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CA Intermediate · Advanced Accounting · Financial Statements of Companies

Meghdoot Textiles Ltd. had the following balances on 31 March 2026: Securities premium Rs 4,00,000, General reserve Rs 6,00,000, Surplus in Statement of Profit and Loss (credit) Rs 2,50,000, and Capital redemption reserve Rs 1,00,000. As per Schedule III (Division I), what amount will be shown under the head 'Reserves and Surplus' in the Balance Sheet?

The Reserves and Surplus head shows Rs 13,50,000, being the sum of securities premium, general reserve, capital redemption reserve and the credit balance of the Statement of Profit and Loss. All four items are classified under this head in Schedule III, so none is excluded.

  1. ARs 12,50,000
  2. BRs 13,50,000Correct
  3. CRs 9,50,000
  4. DRs 10,50,000

Explanation

Reserves and Surplus includes securities premium, general reserve, capital redemption reserve and the surplus in the Statement of Profit and Loss. Total = 4,00,000 + 6,00,000 + 2,50,000 + 1,00,000 = Rs 13,50,000. Rs 12,50,000 wrongly omits the capital redemption reserve.

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