balane sheet

7/29/2019 balane sheet

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Group 6

Cyrus Berne R-11-02

Sagar Devarkar R-11-06

Oswinda Gomes R-11-17

Sahil Nerurkar R-11-23

Rincy Johnson R-11-31

Mohammad Ayaz R-11-36

BALANCE SHEET

AND BANK

RECONCILIATION


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Statement of financial position

INTRODUCTION

Left hand sideliabilities, right hand side - assets

Represent true financial position

Balance sheet always balances


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NEED AND IMPORTANCE

Knowledge of financial position

Comparison of current years position with last years

Find out current assets and current liabilities

Find out proprietors equity


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SPECIMEN OF A BALANCE SHEET

Balance sheet as on 31:12:2011

Liabilities Amount Assets Amount

Capital xxx Cash in hand xxxAdd interest on capital xxx Cash in bank xxx

xxx Prepaid expenses xxx

Less drawings xxx Bills receivable xxx

xxx Sundry debtors xxx

Add net profit xxx xxx Less bad debts xxx

Bills payable xxx xxx

Sundry creditors xxx Less new R.D.D xxx xxx

Outstanding expenses xxx Closing stock xxx

Bank loan xxx Motor van xxx

Bank overdraft xxx Less depreciation xxx xxx

Interest received in advance xxx Land xxx

Add appreciation xxx xxx

xxx xxx


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MARSHALING OF BALANCE SHEET

For registered companies- prescribed form

Liquidity order

Permanency or fixed order


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Liquidity Amount Assets Amount

Bank overdraft xxx Cash in hand xxx

Outstanding expenses xxx Cash at bank xxx

Income received in advance xxx Prepaid expenses xxx

Bills payable xxx Accrued income xxx

Loan creditors xxx Bills receivable xxx

Trade creditors xxx Sundry debtors xxx

Long term loans xxx Closing stock xxx

Reserve and surplus xxx Investment (long term) xxx

Capital xxx Furniture and fixtures xxxPlant and machinery xxx

Land and building xxx

Trade mark xxx

Goodwill xxx

xxx xxx

SPECIMEN OF A LIQUIDITY ORDER BALANCE SHEET



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SPECIMEN OF A PERMANENCY ORDER BALANCE SHEET

Balance sheet as on 31:12:2011Liquidity Amount Assets Amount

Capital xxx Goodwill xxx

Reserve and surplus xxx Trademarks xxx

Long term loan xxx Land and building xxx

Trade creditors xxx Motor van xxx

Loan creditors xxx Furniture and fixtures xxx

Bills payable xxx Investments (long term) xxx

Outstanding expenses xxx Closing stock xxx

Income received in advance xxx Sundry debtors xxx

Bank overdraft xxx Bills receivable xxxAccrued income xxx

Prepaid expenses xxx

Cash in bank xxx

Cash in hand xxx

xxx xxx


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IMPORTANCE OF MARSHALING OF BALANCE SHEET

Systematic flow of information

Decision making


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PRESENTING OF A BALANCE SHEET

Vertical format- single column on right hand side

Horizontal formatt format


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BALANCE SHEET OF A PARTNERSHIP FIRM

Similar in many cases- certain special features

Partnership, sole- proprietor no prescribed format


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A partners capital xxx Goodwill xxx

Less drawings xxx Plant and machinery xxx

xxx Less depreciation xxx xxx

Add interest on capital xxx Office furniture xxx

xxx Less depreciation xxx xxx

Add net profit xxx xxx Sundry debtors xxx

B partners capital xxx Less provision xxx

Less drawings xxx Cash in hand xxx

xxx Closing stock xxx

Add interest on capital xxx

xxx

Add net profit xxx xxx

Bills payable xxx

Sundry creditors xxx

SPECIMEN OF BALANCE SHEET OF A PARTNERSHIP


xxx xxx


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BALANCE SHEET OF A NON GOVERNMENT ORGANIZATION

Not trading activity- dont earn profit but give service

Balance sheet of NGO prepared same as trading organization

Difference between total assets and liabilitiesnet assets

Depicts overall status of organization


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OBJECTIVES OF NGO ACCOUNTING

Money received and spent

Funds utilized properly

Provide financial report


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DIFFERENCE BETWEEN PROFIT ORGANIZATION AND NON- PROFIT

ORGANIZATION

Profit organization Non profit organization

Earn profit Provide service

Interest of owners- owners funds Interest of members- capital fund

Net resultnet profit / loss Net result- surplus or deficit

Final accounts consist trading a/c,

profit and loss a/c and balance sheet

Final accounts consist receipt and

payment A/c, income andexpenditure a/c and balance sheet


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Capital funds xx Cash in hand xx

Add entrance fee xx xx Cash in bank xx

Unpaid salary xx Debtors xx

Building funds xx Investments xxTournament funds xx Books xx

Charity fund xx Sports material xx

Loan from others xx Furniture xx

Sundry creditors xx Building xx

Outstanding expenses xx Grounds xx

Income received in advance xx Outstanding income xx

Income and expenditure a/c xx Prepaid expenses xx

xx xx

SPECIMEN OF A NON GOVERNMENT ORGANIZATION BALANCE

SHEET



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Particular Amount Particular AmountFurniture and fixture 25,000 Net profit for the year 2007 38,000

Investments 40,000 Sundry debtor 28,000

Land and building 1,20,000 Cash in hand 2,100

Capital 3,00,000 Bills payable 12,1000

Plant and machinery 54,000 Motor vehicle 32,000

Bank over draft 9,000 Drawings 5,300

Goodwill 23,000 Loan to Mr.. Beckham 15,000

Bills receivable 17,000 Loan from Mr. Brandon 18,000

Trade creditors 21,700 Closing stock 16,000

Prepaid expenses 2,500

FROM THE FOLLOWING PARTICULAR PREPARE A BALANCE SHEET AS

ON 31ST DECEMBER 2007


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Capital 3,00,000 Goodwill 23,000

Add net profit 38,000 Land and building 1,20,000

3,.38,000 Plant and machinery 54,000

Less drawings 5,300 3,32,700 Motor vehicles 32,000

Bills payable 12,100 Furniture and fixtures 25,000Bank overdraft 9,000 Investments 49,000

Loan from Mr. Brandon 18,000 Sundry debtors 28,000

Trade creditors 21,700 Prepaid expenses 2,500

Bills receivable 17,000

Loan from Mr. Beckham 15,000

Closing stock 16,000

Cash in hand 21,000

3,93,500 3,93,500

SOLUTION



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SOLVE THE PROBLEM

EXERCISE 1


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Particular Amount Particular Amount

To opening stock 86,5000 By sales 3,78,000

To purchases 1,78,000 By closing stock 1,56,000To freight 9,850 By goods loss by fire 17,000

To wages 36,150

Add outstanding wages 6,000 42,150

To gross profit c/d 2,84,500

5,51,000 5,51,000

TRADING ACCOUNT FOR THE YEAR 31-03-2007

PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDING 31-03-2007


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Particular Amount Particular Amount

To stationary 17,000 By gross profit b/d 2,84,500

To mobile phone bills 12,500

To insurance 16,800

Less prepaid insurance 12,600 4,200

To salaries 26,000

Add outstanding salary 17,075 43,075

To bad debts 2,500

Add F.B.D. 2,500

5,000

Add N.R.D.D. 4,000 9,000

To travelling expenses 8,500To value added tax 11,700

To interest on loan 10,125

To depreciation on furniture 12,000

To depreciation on motorcar 45,000

To loss by fire 6,000

PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDING 31-03-2007

BALANCE SHEET AS ON 31-03-2007


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Narands capital 2,50,000 Debtors 42,500

Add net profit 63,240 3,13,240 Less F.B.D 2,500

40,000

Surands capital 1,50,000 Less N.R.D.D. 4,000 36,000

Add net profit 42,160 1,92,160 Furniture 80,000

Less depreciation 12,000 68,000

Creditors 99,500 Building 2,50,000Bank loan 90,000 Cash in hand 23,000

Add interest on loan 10,125 1,00,125 Motor car 1,80,000

Outstanding rent 11,500 Less depreciation 45,000 1,35,000

Outstanding wages 6,000 Closing stock 1,56,000

Outstanding salary 17,075 Prepaid insurance 12,600

Bills receivable 48,000

Insurance (loss by fire) 11,000

7,39,600 7,39,600

BALANCE SHEET AS ON 31 03 2007


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PROBLEM ON VERTICAL

BALANCE SHEET


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Liabilities Amount Assets amount

Share capital Fixed assets

Authorized, issued and subscribed capital 9,00,000 Machinery 7,90,000

Reserve and surplus Investments

General reserve 1,20,000 UTI bonds 2,05,000

Secured loan Current assets loans andadvance

Loan from bank 3,30,000 Current assets

Unsecured loan Trade debtors 3,00,000

Public deposit 1,20,000 Cash at bank 1,75,000

Current liabilities and provision Loan and advances

Current liabilities Bills receivable 70,000

Trade creditors 50,000 Miscellaneous expenditure NIL

Provision

Provision for tax 20,000

THE FOLLOWING IS THE BALANCE SHEET OF EVERGREEN LIMITED AS ON

31ST MARCH 2009. PREPARE VERTICAL BALANCE SHEET OF THE FOLLOWING


SOLUTION


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Particular Amount Amount

SOURCES OF FUNDS

A) Share capital

Authorized capital, issued capital , subscribed capital 9,00,000 9,00,000

B) Reserve and surplus

General reserve 1,20,000 1,20,000

Shareholders funds/ net profit (A+B) 10,20,000

C) Loan funds

Secured loan

Loan from bank 3,30,000

Unsecured loan

Public deposit 1,20,000 4,50,000

Total capital employed (A+B+C) 14,70,000

SOLUTIONBalance sheet as on 31:12:2011

Particular Amount amount


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Particular Amount amount

APPLICATION OF FINDS

A) Fixed assets

Machinery 7,90,000 7,90,000

B)Investment

UTI bond 2,05,000 2,05,000

C) Current assets loan and advances

Current assets

Trade debtors 3,00,000Cash at bank 1,75,500

Loan and advances

Bills receivable 70,000 5,45,000

Less current liabilities and provision

Current liabilities

Trade creditors 50,000

Provision

Provision for tax 20,000 70,000 4,75,000

D) miscellaneous expenditure ------


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BANK RECONCILIATION STATEMENT

Cash bookbusinessman, pass book- bank

Same transactions recorded- balance must match

At times balance dont agreeStatement showing items of difference betweencash and pass book


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CAUSES OF DIFFERENCE

Cheque issued but not presented for payment

Cheque deposited in bank but not collected

Interest allowed and credited by the bank

Collection of dividend by the bank

Dishonor of cheque

Interest charged or bank chargers debited in pass book


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NEED AND IMPORTANCE OF BANK RECONCILIATION

STATEMENT

Bring out errors committed

Show undue delay in clearance of cheque

Frauds by entrepreneur's or bank staff can be detected


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Amount AmountBalance as per cash book/ pass book xx

Cheque issued but not presented to bank for payment xx

Cheque drawn but not actually issued to parties xx

Cheque issued to parties but dishonored by bank xx

Wrong or excess credit in cash book xx

Cheque or bank directly paid in bank by others xx

Cheque deposited in the bank but not debited in cash book` xx

Cheque issued but not credited in cash book xx

Cheque debited in cash book but not deposited xx

Wrong or excess debit in cash book xx

Bank charges, interest on overdraft xx

Direct payment by bank xx

Bank balance as per cash book/ pass book xxTotal xx xx

FORMAT OF A BANK RECONCILIATION STATEMENT

Bank reconciliation statement as on .


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Cash book balance Rs. 1,500Cheque deposited but not collected by bank Rs. 500

Direct deposit made by customers Rs. 400

Insurance premium paid by bank Rs. 100Bank charges Rs. 600

Dividend collected by bank Rs. 300

RECTIFY THE CASH BOOK


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Amount Amount

Balance as per cash book 1,500

Cheque deposited but not collected by bank 500

Direct deposit made by customer 400

Insurance premium paid by bank 100

Bank charges 600

Dividend collected by bank 300

Balance as per pass book 2,200 2,200

SOLUTION

Bank reconciliation statement


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The cash book shows a bank balance of 7,800 on comprisingthe cash book with the pass book. The following

discrepancies were found

Cheque deposited in bank but not credited Rs. 3,000

Cheque issued but not yet presented for payment Rs.1,500

Insurance premium paid by bank Rs. 400

Bank charges Rs. 100

Direct deposit by customers Rs. 4000

Prepare bank reconciliation statement as on 31 march 2009

SOLVE THE FOLLOWING


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Documents

balane sheet