Class 12 Accountancy

Chapter 3 Solutions — Financial Statements of a Company

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Solutions

Overview

Step-by-step NCERT solutions for Financial Statements of a Company (Chapter 3, CBSE Class 12 Accountancy) — every question and answer worked out in full, not just the final result. You can also read the Financial Statements of a Company textbook chapter.

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What these solutions cover

All 20 questions in Financial Statements of a Company are solved in the PDF. Here's what's inside, exercise by exercise:

Short & Long Answer Questions

State the meaning of financial statements.
What are limitations of financial statements?
List any three objectives of financial statements.
4.
State the importance of financial statements to:
- (i) shareholders,
- (ii) creditors,
- (iii) government,
- (iv) investors.
5.
How will you disclose the following items in the Balance Sheet of a company:
- (i) Current assets, inventory;
- (ii) Contingent liabilities in notes to accounts;
- (iii) Shareholders Funds, Reserve and Surplus;
- (iv) Fixed Assets, Intangible Assets;
- (v) Proposed Dividend for the current year;
- (vi) Non Current Liabilities;
- (vii) Arrears of Dividend on Cumulative Preference Shares.
Explain the nature of the financial statements.
Explain in detail about the significance of the financial statements.
Explain the limitations of financial statements.
Prepare the format of statement of profit and loss and explain its items upto the ascertainment of profit before tax.
Prepare the format of balance sheet and explain the various elements of balance sheet.
Explain how financial statements are useful to the various parties who are interested in the affairs of an undertaking.
'Financial statements reflect a combination of recorded facts, accounting conventions and personal judgements'. Discuss.
Explain the process of preparing income statement and balance sheet.

Numerical Questions

Show the following items in the balance sheet as per the provisions of the Companies Act, 2013 in Schedule III: Preliminary Expenses Rs. 2,40,000; Discount on issue of shares Rs. 20,000; 10% Debentures Rs. 2,00,000; Stock in trade Rs. 1,40,000; Cash at bank Rs. 1,35,000; Bills receivable Rs. 1,20,000; Goodwill Rs. 30,000; Loose tools Rs. 12,000; Motor Vehicles Rs. 4,75,000; Provision for tax Rs…
On April 1, 2017, Jumbo Ltd. issued 10,000; 12% debentures of Rs. 100 each at a discount of 20%, redeemable after 5 years. The company decided to write-off discount on issue of such debentures on March 31, 2018. Show the items in the balance sheet of the company immediately after the issue of these debentures.
From the following information prepare the balance sheet of Gitanjali Ltd.: Inventories Rs. 14,00,000; Equity Share Capital Rs. 20,00,000; Plant and Machinery Rs. 10,00,000; Preference Share Capital Rs. 12,00,000; Debenture Redemption Reserve Rs. 6,00,000; Outstanding Expenses Rs. 3,00,000; Proposed Dividend Rs. 5,00,000; Land and Building Rs. 20,00,000; Current Investments Rs. 8,00,000; Cash…
From the following information prepare the balance sheet of Jam Ltd.: Inventories Rs. 7,00,000; Equity Share Capital Rs. 16,00,000; Plant and Machinery Rs. 8,00,000; 8% Preference Share Capital Rs. 6,00,000; General Reserves Rs. 6,00,000; Bills payable Rs. 1,50,000; Provision for taxation Rs. 2,50,000; Land and Building Rs. 16,00,000; Non-current Investments Rs. 10,00,000; Cash at Bank Rs…
Prepare the balance sheet of Jyoti Ltd., as at March 31, 2017 from the following information: Building Rs. 10,00,000; Investments in the shares of Metro Tyers Ltd. Rs. 3,00,000; Stores & Spares Rs. 1,00,000; Statement of Profit and Loss (Dr.) Rs. 90,000; 5,00,000 Equity Shares of Rs. 20 each fully paid-up; Capital Redemption Reserve Rs. 1,00,000; 10% Debentures Rs. 3,00,000; Unpaid dividends Rs…
6.
Brinda Ltd. has furnished the following information:
- (a) 25,000, 10% debentures of Rs. 100 each;
- (b) Bank Loan of Rs. 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 at March 31, 2017.
Prepare a balance sheet of Black Swan Ltd., as at March 31, 2017 from the following information: General Reserve Rs. 3,000; 10% Debentures Rs. 3,000; Balance in Statement of Profit and Loss Rs. 1,200; Depreciation on fixed assets Rs. 700; Gross Block Rs. 9,000; Current Liabilities Rs. 2,500; Preliminary Expenses Rs. 300; 6% Preference Share Capital Rs. 5,000; Cash & Cash Equivalents Rs. 6,100.

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