Page 152 - DCOM205_ACCOUNTING_FOR_COMPANIES_II

Unit 7: Accounting for Banking Companies

Solution notes
Demand & time liabilities – calculation

Deposits (Net) 1,50,000
+ Debit Deposits 10,000
Demand & time liabilities 1,60,000
1. Cash Reserve Ratio = 16,000-6000 = 10,000 be maintained additionally
2. Statutory Liquidity Ratio
Liquidity required = 25% of 1,60,000 40,000
(-) Liquidity available:

Cash in hand 10,000
Gold 5,000
Money at call & short notice 5,000
Balance with other banks 15,000 35,000
Deficiency (in liquidity) 5,000
Shortage of SLR
Illustration 5

Calculate capital for capital adequacy ratio.
particulars `
Share Capital 10,00,000
Statutory Reserve 2,00,000
Capital reserve (40%realise in cash) 5,00,000
Revaluation resave 40,00,000
Solution
particulars tier i tier ii
Share Capital 10,00,000 -

Statutory reserve 2,00,000 -
Capital Resave (40% cash) 2,00,000 -
(60% 5,00,000 x 45%) - 1,35,000
Revaluating Reserve (40,00,000 x 45%) - 18,00,000
total 14,00,000 19,35,000
Capital employed = Capital Tier I + Tier II
= 14,00,000 + 14,00,000

= 28,00,000

Task Discuss the rules for accounting equations.

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