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Question 5 Chapter 1 – V.K. Publication Class 12 Part 2 – 2021
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5. Active Machines Ltd. had the following opening balances in the Reserves and Surplus:
Transfer to Securities Premium Reserve
| Particulars | Rs. |
| Debenture Redemption Reserve 2,00,000 | 2,00,000 |
| Securities Premium Reserve | 4,00,000 |
| Surplus, i.e., Balance in Statement of Profit and Loss | 18,00,000 |
| The following appropriations to the profit earned were proposed: | |
| Transfer to Debenture Redemption Reserve | 8,00,000 |
| Transfer to General Reserve | 2,00,000 |
| Transfer to Securities Premium Reserve | 6,00,000 |
Profit after tax during the year amounted to Rs. 10,00,000.
Determine the amount to be shown in Notes to Accounts on Reserves and Surplus.
The company proposed a final dividend of Rs. 4,00,000 on its equity shares against last year’s proposed dividend of Rs. 6,00,000.
The solution of Question 5 Chapter 1 – V.K. Publication Class 12 Part 2: –
NOTES TO ACCOUNT
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| Particulars | Amount (Rs.) | ||
| Reserve and Surplus: | |||
| (a) Debentures Redemption Reserve | |||
| Opening Balance | 2,00,000 | ||
| Add: Transfer during the year | 8,00,000 | 10,00,000 | |
| (b) Securities Premium Reserve |
|||
| Opening Balance | 4,00,000 | ||
| Add: Transfer during the year |
6,00,000 | 10,00,000 | |
| (c) General Reserve |
|||
| Opening Balance | |||
| Add: Transfer during the year |
2,00,000 | 2,00,000 | |
| (c) Surplus, i.e, Balance in Statement of Profit and Loss |
|||
| Opening Balance | 18,00,000 | ||
| Add: Profit during the year | 10,00,000 | 28,00,000 | |
| Less: Appropriations | |||
| Transfer to DRR | 8,00,000 | ||
| Transfer to Securities Premium Reserve | 6,00,000 | ||
| Transfer to General Reserve | 2,00,000 | ||
| Proposed Dividend (previous year) | 6,00,000 | 22,00,000 | 6,00,000 |
| Balance of Reserves and Surplus [as shown in Balance Sheet (a) + (b)+(c)+(d)] |
28,00,000 |
Proposed dividend Rs. 4,00,000 (for the current year) will be shown in Notes-to-Accounts.
Financial Statements of a Company and Its formats
T.S. Grewal’s Double Entry Book Keeping +2 (Vol. I: Accounting for Not-for-Profit Organizations and Partnership Firms)
- Chapter No. 1 – Financial Statement of Not-For-Profit Organisations
- Chapter No. 2 – Accounting for Partnership Firms – Fundamentals
- Chapter No. 3 – Goodwill: Nature and Valuation
- Chapter No. 4 – Change in Profit-Sharing Ratio Among the Existing Partners
- Chapter No. 5 – Admission of a Partner
- Chapter No. 6 – Retirement/Death of a Partner
- Chapter No. 7 – Dissolution of a Partnership Firm
T.S. Grewal’s Double Entry Book Keeping (Vol. II: Accounting for Companies)
- Chapter No. 8 – Company Accounts – Accounting for Share Capital
- Chapter No. 9 – Company Accounts – Issue of Debentures
- Chapter No. 10 – Redemption of Debentures
T.S. Grewal’s Double Entry Book Keeping (Vol. II: Accounting for Companies)
- Chapter No. 1 – Financial Statements of a Company
- Chapter No. 2 – Financial Statement Analysis
- Chapter No. 3 – Tools of Financial Statement Analysis – Comparative Statements and Common- Size Statements
- Chapter No. 4 – Accounting Ratios
- Chapter No. 5 – Cash Flow Statement
Check out T.S. Grewal +2 Book 2020@ Official Website of Sultan Chand Publication