PRACTICAL PROBLEMS:

1. From the following balances extracted from the books of Tushar Bank Ltd. Akola,
prepare the profit and loss account for the year ended 31st March 2017 and the Balance
sheet as on that date.
PARTICULARS RS.
Current accounts 1,60,00,000
Savings accounts 60,00,000
Fixed and time deposits 19,00,000
Acceptances 4,00,000
Unclaimed dividend 60,000
Dividend 2015-16 1,00,000
Profit and loss account (credit) on 1-4-17 4,20,000
Reserve Fund 7,00,000
Share Capital: 20,000 shares of Rs.50 each 10,00,000
Interest and discount received 15,00,000
Interest paid 4,00,000
Borrowing from other banks 14,00,000
Money at call 6,00,000
Investments (Market value Rs,62,00,000) 60,00,000
Premises (After depreciation upto 31-3-16 Rs.2,00,000) 24,00,000
Sundry creditors 60,000
Bills payable 16,00,000
Bills for collection 2,80,000
Salaries 1,60,000
Rent and taxes 40,000
Audit fee 4,000
Printing 10,000
General expenses 6,000
Cash in hand 1,20,000
Cash with R.B.I 30,00,000
Cash with other banks 26,00,000
Bills discounted and purchased 12,00,000
Loans, overdrafts and cash credits 1,40,00,000
ADJUSTMENTS:
1) Authorized share capital is Rs.20 lacs divided into 40,000 shares of Rs.50 each.
2) Rebate on bills discounted amounted to Rs.10,000.
3) Create a provision for taxation Rs.2,00,000.
4) Provision for bad and doubtful debts is required to be made at Rs.60,000.
5) Provide 5% depreciation on the original amount of premises.
2. From the following balances of Mahindra Bank Ltd. as on 31st March 2017, prepare
profit and loss account for the year ended 31st March 17 and Balance Sheet as on that
date.
PARTICULARS RS.
Equity share capital of Rs.100 each, Rs.50 paid up (Authorized and 20,00,000
Issued 40,000 shares)
Profit and Loss account (Cr. On 1-4-2016) 8,00,000
Current deposit a/c. 68,20,000
Fixed deposit a/c. 78,00,000
Savings bank a/c. 51,30,000
Directors fees 90,000
Audit fees 20,000
Furniture (Cost Rs.20 lacs) 17,40,000
Interest and discount received 42,00,000
Commission and exchange 20,00,000
Reserve Fund 7,00,000
Printing and stationery 80,000
Salary (incl Managers Rs.4 lacs) 14,00,000
Building (Cost Rs.60 lacs) 45,00,000
Cash-in-hand 3,20,000
Cash with RBI 70,00,000
Cash with other bank 65,00,000
Law charges 30,000
Investments at cost 24,00,000
Loans, cash credit and overdraft 60,00,000
Bills discounted and purchased 28,00,000
Interest paid 30,00,000
Borrowing from Laxmi Bank Ltd. 40,00,000
Branch adjustment a/c.(Cr.) 26,00,000
Rent and Taxes 1,70,000
ADDITIONAL INFORMATION:
1) The bank has accepted on behalf of the customers bills worth Rs.30 lacs against the
securities or Rs. 38 lacs lodged with the bank
2) Rebate on bills discounted to Rs.1,10,000.
3) Provide depreciation on building by 10% and on furniture by 5% on cost.
4) Provide Rs.30,000 for bad and doubtful debts
3. From the following balances extracted from the books of Karodpati Bank Ltd., prepare the profit and
loss account for the year ended 31st March 2017, and the Balance sheet as on that date.
Particulars Rs.
Salaries and allowances (including remuneration to General Manager Rs. 9 lacs and 25,00,000
Directors Fees Rs.1 lacs)
Sundry expenses 1,50,000
Interest paid on deposits 21,25,000
Commission, exchange (credit) 17,00,000
Interest and discount received 48,00,000
Statutory reserve fund 20,00,000
Deposits: Fixed 87,50,000
Savings 60,00,000
Current 90,00,000
Loans, cash credits and overdrafts 2,30,00,000
Bills discounted and purchased 15,00,000
Investment fluctuation fund 5,00,000
Cash in hand 17,50,000
Cash with RBI 25,00,000
Cash with Vijay Bank Ltd. 2,50,000
4% government securities 60,00,000
Silver 5,00,000
Gold 21,00,000
Bills for collection 10,00,000
Interest accrued on investments 3,00,000
Acceptances, endorsements and other obligations 20,00,000
Profit and loss account (credit balance on 1-4-16) 30,00,000
Shares on Telco Co. Ltd. 10,00,000
Interim dividend paid 3,00,000
Drafts payable 8,00,000
Share capital (authorized and issued) 2,00,000 shares of Rs.100 each, Rs.50 paid 10,00,000
Rent and taxes paid 2,00,000
Premises 25,00,000
Furniture and fixtures 7,50,000
Provident fund 8,00,000
Rebate on bills discounted 75,000
Unclaimed dividend 1,00,000
Adjustments:
a) Provide Rs.4 lacs for taxation and Rs. 2.5 lacs for bad and doubtful debts.
b) Rebate on bills discounted is over calculated by Rs.25,000.
c) An interim dividend declared was at 4% actual.
d) The market value of 4% government securities on 31-3-17 was Rs.58,25,000 and was to be shown
at this figure in Balance sheet.
e) Current accounts include Rs.4 lacs debits balance being overdraft.
4. The following is the trial balance of Lalu Ltd. as on 31st March 2017.
Particulars Rs. Particulars Rs.
Loans, cash credits and 28,50,000 Share Capital: 50,000 50,00,000
overdrafts equity shares of Rs.100
each fully paid
Premises 5,00,000 Reserve Fund 25,00,000
Indian Government securities 41,70,000 Current deposit 10,00,000
Salaries 2,80,000 Fixed Deposit 12,50,000
General expenses 2,74,000 Savings bank deposit 5,00,000
Rent, rates and taxes 23,000 Profit and loss a/c. (1-4- 1,60,000
16)
Directors fees 18,000 Interest and discount 12,80,000
Stock of stationery 85,000 Recurring deposits 2,00,000
Bills purchases and discounted 4,60,000
Shares 5,00,000
Cash in hand and with Reserve 19,30,000
Bank
Money at call and short notice 8,00,000
1,18,90,000 1,18,90,000
The following information should also be considered:
a) Provision for bad and doubtful debts is required, amounting to Rs.50,000.
b) Interest accrued on investments was Rs.80,000.
c) Unexpired discounts amounts Rs.3,800.
d) Endorsement made on behalf of customers totaled Rs.11,50,000.
e) Authorised capital was 80,000 equity shares of Rs.100 each.
f) Rs.1,00,000 were added to the premises during the year. Depreciation at 5%
on the opening balance is required.
g) Market value of Indian government securities was Rs.39,00,000.
Prepare profit and loss account for the year ended 31st March 2017 and
Balance sheet as on that date in the prescribed form.