business while the same statement can be used by tax authorities to determine the tax payable by an organisation.

2. They help management in comparing performance which can be on both inter and intra-firm basis, it helps in determining the viability of the business and also is helpful in the framing of policies for business. It enhances the decision-making capabilities of the management.

3. Financial statements help creditors and investors determine the state of solvency of a business which influences the decision to offer loans and credit.

4. Financial statements help provide information on different policies, methods, best practices and accounting processes. Disclosing accounting policies simplifies financial statements and gives users of accounting information.

5. The government uses accounting information to determine various parameters of national growth like GDP, National Income, Industrial growth, etc.

6. Investors need information on business solvency and profitability to offer further loans and invest in the business, and such information is obtained from financial statements.

3. Explain the limitations of financial statements.

The limitations are

1. Financial statements reflect historical data, i.e., they reflect the original price of the items or the price at which items were acquired. It fails to highlight the current price of items as per market and also inflated prices due to rising inflation in the market. Hence, data and information are historical in nature.

2. Financial statements do not portray the qualitative aspects of any transaction, the aspects such as size, colour, quality and capabilities. Only quantitative data which can be expressed in monetary value are considered.

3. Financial statements are biased in nature, as they are dependent on personal judgement regarding the way transactions are recorded

4. It becomes difficult to assess the financial performance of one company with another due to differences in practices and methods adopted by each company.

5. It will be difficult to forecast, as the statement is prepared based on historical data, as it fails to capture inflation rates.

6. The company can manipulate the data to show a better liquidity position, which can give a false impression to the investors leading to project cancellation.

4. Prepare the format of the statement of Profit and Loss and explain its items.

As per the REVISED SCHEDULE VI, the statement is as follows:

Statement of Profit and Loss

For the year ended.

S. No. Particulars Note No. Figures for the Current Year Figures for the Previous Year
I Revenue from Operations
II Other Income
III Total Revenue (I + II)
IV Expenses:
Cost of Material Consumed
Purchase of Stock-in-Trade
Changes in inventories of finished goods
Work-in-progress and Stock-in-Trade
Employee Benefit Expenses
Finance Cost
Depreciation and Amortisation Expenses
Other Expenses
Total Expenses
V Profit before exceptional and extraordinary items and tax (III – IV)
VI Exceptional items
VII Profit before extraordinary item and tax (V – VI)
VIII Extraordinary Items
IX Profit Before Tax (VII – VIII)
X Tax Expenses
(1) Current Tax
(2) Deferred Tax
XI Profit/(Loss) for period from continuing operations (IX – X)
XII Profit/ (Loss) from discontinuing operations
XIII Tax expenses of discontinuing operations
XIV Profit/(Loss) from discontinuing operations (after Tax (XII – XIII)
XV Profit (Loss) for the period (XI + XIV)
XVI Earning Per Equity Shares
(1) Basic
(2) Diluted

Items of the Profit and Loss Statement are

1. Revenue from Operations: Revenue is earned from the basic operating activities of an organisation. The source of revenue varies for financing and non-financing companies. For financing companies, the revenue sources are Interest, dividends and other types of financial services while for a non-financing company, it includes revenues earned from sales of products and services and other operating activities.

2. Other Incomes: Refers to incomes that are earned separately and not from any operating activity. These are the sources: Gain on the sale of investments, income from interest, and dividends as such.

3. Expenses: These include all the expenses, such as the cost of materials consumed, purchasing of stock in trade, also changes in inventories, stock in trade and work in progress.

5. Prepare the format of the balance sheet and explain the various elements of the balance sheet.

COMPANY’S BALANCE SHEET- As per REVISED SCHEDULE VI

Name of the Company.

BALANCE SHEET

as on

Particulars Note No. Figures as of the end of the Current Year Figures as of the end of the Previous Year
I. EQUITY AND LIABILITIES
(1) Shareholders’ Funds
(a) Share Capital
(b) Reserves and Surplus
(c) Money received against Share Warrants
(2) Share Application Money Pending Allotment
(3) Non-Current Liabilities
(a) Long-Term Borrowings
(b) Deferred Tax Liabilities (Net)
(c) Other Long-Term Liabilities
(d) Long-Term Provisions
(4) Current Liabilities
(a) Short-Term Borrowings
(b) Trade Payables
(c) Other Current Liabilities
(d) Short-Term Provision
TOTAL
II. ASSETS
(1) Non-Current Assets
(a) Fixed Assets
(i) Tangible Assets
(ii) Intangible Assets
(iii) Capital Work-in-Progress
(iv) Intangible assets under development
(b) Non-Current Investments
(c) Deferred tax assets (net)
(d) Long-Term Loans and Advances
(e) Other Non-Current Assets
(2) Current Assets
(a) Current Investments
(b) Inventories
(c) Trade Receivables
(d) Cash and Cash Equivalents
(e) Short-Term Loans and Advances
(f) Other Current Assets
TOTAL

The elements of a balance sheet consist of

A. Shareholder Funds

1. Share Capital consists of Authorised capital, Subscribed capital, Issued capital equity and preference share.

2. Reserves and Surplus consists of Capital Reserve, Debenture Redemption, Capital Redemption Reserve, Tax Reserve, General Reserve and Share warrants. Share warrants provide the holder to have ownership of equity shares of a company. When money is received from selling share warrants, it is called as money received against warrants.

B. Share Application money pending allotment: It refers to an application on which allotment is pending, but the amount is received. It takes place when a company issues equity shares publicly in order to raise funds.

C. Non-Current Liabilities: These consists of the following items: long-term borrowings, deferred tax liabilities, long-term provisions and other long-term liabilities.

D. Current liabilities: These consist of the following items: short-term liabilities, trade payables, short-term provisions

E. Assets which include Non-current and Current Assets. Non-current assets can be long-term loans, plant, machinery, furniture, goodwill etc., while current assets are investments in shares and debentures, finished goods, raw materials, cash and cash equivalents, bank balance, cheques not encashed, and short-term.

6. Explain how financial statements are useful to the various parties who are interested in the affairs of an undertaking.

The various parties interested in the financial statements of a company can be broadly classified as 1. Internal and 2. External

Internal Users

1. Owners: The interest of an owner is towards knowing whether profit is earned or loss is incurred by the business. They are more interested in knowing about the viability of the capital that is invested in the business.

2. Management: Financial statements help management in devising new policies for the growth of business and also provide management with the insights required for implementing various cost-cutting measures.

3. Employees: They are interested in timely payments, bonuses and appraisals at the decided time. Financial statements help employees to learn about the financial position of the organisation so that appropriate salaries can be demanded.

External Users

1. Banks and Financial Institutions: Such institutions provide credit, so it is necessary to understand the liquidity, solvency and creditworthiness of the organisation for loan requirements in future.

2. Creditors: Businesses owe money to creditors, and hence, it is important for them to have information about the creditworthiness of the business.

3. Investors or potential investors: These are people who will provide funds by means of investment in the business. Hence, the viability and solvency of an organisation will help in making investment decisions.

4. Tax Authorities: Information is required by them for determining the types of taxes that can be charged to the organisation.

5. Government: Government needs information to determine National Income, GDP and industrial growth. Financial statements help the government formulate various policies and address issues like poverty and unemployment.

6. Consumers: An organisation publishing a financial statement makes consumers aware of the profits they are earning and the relative expenses that go into providing services at affordable prices, thus helping to gain a good name among consumers.

7. Public: Public knowledge of financial statements is about how the business is spending money for social welfare.

8. Researchers: Researchers use financial statements to predict market trends and undertake research projects.

7. `Financial statements reflect a combination of recorded facts, accounting conventions and personal judgments.’ Discuss.

Financial statements reveal the true financial position of a company and help in formulating various decisions and policy making. The nature of financial statements is dependent on these aspects:

1. Financial statement records facts about the items at the original price at which they were purchased. It does not take into account the prevailing market price and also does not include price fluctuations due to inflation.

2. The financial statements are created based on various accounting conventions such as the Prudence convention, matching concept etc., and adhering to such conventions results in the statements being easy to understand, compare and reflect the fair and true financial situation of the organisation.

3. A financial statement is based on many concepts, such as the going concern concept, realisation concept, and money measurement concept. A financial statement adheres to all these concepts when financial statements are prepared.

4. In preparing financial statements, personal judgements play an important role. For example, when determining which method to charge depreciation and recording of stock at market value or cost price. All these are based on personal judgement.

8. Explain the process of preparing the income statement and a balance sheet.

The process of preparing the income statement and balance sheet is as follows:

Income Statement

1. Prepare a trial balance as per the balance of different accounts in the ledger.

2. Determine revenue received from the business operation, which is achieved by subtracting sales return from sales conducted.

3. Add incomes received other than revenue (such as cash discount and profit earned from the sale of assets.)

4. Deduct expenses from total revenue to determine profit before tax.

5. Deduct tax paid by the company from the amount determined as profit before tax to arrive at Net Profit or Loss.

Balance Sheet

The balance sheet consists of two parts: Equity and Liabilities and Assets.

1. The equity and liabilities contain shareholder funds, non-current liabilities, current liabilities and share application money pending allotment are recorded.

2. Assets are recorded next, and they contain all non-current and current assets

3. Tally the total of both sides. It must be equal for the total to tally.

Numerical Questions for NCERT Accountancy Solutions Part 2 Class 12 Chapter 3

1. Show the following items in the balance sheet as per the provisions of the Companies Act, 2013 in Schedule III:

Particulars Particulars
Preliminary Expenses 2,40,000 Good will 30,000
Discount on the issue of shares 20,000 Loose tools 12,000
10% Debentures 2,00,000 Motor Vehicles 4,75,000
Stock in Trade 1,40,000 Provision for tax 16,000
Cash at bank 1,35,000
Bills receivable 1,20,000

The solution to this question is as follows:

Extract of Balance Sheet

as of March 31, 2013

Particulars Note No. Amount

(₹)

I. Equity and Liabilities
1. Shareholders’ Funds
a. Share Capital
b. Reserves and Surplus
2. Non-Current Liabilities
  1. Long-term Borrowings
1 2,00,000
3. Current Liabilities
  1. Other Current Liabilities
b. Short-term Provisions 2 16,000
II. Assets
1. Non-Current Assets
  1. Fixed Assets
i. Tangible Assets 3 4,75,000
ii. Intangible Assets 4 30,000
b. Non-Current Investments
2. Current Assets
  1. Inventories
5 1,52,000
b. Trade Receivables 6 1,20,000
c.Cash and Cash Equivalents 7 1,35,000
d. Other Current Assets 8 2,60,000
Notes to Accounts
Particulars Amount

(₹)

1. Long-Term Borrowings
10% Debentures 2,00,000
2. Short-Term Provisions
Provision for Tax 16,000
3. Tangible Assets
Motor Vehicles 4,75,000
4. Intangible Assets
Goodwill 30,000
5. Inventory
Loose Tools 12,000
Stock 1,40,000 1,52,000
1,52,000
6. Trade Receivables
Bill Receivable 1,20,000
7. Cash and Cash equivalents
Cash at Bank 1,35,000
8. Other Current Assets
Preliminary Expenses 2,40,000
Discount on Issue of Shares 20,000 2,60,000
2,60,000

2. On 1st Aril, 2017, Jumbo Ltd. issued 10,000; 12% debentures of ₹. 100 each, a discount of 20%, redeemable after 5 years. The company decided to write off discounts on the issue of such debentures over the lifetime of the Debentures. Show the items in the balance sheet of the company immediately after the issue of these debentures.

The solution to this question is as follows:

Balance Sheet

as of April 01, 2017

Particulars Note No. Amount

(₹)

I. Equity and Liabilities
1. Shareholders’ Funds
a. Share Capital
b. Reserves and Surplus
2. Non-Current Liabilities
a. Long-term Borrowings 1 10,00,000
3. Current Liabilities
a. Other Current Liabilities
b. Short-term Provisions
Total 10,00,000
II. Assets
1. Non-Current Assets
a. Other Non-Current Assets 2 1,60,000
2. Current Assets
a. Other Current Assets 3 40,000
b. Cash and Cash Equivalents 4 8,00,000
Total 10,00,000
Notes to Accounts
Particulars Amount

(₹)

1. Long-Term Borrowings
12% Debentures 10,00,000
2. Other Non-current assets
Unamortized discount on issue of Debentures 1,60,000
3. Other Current Assets
Unamortized discount on issue of Debentures 40,000
4. Cash and Cash Equivalents
Bank 8,00,000

3. From the following information, prepare the balance sheet of Gitanjali Ltd., as per the (Revised) Schedule VI:

Inventories ₹. 14,00,000; Equity Share Capital ₹. 20,00,000; Plant and Machinery ₹. 10,00,000; Preference Share Capital ₹. 12,00,000; Debenture Redemption Reserve ₹. 6,00,000; Outstanding Expenses ₹. 3,00,000; Proposed Dividend ₹. 5,00,000; Land and Building ₹. 20,00,000; Current Investments ₹. 8,00,000; Cash Equivalent ₹. 10,00,000; Short-term loan from Zaveri Ltd. (A Subsidiary Company of Twilight Ltd.) ₹. 4,00,000; Public Deposits ₹. 12,00,000.

The solution to this question is as follows:

Balance Sheet

as on

Particulars Note No. Amount

(₹)

I. Equity and Liabilities
1. Shareholders’ Funds
a. Share Capital 1 32,00,000
b. Reserves and Surplus 2 6,00,000
2. Non-Current Liabilities
a. Long-term Borrowings 3 12,00,000
3. Current Liabilities
a. Other Current Liabilities 4 3,00,000
b. Short-term Borrowings 5 4,00,000
c. Short-term Provisions 6 5,00,000
Total 62,00,000
II. Assets
1. Non-Current Assets
a. Fixed Assets
i. Tangible Assets 7 30,00,000
ii. Intangible Assets
b. Non-Current Investments
2. Current Assets
a. Inventories 14,00,000
b. Current Investments 8,00,000
c. Cash and Cash Equivalents 10,00,000
Total 62,00,000
Notes to Accounts
Particulars Amount

(₹)

1. Share Capital
Equity Share Capital 20,00,000
Preference Share Capital 12,00,000 32,00,000
32,00,000
2. Reserve and Surplus
Debenture Redemption Reserve 6,00,000
3. Long-term Borrowings
Public Deposits 12,00,000
4. Other Current Liabilities
Outstanding Expenses 3,00,000
5. Short-term Borrowings
Loan from Zaveri Ltd. 4,00,000
6. Short-Term Provisions
Proposed Dividend 5,00,000
7. Tangible Assets
Land and Building 20,00,000
Plant and Machinery 10,00,000 30,00,000
30,00,000

4. From the following information, prepare the balance sheet of Jam Ltd. as per the (revised) Schedule VI:

Inventories ₹. 7, 00,000; Equity Share Capital ₹. 16, 00,000; Plant and Machinery ₹. 8, 00,000; Preference Share Capital ₹. 6, 00,000; General Reserve’s ₹. 6, 00,000; Bills payable ₹. 1, 50,000; Provision for taxation ₹. 2, 50,000; Land and Building ₹. 16, 00,000; Noncurrent Investments ₹. 10, 00,000; Cash at Bank ₹. 5, 00,000; Creditors ₹. 2, 00,000; 12% Debentures ₹. 12,00,000.

The solution to this question is as follows:

Balance Sheet

as of March 31, 2013

Particulars Note No. Amount

(₹)

I. Equity and Liabilities
1. Shareholders’ Funds
a. Share Capital 1 22,00,000
b. Reserves and Surplus 2 6,00,000
2. Non-Current Liabilities
a. Long-term Borrowings 3 12,00,000
3. Current Liabilities
a. Short-term Borrowings
b. Trade Payables 4 3,50,000
c. Short-term Provisions 5 2,50,000
Total 46,00,000
II. Assets
1. Non-Current Assets
a. Fixed Assets
i. Tangible Assets 6 24,00,000
b. Non-Current Investments 10,00,000
2. Current Assets
a. Inventories 7,00,000
b. Cash and Cash Equivalents 7 5,00,000
Total 46,00,000
Notes to Accounts
Particulars Amount

(₹)

1. Share Capital
Equity Share Capital 16,00,000
Preference Share Capital 6,00,000 22,00,000
22,00,000
2. Reserve and Surplus
General Reserve 6,00,000
3. Long-Term Borrowings
12% Debentures 12,00,000
4. Trade Payables
Creditors 2,00,000
Bills Payable 1,50,000 3,50,000
3,50,000
5. Short-Term Provisions
Provision for Taxation 2,50,000
6. Tangible Assets
Land and Building 16,00,000
Plant and Machinery 8,00,000 24,00,000
24,00,000
7. Cash and Cash Equivalents
Bank 5,00,000

5. Prepare the balance sheet of Jyoti Ltd. as of March 31, 2017, from the following information:

Building ₹. 10,00,000; Investments in the shares of Metro Tyers ₹. 3,00,000; Stores & Spares ₹. 1,00,000; Discount on issue of 10% debentures ₹. 10,000; Statement of Profit and Loss (Dr.) ₹. 90,000; 5,00,000 Equity Shares of ₹. 20 each fully paid-up; Capital Redemption Reserve ₹. 1,00,000; 10% Debentures ₹. 3,00,000; Unpaid dividends ₹. 90,000; Share options outstanding account ₹. 10,000.

The solution to this question is as follows:

Balance Sheet

as of March 31, 2017

Particulars Note No. Amount

(₹)

I. Equity and Liabilities
1. Shareholders’ Funds
a. Share Capital 1 10,00,000
b. Reserves and Surplus 2 10,000
2. Non-Current Liabilities
  1. Long-term Borrowings
3 3,00,000
3. Current Liabilities
  1. Other Current Liabilities
4 1,00,000
Total 14,10,000
II Assets
1. Non-Current Assets
a. Fixed Assets
i. Tangible Assets 5 10,00,000
b. Non-Current Investments 6 3,00,000
2. Current Assets
a. Inventories 7 1,00,000
b. Other Current Assets 8 10,000
Total 14,10,000
Notes to Accounts
Particulars Amount

(₹)

1. Share Capital
Equity Share Capital (50,000* shares of ₹ 20 each) 10,00,000
2. Reserve and surplus
Capital Redemption Reserve 1,00,000
Less: Statement of Profit or Loss (Debit) 90,000 10,000
10,000
3. Long-term Borrowings
10% Debentures 3,00,000
4. Other Current Liabilities
Unpaid Dividend 90,000
Share Option Outstanding 10,000 1,00,000
1,00,000
5. Tangible Assets
Building 10,00,000
6. Non-Current Investments
Shares of Metro Tyres 3,00,000
7. Inventory
Stores and Spares 1,00,000
8. Other Current Assets
Discount on Issue of 10% Debentures 10,000

6. Brinda Ltd. has furnished the following information:

(a) 25,000, 10% debentures of ₹. 100 each;

(b) Bank Loan of ₹. 10,00,000 repayable after 5 years;

(c) Interest on debentures is yet to be paid.

Show the above items in the balance sheet of the company as of March 31, 2017.

The solution to this question is as follows:

Extract of Balance Sheet

as of March 31, 2017

Particulars Note No. Amount

(₹)

I. Equity and Liabilities
1. Shareholders’ Funds
a Share Capital
b. Reserves and Surplus
2. Non-Current Liabilities
  1. Long-term Borrowings
1 35,00,000
3. Current Liabilities
  1. Other Current Liabilities
2 2,50,000
Notes to Accounts
Particulars Amount

(₹)

1. Long-Term Borrowings
12% Debentures 25,00,000
Bank Loan 10,00,000 35,00,000
35,00,000
2. Other Current Liabilities
Interest on Debentures 2,50,000

7. Prepare a balance sheet of Black Swan Ltd., as of March 31, 2017, from the following information:

General Reserve : 3,000
10% Debentures : 3,000
Statement of Profit & Loss : 1,200
Depreciation on fixed assets : 700
Gross Block : 9,000
Current Liabilities : 2,500
Preliminary Expenses : 300
6% Preference Share Capital : 5,000
Cash & Cash Equivalents : 6,100

The solution to this question is as follows:

Extract of Balance Sheet

as of March 31, 2017

Particulars Note No. Amount

(₹)

I. Equity and Liabilities
1. Shareholders’ Funds
a. Share Capital 1 5,000
b. Reserves and Surplus 2 4,200
2. Non-Current Liabilities
a. Long-term Borrowings 3 3,000
3. Current Liabilities 2,500
Total 14,700
II. Assets
1. Non-Current Assets
a. Fixed Assets
i. Tangible Assets 4 8,300
2. Current Assets
a. Cash and Cash Equivalents 5 6,100
b. Other Current Assets 6 300
Total 14,700
Notes to Accounts
Particulars Amount

(₹)

1. Share Capital
6% Preference Share Capital 5,000
2. Reserve and Surplus
General Reserve 3,000
Statement of Profit or Loss 1,200 4,200
4,200
3. Long-Term Borrowings
10% Debentures 3,000
4. Tangible Assets
Fixed Assets 9,000
Less: Depreciation 700 8,300
8,300
5. Cash and Cash Equivalents
Cash 6,100
6. Other Current Assets
Preliminary Expenses 300

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