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CA Intermediate · Advanced Accounting · Financial Statements of Companies

Sundaram Textiles Ltd. had the following balances on 31 March 2027: Securities premium Rs 8,00,000; General reserve Rs 5,00,000; Surplus in Statement of Profit and Loss (credit) Rs 3,00,000; Capital redemption reserve Rs 2,00,000; Capital 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 amount is Rs 19,00,000. Under Schedule III, Reserves and Surplus covers capital reserve, capital redemption reserve, securities premium, general reserve and the credit balance in the Statement of Profit and Loss. Adding all five balances gives 8 + 5 + 3 + 2 + 1 lakh, which equals Rs 19,00,000.

  1. ARs 19,00,000Correct
  2. BRs 17,00,000
  3. CRs 16,00,000
  4. DRs 18,00,000

Explanation

Reserves and Surplus includes capital reserve, capital redemption reserve, securities premium, general reserve and the surplus balance. Total = 8,00,000 + 5,00,000 + 3,00,000 + 2,00,000 + 1,00,000 = Rs 19,00,000. Rs 16,00,000 wrongly omits capital reserve and capital redemption reserve partly, and Rs 17,00,000 omits the capital reserve and surplus-type item incorrectly.

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