Prepare a balance sheet of Black Swan Ltd., as at March 31, 2017 from the following information: General Reserve Rs. 3,000; 10% Debentures Rs. 3,000; Balance in Statement of Profit and Loss Rs. 1,200; Depreciation on fixed assets Rs. 700; Gross Block Rs. 9,000; Current Liabilities Rs. 2,500; Preliminary Expenses Rs. 300; 6% Preference Share Capital Rs. 5,000; Cash & Cash Equivalents Rs. 6,100.
Balance Sheet of Black Swan Ltd. as at March 31, 2017
| Particulars | Note No. | Amount (Rs.) |
|---|---|---|
| I. Equity and Liabilities | ||
| 1. Shareholders’ Funds | ||
| a) Share Capital | 1 | 5,000 |
| b) Reserves and Surplus | 2 | 4,200 |
| 2. Non-current Liabilities | ||
| a) Long-term borrowings | 3 | 3,000 |
| 3. Current Liabilities | 2,500 | |
| Total | 14,700 | |
| II. Assets | ||
| 1. Non-current Assets | ||
| a) Fixed Assets | 4 | 8,300 |
| b) Other Non-current Assets | 5 | 300 |
| 2. Current Assets | ||
| a) Cash and Cash Equivalents | 6,100 | |
| Total | 14,700 |
Notes to Accounts:
| Note No. | Particulars | Amount (Rs.) |
|---|---|---|
| 1 | Share Capital | |
| 6% Preference Share Capital | 5,000 | |
| 2 | Reserves and Surplus | |
| General Reserve | 3,000 | |
| Balance in Statement of Profit and Loss | 1,200 | |
| Total | 4,200 | |
| 3 | Long-term borrowings | |
| 10% Debentures | 3,000 | |
| 4 | Fixed Assets | |
| Gross Block | 9,000 | |
| Less: Depreciation on fixed assets | (700) | |
| Net Block (Tangible Assets) | 8,300 | |
| 5 | Other Non-current Assets | |
| Preliminary Expenses | 300 |
Explanation
The solution follows the prescribed Schedule III format visible in the provided context. 'Share Capital' and 'Reserves and Surplus' are grouped under Shareholders' Funds. '10% Debentures' are classified as Long-term borrowings under Non-current Liabilities. On the Assets side, 'Fixed Assets' are calculated by deducting depreciation from Gross Block (Net Block = 9,000 - 700). 'Preliminary Expenses' are shown under 'Other Non-current Assets' as seen in the context examples. 'Cash and Cash Equivalents' is a Current Asset. The Total Assets (14,700) matches the Total Equity and Liabilities (14,700).
Solution Steps
Step 1: Calculate Reserves and Surplus: General Reserve (Rs. 3,000) + Balance in Statement of Profit and Loss (Rs. 1,200) = Rs. 4,200.
Step 2: Calculate Net Fixed Assets: Gross Block (Rs. 9,000) - Depreciation on fixed assets (Rs. 700) = Rs. 8,300.
Step 3: Classify items: Share Capital (Shareholders' Funds), Debentures (Non-current Liabilities), Preliminary Expenses (Other Non-current Assets).
Step 4: Verify matching totals: Liabilities (5,000 + 4,200 + 3,000 + 2,500) = 14,700; Assets (8,300 + 300 + 6,100) = 14,700.