Skip to content

CMA Intermediate · Corporate Accounting and Auditing · Statement of Profit and Loss and Balance Sheet (Schedule III of Companies Act, 2013)

From the trial balance of Kaveri Ltd. as on 31 March: Equity share capital Rs 10,00,000; Securities premium Rs 1,50,000; Surplus (opening balance in Statement of Profit and Loss) Rs 2,00,000; Net profit for the year Rs 3,50,000; General reserve Rs 1,00,000. A dividend of Rs 1,00,000 was paid during the year out of the profits and appears as a debit in the trial balance. What is the total of 'Reserves and Surplus' in the balance sheet?

Reserves and Surplus is Rs 7,00,000. Surplus is opening 2,00,000 plus profit 3,50,000 less dividend 1,00,000, giving 4,50,000. Adding securities premium 1,50,000 and general reserve 1,00,000 gives the total. Share capital is excluded.

  1. ARs 7,00,000Correct
  2. BRs 8,00,000
  3. CRs 6,00,000
  4. DRs 9,00,000

Explanation

Surplus = 2,00,000 + 3,50,000 - 1,00,000 = 4,50,000. Reserves and Surplus = 1,50,000 + 1,00,000 + 4,50,000 = 7,00,000. Rs 8,00,000 results from ignoring the dividend paid. Share capital is not part of Reserves and Surplus.

Did you get it right without looking?

One question tells you little. A timed set on Statement of Profit and Loss and Balance Sheet (Schedule III of Companies Act, 2013) shows your real accuracy, how long you take and where you lose marks.

Practise Statement of Profit and Loss and Balance Sheet (Schedule III of Companies Act, 2013)Free diagnostic mock

More Statement of Profit and Loss and Balance Sheet (Schedule III of Companies Act, 2013) questions