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CA Intermediate · Advanced Accounting · Financial Statements of Companies

Sundaram Textiles Ltd. has a Securities Premium balance of Rs 4,00,000 and a General Reserve of Rs 6,00,000. While preparing its balance sheet as per Schedule III (Division I), the accountant also has: Surplus (credit balance in Statement of Profit and Loss) Rs 2,50,000 and Capital Redemption Reserve Rs 1,00,000. What is the total to be shown under 'Reserves and Surplus'?

Reserves and Surplus under Schedule III includes securities premium, general reserve, capital redemption reserve and the surplus in the Statement of Profit and Loss. Adding 4,00,000, 6,00,000, 1,00,000 and 2,50,000 gives Rs 13,50,000.

  1. ARs 13,50,000Correct
  2. BRs 12,50,000
  3. CRs 10,00,000
  4. DRs 11,50,000

Explanation

Reserves and Surplus includes Securities Premium, General Reserve, Capital Redemption Reserve and the surplus balance. Total = 4,00,000 + 6,00,000 + 2,50,000 + 1,00,000 = Rs 13,50,000. Rs 12,50,000 wrongly leaves out Capital Redemption Reserve.

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