Answered: an authorized capital of Rs. 6,00,000…

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter14: Corporation Accounting

Section: Chapter Questions

Problem 7EB: Silva Company is authorized to issue 5,000,000 shares of $2 par value common stock. In its IPO, the...

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A limited was registered with an authorized
capital of Rs. 6,00,000 in equity shares of Rs. 10
each. The following is its Trial balance on
31st March 2008
Debit Credit
Rs. Rs.
Goodwill 25,000
Cash 750
Bank 39,900
Purchases 1,85,000
Preliminary expenses 5,000
Share capital 4,00,000
12% Debentures 3,00,000
P and L account 26,250
Calls-in-arrears 7,500
Premises 3,00,000
Plant and Machinery 3,30,000
Interim dividend 39,250
Sales 4,15,000
Opening stock 75,000
Furniture 7,200
Sundry debtors 87,000

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3) Goodwill Ltd. was registered with a Nominal capital of Rs. 5000000 divided into Equity shares of Rs. 100 each.
The following Trial Balance is extracted from the books on 31st March,2021
Debits	Rs	Credits	Rs
Buildings	2900000	Sales	5200000
Machinery	1000000	Outstanding Salaries	20000
Closing Stock	900000	Provision for Bad Debts	30000
Purchases (adjusted)	2100000	Equity share Capital	2000000
Salaries	600000	General Reserve	450000
Staff Welfare Expenses	100000	Profit & Loss	250000
Rent	260000	Sundry Creditors	920000
Depreciation on building	80000	Accumulated depreciation on building	500000
Depreciation on machinery	120000	Accumulated depreciation on machinery	550000
Bad Debts	60000	14% Debentures	2000000
Accrued interest on investment	20000	Interest on investment	260000
Investment	1200000
Interest on Debentures	280000
Loose Tools	230000
Advance Tax (AY 2011-12)	600000
Misc Expenses	180000
Sundry Debtors	1250000
Cash at bank	300000
TOTAL	12180000		12180000
You are required to prepare Profit & Loss Statement for the year ending 31st March,2021 and Balance Sheet as on that date
after taking into consideration the following information:
a) Make a provision for Income tax for Rs. 760000
b) Provision for doubtful debts @ 4% on debtors
c) Closing stock is more than opening stock by Rs. 300000

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