CA Foundation · Accounting · Company Accounts
Iyer Ltd. has equity share capital ₹10,00,000, securities premium ₹1,00,000, general reserve ₹2,00,000, surplus (balance in Statement of P&L) ₹1,50,000, 10% debentures ₹4,00,000 (due in 4 years), trade payables ₹1,20,000 and provision for tax ₹30,000. What is the total of the Equity and Liabilities side?
The total of Equity and Liabilities is ₹20,00,000. Shareholders' funds are ₹14,50,000, non-current liabilities are ₹4,00,000 for debentures, and current liabilities are ₹1,50,000 including the provision for tax. Leaving out the provision would wrongly give ₹19,70,000.
- A₹20,00,000Correct
- B₹19,70,000
- C₹20,30,000
- D₹16,00,000
Explanation
Shareholders' funds = 10,00,000 + 1,00,000 + 2,00,000 + 1,50,000 = 14,50,000. Non-current liabilities = 4,00,000. Current liabilities = 1,20,000 + 30,000 = 1,50,000. Total = 14,50,000 + 4,00,000 + 1,50,000 = ₹20,00,000. Omitting the provision for tax gives ₹19,70,000.
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