Page 267 - ISCDEBK-12

10.18 Double Entry Book Keeping (Section A)—ISC XII

Advanced Level Questions

Illustration 7.
Seaways Ltd. has an authorised capital of ` 1,20,000 divided into 2,000; 6% Preference Shares of
` 10 each and 10,000 Equity Shares of ` 10 each. The company commenced trading on 1st April, 2019.
Following balances were extracted from the books on 31st March, 2020:
Particulars `
Preference Share Capital (Fully paid) ................................................................................................................................................ 20,000
Equity Share Capital (Fully called) ..................................................................................................................................................... 80,000
Calls-in-Arrears ......................................................................................................................................................................................... 2,000
Profit for the year ended 31st March, 2020 .................................................................................................................................... 13,570
Premises (At cost) .................................................................................................................................................................................... 68,000
Machinery (At cost) ................................................................................................................................................................................. 30,000
Fixtures and Fittings (At cost) ............................................................................................................................................................. 6,000
Provision for Depreciation:
Machinery .................................................................................................................................................................................................. 6,000
Fixtures and Fittings ............................................................................................................................................................................... 600
Provision for Doubtful Debts .............................................................................................................................................................. 300
Stock............................................................................................................................................................................................................. 7,000
Debtors ....................................................................................................................................................................................................... 6,300
Bank .............................................................................................................................................................................................................. 2,000
Cash .............................................................................................................................................................................................................. 70
Trade Creditors ......................................................................................................................................................................................... 900
The Directors decided to transfer ` 3,000 to reserve and to recommend a dividend of 10% on the Equity Shares.
Prepare Balance Sheet as at that date.
Solution: Seaways Ltd.
BALANCE SHEET as at 31st March, 2020
Particulars Note No. `

I. EQUITY AND LIABILITIES
1. Shareholders’ Funds
(a) Share Capital 1 98,000
(b) Reserves and Surplus 2 13,570
2. Current Liabilities
(a) Trade Payables 3 900
(b) Short-term Provisions 4 300
Total 1,12,770
II. ASSETS
1. Non-Current Assets
Fixed Assets:
Tangible Assets 5 97,400
2. Current Assets
(a) Inventories 6 7,000
(b) Trade Receivables 7 6,300
(c) Cash and Bank Balances 8 2,070
Total 1,12,770