Page 346 - DCOM201_ACCOUNTING_FOR_COMPANIES_I

Unit 14: Preparation of Final Accounts

Statutory Contents of Assets Side of Balance Sheet Notes
1. Fixed Assets: Fixed assets are those assets, which are used for long-term in the business.
Different assets are shown separately at their original cost and addition to and deductions
for depreciation provided for. Fixed Assets include:
(a) Goodwill
(b) Land and Building

(c) Lease hold
(d) Railway sidings
(e) Plant & Machinery
(f) Furniture & Fixture

(g) Patents, Trade Marks and Designs
(h) Development of property
(i) Copyrights
(j) Live stock

(k) Vehicles
2. Investments: Investments are shown after fixed assets. It is necessary to disclose nature
and mode of its valuation of every investment. Market price or cost price, at which
investments are valued, must be disclosed. All investments must be shown separately
such as Govt., shares, debentures, etc.

3. Current Assets, loans and advances:
(a) Current assets are such assets which are likely to be converted into cash within one
year from one balance sheet. Such assets are. 1. Loose tools 2. Stock in trade 3. Work
in progress 4. Sundry debtors 5. Cash and Bank balance
(b) Loans and advances – it includes loans and advances against purchase of goods and
various expenses.
4. Miscellaneous Expenditure: Expenses not written off– 1. Preliminary Expenses 2. Discount
on issue of shares and debentures 3. Expenses including commission or brokerage on
underwriting 4. Interest paid out of capital 5. Other sums.
5. Profit and Loss Account: If there is any debit balance in profit and loss account, it will be
shown on the assets side of the balance sheet.
Form of Balance Sheet
(Horizontal Form)
Balance sheet of …………… as at …………
(Form of Balance Sheet as Per Schedule VI and Part I)

Figures Figures Figures Figures
for the for the for the for the
Liabilities Assets
previous Current previous current
year ( ) year ( ) year ( ) year ( )
1. Share Capital 1. Fixed Assets
Authorized (1) Goodwill
…………shares of (2) Land
…………each
(3) Buildings
Issued……………….share Contd...
(4) Leaseholds
of …………each
(5) Railway Sidings
Subscribed and paid
(6) Plant & Machinery
up……… shares of LOVELY PROFESSIONAL UNIVERSITY 339
(7) Furniture and Fittings
……………each
(8) Development of
Less: Called unpaid
Property
Add: Forfeited shares
(9) Patents, Trade Marks
and Designs
(10) Live Stock
(11) Vehicles etc.
2. Reserves and Surplus 2. Investments
(1) Capital Reserve (1) Investments in Govt.
(2) Capital Redemption or Trust securities
Reserve (2) Investments in
(3) Securities Premium Shares, Debentures
Account and Bonds
(4) Other Reserves (3) Immovable Properties
Less: Debit Balance of (4) Investment in the
P&L Account Capital of Partnership
Firms
(5) Surplus, i.e., Balance
of P&L Account
(6) Proposed additions to
Reserves
(7) Sinking Funds
3. Secured Loans 3. Current Assets, Loans
(1) Debentures and Advances
(2) Loans and Advances A. Current Assets
from Banks (1) Interest accrued on
(3) Loans and advances Investments
from Subsidiaries (2) Stores and spare parts
(4) Other Loans & (3) Loose Tools
Advances (4) Stock in Trade
(5) Work in Progress
(6) Sundry Debtors
(a) Debt outstanding
for a period
exceeding six
months.
(b) Other Debts
Less: Provision
(7) Cash and Bank
Balances
B. Loans & Advances:
(1) Acceptances & Loans
to Subsidiaries
(2) Exchange
(3) Advances recoverable
for value to be
received by Rates,
Taxes, Insurance etc.
(4) Balance with Customs,
Port Trust etc.
4. Unsecured Loans 4. Miscellaneous
(1) Fixed Deposit Expenditure
(2) Loans and advances (1) Preliminary
from subsidiaries Expenditure
(3) Short-term Loans & (2) Expenses including
Advances commission and
(a) From Banks brokerage of shares
(b) From Others and debentures
(3) Discount allowed on
issue of shares and
debentures
(4) Interest paid out of
capital during
construction (also
state the rate of
interest)
(5) Development
Expenditure not
adjusted.
(6) Other Items
(specifying nature)
5. Current Liabilities & 5. Profit and Loss A/c.
Provisions (1) Claims against the
A. Current Liabilities company not
(1) Acceptance acknowledged as
(2) Sundry Creditors debts.
(3) Advances payments (2) Uncalled liabilities
& unexpired on shares partly paid
discounts for the up
portion for which (3) Arrears of fixed
value has still to be cumulative
given dividends.
(4) Unclaimed Dividend (4) Estimated amount of
(5) Other liabilities but contracts remaining
not due on Loans to be executed on
(6) Interest Accrued capital account and
B. Provisions not provided for
(1) Provisions for (5) Other money for
taxation which company is
(2) Proposed Dividends, contingently liable.
(3) For Contingencies
(4) For Provident Fund
scheme
(5) Fire Insurance,
Pension and similar
staff benefits scheme
(6) Other Provisions [A
footnote to the
balance sheet may be
added to show
separately]