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Group 6
Cyrus Berne R-11-02
Sagar Devarkar R-11-06
Oswinda Gomes R-11-17
Sahil Nerurkar R-11-23
Rincy Johnson R-11-31
Mohammad Ayaz R-11-36
BALANCE SHEET
AND BANK
RECONCILIATION
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Statement of financial position
INTRODUCTION
Left hand sideliabilities, right hand side - assets
Represent true financial position
Balance sheet always balances
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NEED AND IMPORTANCE
Knowledge of financial position
Comparison of current years position with last years
Find out current assets and current liabilities
Find out proprietors equity
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SPECIMEN OF A BALANCE SHEET
Balance sheet as on 31:12:2011
Liabilities Amount Assets Amount
Capital xxx Cash in hand xxxAdd interest on capital xxx Cash in bank xxx
xxx Prepaid expenses xxx
Less drawings xxx Bills receivable xxx
xxx Sundry debtors xxx
Add net profit xxx xxx Less bad debts xxx
Bills payable xxx xxx
Sundry creditors xxx Less new R.D.D xxx xxx
Outstanding expenses xxx Closing stock xxx
Bank loan xxx Motor van xxx
Bank overdraft xxx Less depreciation xxx xxx
Interest received in advance xxx Land xxx
Add appreciation xxx xxx
xxx xxx
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MARSHALING OF BALANCE SHEET
For registered companies- prescribed form
Liquidity order
Permanency or fixed order
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Liquidity Amount Assets Amount
Bank overdraft xxx Cash in hand xxx
Outstanding expenses xxx Cash at bank xxx
Income received in advance xxx Prepaid expenses xxx
Bills payable xxx Accrued income xxx
Loan creditors xxx Bills receivable xxx
Trade creditors xxx Sundry debtors xxx
Long term loans xxx Closing stock xxx
Reserve and surplus xxx Investment (long term) xxx
Capital xxx Furniture and fixtures xxxPlant and machinery xxx
Land and building xxx
Trade mark xxx
Goodwill xxx
xxx xxx
SPECIMEN OF A LIQUIDITY ORDER BALANCE SHEET
Balance sheet as on 31:12:2011
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SPECIMEN OF A PERMANENCY ORDER BALANCE SHEET
Balance sheet as on 31:12:2011Liquidity Amount Assets Amount
Capital xxx Goodwill xxx
Reserve and surplus xxx Trademarks xxx
Long term loan xxx Land and building xxx
Trade creditors xxx Motor van xxx
Loan creditors xxx Furniture and fixtures xxx
Bills payable xxx Investments (long term) xxx
Outstanding expenses xxx Closing stock xxx
Income received in advance xxx Sundry debtors xxx
Bank overdraft xxx Bills receivable xxxAccrued income xxx
Prepaid expenses xxx
Cash in bank xxx
Cash in hand xxx
xxx xxx
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IMPORTANCE OF MARSHALING OF BALANCE SHEET
Systematic flow of information
Decision making
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PRESENTING OF A BALANCE SHEET
Vertical format- single column on right hand side
Horizontal formatt format
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BALANCE SHEET OF A PARTNERSHIP FIRM
Similar in many cases- certain special features
Partnership, sole- proprietor no prescribed format
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Liabilities Amount Assets Amount
A partners capital xxx Goodwill xxx
Less drawings xxx Plant and machinery xxx
xxx Less depreciation xxx xxx
Add interest on capital xxx Office furniture xxx
xxx Less depreciation xxx xxx
Add net profit xxx xxx Sundry debtors xxx
B partners capital xxx Less provision xxx
Less drawings xxx Cash in hand xxx
xxx Closing stock xxx
Add interest on capital xxx
xxx
Add net profit xxx xxx
Bills payable xxx
Sundry creditors xxx
SPECIMEN OF BALANCE SHEET OF A PARTNERSHIP
Balance sheet as on 31:12:2011
xxx xxx
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BALANCE SHEET OF A NON GOVERNMENT ORGANIZATION
Not trading activity- dont earn profit but give service
Balance sheet of NGO prepared same as trading organization
Difference between total assets and liabilitiesnet assets
Depicts overall status of organization
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OBJECTIVES OF NGO ACCOUNTING
Money received and spent
Funds utilized properly
Provide financial report
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DIFFERENCE BETWEEN PROFIT ORGANIZATION AND NON- PROFIT
ORGANIZATION
Profit organization Non profit organization
Earn profit Provide service
Interest of owners- owners funds Interest of members- capital fund
Net resultnet profit / loss Net result- surplus or deficit
Final accounts consist trading a/c,
profit and loss a/c and balance sheet
Final accounts consist receipt and
payment A/c, income andexpenditure a/c and balance sheet
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Liabilities Amount Assets Amount
Capital funds xx Cash in hand xx
Add entrance fee xx xx Cash in bank xx
Unpaid salary xx Debtors xx
Building funds xx Investments xxTournament funds xx Books xx
Charity fund xx Sports material xx
Loan from others xx Furniture xx
Sundry creditors xx Building xx
Outstanding expenses xx Grounds xx
Income received in advance xx Outstanding income xx
Income and expenditure a/c xx Prepaid expenses xx
xx xx
SPECIMEN OF A NON GOVERNMENT ORGANIZATION BALANCE
SHEET
Balance sheet as on 31:12:2011
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Particular Amount Particular AmountFurniture and fixture 25,000 Net profit for the year 2007 38,000
Investments 40,000 Sundry debtor 28,000
Land and building 1,20,000 Cash in hand 2,100
Capital 3,00,000 Bills payable 12,1000
Plant and machinery 54,000 Motor vehicle 32,000
Bank over draft 9,000 Drawings 5,300
Goodwill 23,000 Loan to Mr.. Beckham 15,000
Bills receivable 17,000 Loan from Mr. Brandon 18,000
Trade creditors 21,700 Closing stock 16,000
Prepaid expenses 2,500
FROM THE FOLLOWING PARTICULAR PREPARE A BALANCE SHEET AS
ON 31ST DECEMBER 2007
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Liabilities Amount Assets Amount
Capital 3,00,000 Goodwill 23,000
Add net profit 38,000 Land and building 1,20,000
3,.38,000 Plant and machinery 54,000
Less drawings 5,300 3,32,700 Motor vehicles 32,000
Bills payable 12,100 Furniture and fixtures 25,000Bank overdraft 9,000 Investments 49,000
Loan from Mr. Brandon 18,000 Sundry debtors 28,000
Trade creditors 21,700 Prepaid expenses 2,500
Bills receivable 17,000
Loan from Mr. Beckham 15,000
Closing stock 16,000
Cash in hand 21,000
3,93,500 3,93,500
SOLUTION
Balance sheet as on 31:12:2011
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SOLVE THE PROBLEM
EXERCISE 1
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Particular Amount Particular Amount
To opening stock 86,5000 By sales 3,78,000
To purchases 1,78,000 By closing stock 1,56,000To freight 9,850 By goods loss by fire 17,000
To wages 36,150
Add outstanding wages 6,000 42,150
To gross profit c/d 2,84,500
5,51,000 5,51,000
TRADING ACCOUNT FOR THE YEAR 31-03-2007
PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDING 31-03-2007
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Particular Amount Particular Amount
To stationary 17,000 By gross profit b/d 2,84,500
To mobile phone bills 12,500
To insurance 16,800
Less prepaid insurance 12,600 4,200
To salaries 26,000
Add outstanding salary 17,075 43,075
To bad debts 2,500
Add F.B.D. 2,500
5,000
Add N.R.D.D. 4,000 9,000
To travelling expenses 8,500To value added tax 11,700
To interest on loan 10,125
To depreciation on furniture 12,000
To depreciation on motorcar 45,000
To loss by fire 6,000
PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDING 31-03-2007
BALANCE SHEET AS ON 31-03-2007
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Liabilities Amount Assets Amount
Narands capital 2,50,000 Debtors 42,500
Add net profit 63,240 3,13,240 Less F.B.D 2,500
40,000
Surands capital 1,50,000 Less N.R.D.D. 4,000 36,000
Add net profit 42,160 1,92,160 Furniture 80,000
Less depreciation 12,000 68,000
Creditors 99,500 Building 2,50,000Bank loan 90,000 Cash in hand 23,000
Add interest on loan 10,125 1,00,125 Motor car 1,80,000
Outstanding rent 11,500 Less depreciation 45,000 1,35,000
Outstanding wages 6,000 Closing stock 1,56,000
Outstanding salary 17,075 Prepaid insurance 12,600
Bills receivable 48,000
Insurance (loss by fire) 11,000
7,39,600 7,39,600
BALANCE SHEET AS ON 31 03 2007
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PROBLEM ON VERTICAL
BALANCE SHEET
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Liabilities Amount Assets amount
Share capital Fixed assets
Authorized, issued and subscribed capital 9,00,000 Machinery 7,90,000
Reserve and surplus Investments
General reserve 1,20,000 UTI bonds 2,05,000
Secured loan Current assets loans andadvance
Loan from bank 3,30,000 Current assets
Unsecured loan Trade debtors 3,00,000
Public deposit 1,20,000 Cash at bank 1,75,000
Current liabilities and provision Loan and advances
Current liabilities Bills receivable 70,000
Trade creditors 50,000 Miscellaneous expenditure NIL
Provision
Provision for tax 20,000
THE FOLLOWING IS THE BALANCE SHEET OF EVERGREEN LIMITED AS ON
31ST MARCH 2009. PREPARE VERTICAL BALANCE SHEET OF THE FOLLOWING
Balance sheet as on 31:12:2011
SOLUTION
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Particular Amount Amount
SOURCES OF FUNDS
A) Share capital
Authorized capital, issued capital , subscribed capital 9,00,000 9,00,000
B) Reserve and surplus
General reserve 1,20,000 1,20,000
Shareholders funds/ net profit (A+B) 10,20,000
C) Loan funds
Secured loan
Loan from bank 3,30,000
Unsecured loan
Public deposit 1,20,000 4,50,000
Total capital employed (A+B+C) 14,70,000
SOLUTIONBalance sheet as on 31:12:2011
Particular Amount amount
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Particular Amount amount
APPLICATION OF FINDS
A) Fixed assets
Machinery 7,90,000 7,90,000
B)Investment
UTI bond 2,05,000 2,05,000
C) Current assets loan and advances
Current assets
Trade debtors 3,00,000Cash at bank 1,75,500
Loan and advances
Bills receivable 70,000 5,45,000
Less current liabilities and provision
Current liabilities
Trade creditors 50,000
Provision
Provision for tax 20,000 70,000 4,75,000
D) miscellaneous expenditure ------
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BANK RECONCILIATION STATEMENT
Cash bookbusinessman, pass book- bank
Same transactions recorded- balance must match
At times balance dont agreeStatement showing items of difference betweencash and pass book
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CAUSES OF DIFFERENCE
Cheque issued but not presented for payment
Cheque deposited in bank but not collected
Interest allowed and credited by the bank
Collection of dividend by the bank
Dishonor of cheque
Interest charged or bank chargers debited in pass book
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NEED AND IMPORTANCE OF BANK RECONCILIATION
STATEMENT
Bring out errors committed
Show undue delay in clearance of cheque
Frauds by entrepreneur's or bank staff can be detected
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Amount AmountBalance as per cash book/ pass book xx
Cheque issued but not presented to bank for payment xx
Cheque drawn but not actually issued to parties xx
Cheque issued to parties but dishonored by bank xx
Wrong or excess credit in cash book xx
Cheque or bank directly paid in bank by others xx
Cheque deposited in the bank but not debited in cash book` xx
Cheque issued but not credited in cash book xx
Cheque debited in cash book but not deposited xx
Wrong or excess debit in cash book xx
Bank charges, interest on overdraft xx
Direct payment by bank xx
Bank balance as per cash book/ pass book xxTotal xx xx
FORMAT OF A BANK RECONCILIATION STATEMENT
Bank reconciliation statement as on .
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Cash book balance Rs. 1,500Cheque deposited but not collected by bank Rs. 500
Direct deposit made by customers Rs. 400
Insurance premium paid by bank Rs. 100Bank charges Rs. 600
Dividend collected by bank Rs. 300
RECTIFY THE CASH BOOK
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Amount Amount
Balance as per cash book 1,500
Cheque deposited but not collected by bank 500
Direct deposit made by customer 400
Insurance premium paid by bank 100
Bank charges 600
Dividend collected by bank 300
Balance as per pass book 2,200 2,200
SOLUTION
Bank reconciliation statement
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The cash book shows a bank balance of 7,800 on comprisingthe cash book with the pass book. The following
discrepancies were found
Cheque deposited in bank but not credited Rs. 3,000
Cheque issued but not yet presented for payment Rs.1,500
Insurance premium paid by bank Rs. 400
Bank charges Rs. 100
Direct deposit by customers Rs. 4000
Prepare bank reconciliation statement as on 31 march 2009
SOLVE THE FOLLOWING
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