Question No.

From the following transactions of a manufacturing company, which have taken place in the year
2018-19, prepare a Statement of Profit & Loss for the year ended on 31 st March, 2019 and
Balance sheet as on 31st March, 2019

1. Company has issued 1,20,000 Equity shares of Rs.10 each and received Rs.12,00,000 in
its Bank account.
2. Company has taken a premises to be used as Factory and Office on rental basis and has
paid rent of Rs.1,20,000 through cheque.
3. Company has taken a Long Term Loan of Rs.6,00,000 from Punjab National Bank.
4. Company has purchased Machinery costing Rs.4,50,000, Furniture of Rs.1,50,000 and
Computers of Rs.50,000 and paid through cheque.
5. During the year company has purchased raw material of Rs.9,50,000 ( out of which
amount not yet paid to supplier on Balance sheet date Rs.1,50,000), Employee Benefit
Expenses Rs.60,000 which is paid in full and Other operating expenses Rs.3,50,000 were
also paid in full.
6. Company has achieved sales of Rs.21,00,000 ( out of which amount not yet received
from customers on Balance sheet date Rs.4,50,000)
7. For the first year company has paid interest on Bank loan to the extent of Rs.70,000 and
Rs.1,00,000 towards principle loan amount.
8. Company has made investment of Rs.5,00,000 in shares of TCS .
9. At the end of the year Depreciation @10% is charged on Fixed Assets .
10. Raw Material lying in stores on 31st March, 2018 is Rs.70,000 and corporate Tax paid
Rs.2,00,000.
11. Received divided of Rs.5,000 from TCS
12. Corporate Tax paid @ 30%

Question No.2

Mr.Nitin a Bachelor in Science and MBA, started a small manufacturing unit near Pune by forming a
private company. He and his four friends subscribed for total 1,00,000 equity shares of a nominal value of
Rs.10/- per share.

Company has also taken a loan of Rs.5,00,000 at 14% interest from a bank.

Company has purchased following assets

A Building consisting of Plot of Rs.3,00,000 and factory building Rs.2,00,000, Machinery of Rs.2,50,000,
Furniture of Rs.60,000, Computer of Rs.40,000 and software of Rs.20,000 with immediate payment.

During the year company has incurred following expenses

Purchase of Material Rs.11,50,000, Employee Benefit Expenses Rs.1,00,000, Repairs & Maintenance
Rs.22,000, Power & Fuel Rs.60,000, Rent for office building Rs.1,20,000, Other operating expenses
Rs.4,60,000, Interest on bank loan Rs.70,000. All expenses are paid in full on 31st March, 2018 except
Rs.1,50,000 for purchase of material and salary of Rs.10,000 for the month of March.

Company has achieved sales of Rs.26,00,000 out of which amount not yet received from customers as on
31st March, 2018 is Rs.75,000. At the end of the year company has charged depreciation on Building @
5% , on Machinery and Furniture @10% and on computer 20%. Software is amortized at 25%.

Prepare Profit & Loss Account for the year ended on 31st March, 2018 and Balance sheet as on 31st
March, 2018 assuming that material lying in stores at the end of the year is Rs.60,000 and repayment of
loan amount Rs.40,000. Company has paid corporate tax @30% on its profit.

Question No.3

Sagar Plastics started their manufacturing business in April, 2018 and has given following
transactions which has taken place during the year . Prepare Profit & Loss Account for the year
2018-19 and Balance Sheet of the company as on 31st March, 2019 and give your comments.

1. Introduced Rs.10,00,000 towards Equity share capital by depositing money in companies

bank account .
2. Formation expenses of Rs.50,000 were duly paid through cheque and charged to Profit &
Loss Account as expenses.
3. Company approached Corporation Bank and accepted a secured Term loan of Rs.800,000
@ 14% interest p.a. In the first year company paid only interest of Rs.98,000 to the bank.
Installment towards principle will start from the second year.
4. Company purchased various tangible fixed assets of Rs.11,00,000 out of which Land cost
is Rs.5,00,000.
5. Investment of Rs.1,00,000 is made in the shares of Dewan Housing Finance Corporation
( DFHL) and paid through cheque.
6. Sale for the year were made for Rs.19,50,000 out of which amount not yet received from
customers is Rs.1,50,000.
7. During the year company has paid following expenses - Purchase of material Rs.
12,50,000 Wages & Salaries Rs.1,50,000, other operating expenses Rs.7,20,000.
8. Material lying in stores at the end of the year was Rs.1,00,000.
9. Depreciation is to be charged @10% on Fixed assets.
10. At the end of the year investment made in shares of DFHL were sold at Rs.75,000.