CA Foundation · Accounting · Company Accounts
At 31 March, Desai Ltd. had: Equity share capital ₹10,00,000; Statement of P&L (credit balance) ₹2,00,000; General reserve ₹1,50,000; Long-term borrowings ₹4,00,000; Trade payables ₹1,20,000; Proposed dividend (not yet declared at the balance sheet date) ₹80,000. What is the amount of Shareholders' funds?
Shareholders' funds are ₹13,50,000, being share capital ₹10,00,000, general reserve ₹1,50,000 and surplus in the Statement of P&L ₹2,00,000. Proposed dividend not yet declared is not provided as a liability, and borrowings and trade payables are outside shareholders' funds.
- A₹13,50,000Correct
- B₹14,30,000
- C₹12,70,000
- D₹17,50,000
Explanation
Shareholders' funds = Share capital 10,00,000 + General reserve 1,50,000 + Surplus 2,00,000 = ₹13,50,000. Proposed dividend not declared before the balance sheet date is not a liability (AS 4) and is only disclosed in notes, so deducting it gives the wrong figure ₹12,70,000 and adding it gives ₹14,30,000. Borrowings and payables are not part of shareholders' funds.
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