Page 208 - DMGT104_FINANCIAL_ACCOUNTING

Financial Accounting

Notes Illustration 1: The Balance Sheets of Kavita Ltd. for the year ending 31st Dec. 2006 and 2007 are
as follows:

Liabilities 31 st Dec. 2006 31 st Dec. 2007 Assets 31 st Dec. 2006 31 st Dec. 2007
( ) ( ) ( ) ( )
Equity Share Capital 8,000 10,000 Land & Building 4,000 6,000
Capital Reserve 300 1,800 Plant & Machinery 2,000 3,000
10% Debentures 1,200 1,600 Investment 1,200 1,600
Creditors 500 600 Debtors 800 1,000
Stock 1,600 1,800
Cash 400 600
Total 10,000 14,000 Total 10,000 14,000

Draw a comparative Balance Sheet showing increase and decrease both in absolute figures and
in percentage and then interpret the changes.
Solution:
Comparative Balance Sheet of Kavita Ltd.
31 st Dec. 31 st Dec. Increase Increase or Decrease in
2006 2007 or %
( (000)) ( (000)) Decrease
( (000))
Assets: Fixed Assets: 2000 ´ 100 = 50
Land and Building 4,000 6,000 +2,000 4000
Plant & Machinery 2,000 3,000 +1,000 1000
×100 = 50
2000
Total Fixed Assets 6,000 9,000 3,000 3000
×100 = 50
6000
Investment 1,200 1,600 400 200
Current Assets : 600 ×100 = 33.33
Debtors 800 1,000 200 200
×100 = 25
800
Stock 1,600 1,800 200 200
×100 = 12.5
1600
Cash 400 600 200 200
×100 = 50
400
Total of Current Assets 2,800 3,400 600 æ 200 ö
ç è 2800 ×100 = 21.43
÷
ø
Total Assets 10,000 14,000 4,000 4000
×100 = 40
10000
Liabilities 8,000 10,000 2,000 2000
×100 = 25
Equity Share Capital 8000
Reserve and Surplus 300 1,800 1,500 1500
×100 = 500
300
10% Debentures (Secured Loan) 1,200 1,600 400 400
×100 = 33.33
1200
Contd...

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