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Unit 7: Accounting for Banking Companies
Solution notes
Capital Adequacy Ratio = (Capital ÷ Risk with assets) × 100 = (89.96 ÷ 1467.075) × 100 = 6.132%
Working Note
1. Calculation of capital employed:
Tier I Tier II
Equity share capital 52.50
Statutory reserve 26.00
Capital reserve 2.20 1.26
Security premium 3.00
General reserve 5.00
88.70 1.26
2. Calculation of Risk weighted Assets
Particulars B.V Risk (%) Amount
Cash 5.8 0 0
Balance with RBI 4.0 0 0
Balance with other Banks 15.00 20 3.00
Deposits in other banks 20.00 22.5 4.00
Eq. Investment in subsidiaries 5.00 102.50 5.125
Other investment 78.00 102.50 79.95
Loan & Advance:
- by Government 15.00 0 0
- by Government of India 80.00 100% 0
- other 625 100 625.00
Premises 100 100 100.00
Furniture & Fixtures 75 100 100.00
Other Assets 200 100 200.00
Intangible Assets 10 100 10.00
AEOO 365 100 10.00
total 1467.075
Illustration 3
Check and maintain C.R.R. for schedule bank
trial Balance Dr. cr.
Saving deposits 15,000
Term deposits 40,000
Demand deposits – 4,000
R.B.I. current account – 6,000
Cash in hand 8,000
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