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CA Intermediate · Advanced Accounting · Financial Statements of Companies

Kaveri Textiles Ltd. has the following balances at 31 March 2026: Equity share capital Rs 50,00,000; Securities premium Rs 8,00,000; General reserve Rs 12,00,000; Surplus in Statement of Profit and Loss (credit) Rs 5,00,000; Capital reserve Rs 2,00,000. Under Schedule III (Division I), what is the total to be shown under 'Reserves and Surplus' in the balance sheet?

Reserves and Surplus is Rs 27,00,000. Under Schedule III it includes securities premium, general reserve, capital reserve and the credit balance in the Statement of Profit and Loss, but not share capital, which is a separate head within shareholders' funds.

  1. ARs 27,00,000Correct
  2. BRs 25,00,000
  3. CRs 77,00,000
  4. DRs 20,00,000

Explanation

Reserves and Surplus includes securities premium, general reserve, capital reserve and the surplus in the Statement of Profit and Loss: 8,00,000 + 12,00,000 + 2,00,000 + 5,00,000 = Rs 27,00,000. Rs 25,00,000 wrongly omits capital reserve. Rs 77,00,000 wrongly adds share capital, which is shown under Shareholders' Funds separately.

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