Program BACHELOR OF COMMERCE (B.
Com)
Semester and Section VI A & B
Course Code & Course C21 DCA 6.4: INDIAN ACCOUNTING STANDARDS-I
Unit No. & Title II – PREPARATION OF FINANCIAL STATEMENTS AS PER IND
AS 01
Frame work for preparation of Financial Statements, presentation of Financial
Statement as per Ind AS 1. Statement of Profit and Loss, Balance Sheet,
Syllabus Statement of changes in Equity, statement of Cash flow and Notes to accounts.
Problems on preparation of Statement of Profit and Loss and Balance Sheet
as per Schedule III of Companies Act, 2013
Duration 9 Hrs
Prof. Prof Preethi G S and Prof Adeeba Ahamed
Subject Instructor
Department of Commerce, IADC – A
Meaning of Financial Statement [2(40)] of Companies Act 2013: 2Marks
A business is an economic activity which aims at earing the profit. A set of financial statements are prepared in
order to know the financial results and financial position of a business and how its financial position changed over
time.
In relation to company includes:
a) The balance sheet at the end of the period
b) Statement of profit and loss for the period
c) Statement of cash flows for the period
d) Statement of changes in equity for the period
e) Notes including a summary of significant accounting policies and other explanatory information
In general:
Financial statement is prepared to know the financial results and financial position of the entity for a given period
of time.
Structure and content of Financial Statements
Financial statements must be identified and distinguished from other information in the same published document
and must specify:
a) Name of the reporting entity
Page 1 of 13
b) Whether the financial statements support the individual entity or a group of entities
c) The date of the financial statements
d) The presentation currency
e) The level of rounding up, if any
Balance sheet:
a) Present Current and non-current items separately; or
b) Present items in order of liquidity i.e. current and non- current assets / liabilities
Reporting period:
a) Accounts presented at least annually
b) If longer or shorter, the entity must disclose the fact.
Statement of cashflows
Provides user of financial statements with cash flow information- refer to IND AS 7, statement of cash flows.
Statement of profit & loss
An entity shall present a single declaration of profit and loss, with profit or loss and other inclusive income
presented in two sections. Entities shall present an analysis of expense recognized in profit or loss using a
classification based on the expense method’s nature.
Statement of changes in equity:
Information required to be presented:
a) Total income for the period, showing separately understandable to owners or the parent and non-
controlling interest.
b) Each component in equity reconciliation between the carrying amount at the beginning and end of the
period was individually disclosing each change.
c) Amount of portion accepted as distributions to owners during the period.
Formats as per revised scheduled of Companies Act 2013
Statement of profit and loss account for the year ending…
Particulars Note Amount Amount
I) Revenue from operation XXX
II) Other income XXX
III)Total Income ( I+II) XXX
IV) Expenses
Cost of raw material purchased
Page 2 of 13
Purchase of stock in trade XXX
Changes in inventories of finished goods, WIP
and stock in trade (O/S-C/S) XXX
XXX
Employees benefits expenses XXX
Financial cost XXX
Depreciation and Amortization XXX
Other expenses XXX
Total Expenses XXX
V. Profit or loss before exceptional items and tax (III- IV)
XXX
VI. Exceptional items
VII. Profit/loss Before Tax (V-VI)
Tax expenses
1. Current tax
2. Deferred tax
Less: profit/loss after tax (VII-VIII) XXX
Earning Per Equity share (for continuing operation)
1. Basic
2. Diluted
Working Notes:
Revenue from operations:
Particulars Amount Amount
Cash sales XXX
Add: Credit sales XXX
XXX
Less: Sales return or return inwards XXX
Excise duty XXX
Revenue from operations XXX
Other income:
Particulars Amount
Interest income XXX
Dividend income XXX
Net gain or loss on sale of investments XXX
Discount received XXX
Page 3 of 13
Commission received XXX
Income tax refund XXX
Other non-operating income XXX
Expenses:
Cost of material consumed
a. Purchases of stock in trade
Cash purchases XXX
Credit purchases XXX
XXX
Less: purchase returns
Add: Carriage inward XXX
Custom duty XXX
XXX XXX
b. Changes in inventories
Opening stock of raw material XXX
Opening stock of work in progress XXX
Opening stock of Finished goods XXX XXX
Less:
Closing stock of raw material XXX
Closing stock of work in progress XXX
Closing stock of finished goods XXX XXX
XXX
Total of cost of material consumed XXX
Employee benefit expenses
Salary + outstanding XXX
Wages+ outstanding XXX
Bonus XXX
ESI expenses
Contribution to PF and other funds XXX
Gratuity XXX
Total Employee benefit Expenses XXX
Finance Cost
Interest on debentures XXX
Add: outstanding interest on debentures
XXX
Accrued interest on bank loan XXX
Other borrowing cost XXX
Total Finance Cost XXX
Page 4 of 13
Depreciation and Amortization
Cost of Fixed asset X rate of depreciation XXX
Cost of Intangible asset X rate of Amortization XXX
XXX
Other expenses
Fright XXX
Power, fuel, electricity XXX
Coal XXX
Free samples XXX
Showroom expenses XXX
Preliminary expenses written off XXX
Advertisement and sales promotion exp XXX
Discount allowed XXX
Travelling expenses XXX
Selling expenses XXX
Rent XXX
Commission paid XXX
Testing fees XXX
Insurance XXX
Add: outstanding XXX
Less: Prepaid XXX
Printing and stationery XXX
General expenses XXX
Office and administration expenses XXX
Carriage outward XXX
Audit fees XXX
Director fees XXX
Manufacturing expenses XXX
Factory expenses XXX
Trade expenses XXX
Driver salary XXX
Bad debts XXX
Add: Further Bad debts XXX
Add: Provision for Bad debts XXX
Less: Last year provision for bad debts XXX
Total of other expenses XXX
Page 5 of 13
Statement of Balance sheet / Financial Position of …………. Company as on as per Schedule III of
Companies Act:
Particulars Note Amount ₹
Assets
Non- Current Assets
Property, Plant and Equipment
Capital Work in Progress
Investment Property
Good will
Other Intangible Assets
Financial Assets
Investments
Loan and Advances
Deferred tax assets (net)
Other non-current assets
Current assets
Inventories
Financial assets
Investments
Trade receivables
Cash and Cash equivalents
Bank balances
Short term loans
Others
Other current assets
Total assets
Equity and liabilities
Equity
Equity share capital
Other equity/Reserve and surplus
Liabilities
Non-Current Liabilities
Financial Liabilities
Borrowings
Long term provisions
Deferred tax liabilities
Other non- Current liabilities
Current Liabilities
Financial liabilities
Borrowings
Trade payables
Short term provisions
Current Tax Liabilities(net)
Total Equity and liabilities
Page 6 of 13
NUMERICAL EXAMPLES: 4/ 12 Marks
1. You are given the following extracts of ledger balances taken from Shankar Limited for the
year ending 31/3/2024, Prepare Income Statement. 4 Marks
Particulars ₹
Revenue from operations 98,000
Other income 2,000
Advertising 5,250
Salaries 27,000
Depreciation 2,800
Insurance 1,000
Interest on debentures 1,000
Preliminary expenses written off 1,000
Bad debts 500
Discount 500
Printing and Stationery 1,000
Cost of materials consumed 25,000
2. From the following balances of Kumar Company Ltd. for the year ending 31/3/2023. Prepare
Income Statement. 4 Marks
Particulars ₹
Interest on Debentures 32,400
Travelling expenses 15,000
Delivery van expenses 5,000
Bad debts 6,000
Discount 7,000
Purchase of stock in trade 3,15,000
Opening stock 75,000
Freight Charges 8,000
Depreciation 25,000
Insurance 5,000
Commission Received 7,500
Sales 6,50,000
Share transfer fees 5,000
3. From the following Trial Balance of Balu Company. ltd., as on 31st March 2024. Prepare
Statement of Profit and Loss as per Schedule III of the Companies Act. 4 Marks
Particulars ₹
Sales 6,00,000
Page 7 of 13
Employees benefits expenses 25,000
Depreciation and amortization expenses 25,000
Tax during the year 40,000
Cost of materials 50,000
Purchase of stock in trade 75,000
Other income 1,00,000
Opening stock 1,00,000
Closing stock 1,25,000
4. From the following Trial balance of Kumari Company Ltd, as on 31-02-2024. Prepare a
Statement of Profit and Loss Account as per Schedule III of Companies Act. 4 Marks
Particulars ₹
Bad debts 1,00,000
Conveyance 1,20,000
Loss on sale of machinery 1,40,000
Employee benefits expenses 1,50,000
Insurance 1,50,000
Closing stock 7,50,000
Depreciation and amortization expenses 1,00,000
Purchase of stock in trade 5,00,000
Opening stock 5,00,000
Cost of materials 5,00,000
Sales 50,00,000
Tax during the year 3,50,000
Other incomes 1,00,000
5. From the following details prepare Income Statement for the year ended 31 March 2024 of
Vijaya limited. 4 Marks
Particulars ₹
Depreciation and amortization expenses 20,000
Finance cost 50,000
Deferred tax 10,000
Employee benefit expenses 50,000
Changes in inventories of finished 1,00,000
goods,
Work-in progress and stock in trade
Current tax expense for current year 50,000
Purchase of stock in trade 3,00,000
Cost of materials consumed 8,00,000
Revenue from operations(gross) 16,00,000
Page 8 of 13
6. From the following Trial Balance of Ruthvika Company Limited as on 31 March 2024.
Prepare a Comprehensive Income Statement as per schedule III of Companies Act.
12Marks
Particulars ₹ Particulars ₹
Depreciation on Premises 8,000 Sales 12,40,000
Materials Consumed 8,00,000 Equity Share Capital 8,00,000
Opening Stock 40,000 Outstanding wages 6,000
Bad debts 3,800
Bonus to employees 20,000
Interest on loan 16,000
Depreciation on Machinery 18,000
Conveyance 4,000
Loss on sale of machinery 20,000
Insurance 16,200
Sales returns 40,000
Provision for taxation 60,000
Machinery 6,00,000
Salary 1,14,000
P.F Contribution 86,000
Premises 1,60,000
Computer 40,000
20,46,000
Closing stock is valued at ₹1,20,000.
7. From the following Balances extracted on 31 March 2023 from the books of Modern Ltd.,
prepare Statement of Financial Performance in the form prescribed by Schedule III of
Companies Act. 12Marks
Particulars ₹ ₹
Land 80,000
Share capital 6,30,000
Building 2,12,500
Calls-in-arrear 25,000
Trade Payable 6,18,000
Capital reserve 1,54,000
Stores 90,000
Wages due 29,000
Godown rent due 3,600
Stock in trade 2,50,000
Unexpired insurance 8,200
Cash in hand 1,25,000
Provision for employees’ benefit (long term) 15,000
Salaries due 3,500
Page 9 of 13
Bad debts provision 6,500
Cash at bank 69,000
Computer software 4,900
Plant and equipment 5,08,000
Loose tools 1,03,000
Trade receivables 1,20,000
Unclaimed dividend 5,000
Balance in Profit and loss Statement 1,58,000
15% debenture 1,00,000
Bank loan account 1,50,000
Investment in equity shares 2,50,000
Additional information:
a) Authorized capital of the company is ₹ 10,00,000 in equity shares of ₹10 each.70,000
shares were issued and 63,000 shares were subscribed by the public. Calls-in-arrear related
to 10,000 shares on which final call of ₹2.50 per share has not been paid
b) Bills discounted but not matured ₹40,000
8. From following Trial balance of Jai Limited prepare Balance Sheet of the Company as on 31st
March, 2024. 12 Marks
₹ Credit ₹
Debit
Cash at Bank 1,50,000 Equity share capital 2,50,000
Non-Current assets 1,00,000 Preference capital 2,50,000
Non-current 50,000 Reserves and 50,000
Investments Surplus
Land and Building 4,00,000 Non-current 4,00,000
Liabilities
Furniture 1,00,000 Current liabilities 1,00,000
Office Equipment 50,000 Staff Provident 1,00,000
Fund
Goodwill 1,00,000 Deposits from 1,00,000
Public
Stock 2,00,000
Trade receivables 1,00,000
Total 12,50,000 Total 12,50,000
9. From the following particulars, prepare a Balance Sheet of MMC Ltd. as on 31st March, 2024
(giving all the heads and sub-heads as per Schedule III): 12 Marks
Particulars ₹ in ‘000s
Share capital 50,000
Inventories 13,000
Page 10 of 13
Reserves and surplus 47,000
Tangible fixed assets 76,420
Share application money pending 5,300
Allotment
Current Investments 2,400
Long-term borrowings 10,000
Capital work-in-progress 5,800
Long-term Loans and advances 7,340
Short-term provisions 700
Other non-current assets 940
Trade receivables 3,600
Other current Liabilities 1,500
Cash and cash equivalents 1,400
Intangible assets under development 800
Trade payables 2,500
Long-term provisions 1,000
Other current assets 8,300
Other Long-term Liabilities 2,000
10. The following balances have been extracted from the books of Rabin Ltd. as on 31st March 2024:
12Marks
Particulars ₹
Share capital (equity shares of ₹ 10 each 10,00,000
fully paid)
Securities premium 1,00,000
12% debentures 4,00,000
Trade payables 2,00,000
Proposed dividend 50,000
Debit in statement of Profit & loss 30,000
Investments in Govt. Bonds 4,00,000
Work-in-progress 1,00,000
Patents 40,000
Unclaimed dividend 10,000
Trade receivables 20,000
Public deposits 50,000
Plant and equipment 6,00,000
Furniture and fixtures 1,00,000
Office equipment 2,00,000
Stock-in-trade 2,60,000
Stores and spares 40,000
Expenses on issue of debentures 20,000
Page 11 of 13
11. From the following Trial Balance of Jinx ltd. prepare statement of financial position of the
Company as on 31st March 2024: 12Marks
Debit ₹ Credit ₹
Cash at bank 7 5,000 Equity share capital 1,25,000
Non-current assets 50,000 Reserves and surplus 25,000
Non -current investments 25,000 Non-current Liabilities 2,00,000
Land and buildings 2,00,000 Current Liabilities 50,000
Furniture 50,000 Staff provident fund 50,000
Office equipment 25,000 Deposits from public 50,000
Goodwill 50,000 Preference capital 1,25,000
Stock 1,00,000
Debtors 50,000
Total 6,25,000 Total 6,25,000
SUBJECT INSTRUCTORS HOD
Page 12 of 13
Page 13 of 13
