Balance Sheet of XYZ Ltd as on 31‐Mar‐2015 and 31‐Mar‐2016 31.03.15 31.03.16 31.03.15 31.03.16 Liabilities Rs Rs. Assets Rs. Rs. Share Capital 14,40,000 19,20,000 Fixed Assets 38,40,000 45,60,000 Capital Reserve --- 48,000 Less: Depreciation (11,04,000) (13,92,000) General Reserve 8,16,000 9,60,000 27,36,000 31,68,000 Profit & Loss Account 2,88,000 3,60,000
Reporting Cash Flows
Reporting of cash flows means a statement of cash flow which is a financial statement. A cash flow statement is prepared by gathering all the data regarding inflows and outflows of a company. The cash flow statement includes cash inflows and outflows from various activities such as operating, financing, and investment. Reporting this statement is important because it is the main financial statement of the company.
Balance Sheet
A balance sheet is an integral part of the set of financial statements of an organization that reports the assets, liabilities, equity (shareholding) capital, other short and long-term debts, along with other related items. A balance sheet is one of the most critical measures of the financial performance and position of the company, and as the name suggests, the statement must balance the assets against the liabilities and equity. The assets are what the company owns, and the liabilities represent what the company owes. Equity represents the amount invested in the business, either by the promoters of the company or by external shareholders. The total assets must match total liabilities plus equity.
Financial Statements
Financial statements are written records of an organization which provide a true and real picture of business activities. It shows the financial position and the operating performance of the company. It is prepared at the end of every financial cycle. It includes three main components that are balance sheet, income statement and cash flow statement.
Owner's Capital
Before we begin to understand what Owner’s capital is and what Equity financing is to an organization, it is important to understand some basic accounting terminologies. A double-entry bookkeeping system Normal account balances are those which are expected to have either a debit balance or a credit balance, depending on the nature of the account. An asset account will have a debit balance as normal balance because an asset is a debit account. Similarly, a liability account will have the normal balance as a credit balance because it is amount owed, representing a credit account. Equity is also said to have a credit balance as its normal balance. However, sometimes the normal balances may be reversed, often due to incorrect journal or posting entries or other accounting/ clerical errors.
| 31.03.15 | 31.03.16 | 31.03.15 | 31.03.16 | ||
| Liabilities | Rs | Rs. | Assets | Rs. | Rs. |
| Share Capital | 14,40,000 | 19,20,000 | Fixed Assets | 38,40,000 | 45,60,000 |
| Capital Reserve | --- | 48,000 | Less: |
(11,04,000) | (13,92,000) |
| General Reserve | 8,16,000 | 9,60,000 | 27,36,000 | 31,68,000 | |
| Profit & Loss Account | 2,88,000 | 3,60,000 | Investments | 4,80,000 | 3,84,000 |
| 9% Debenture | 9,60,000 | 6,72,000 | Cash | 4,000 | ___ |
| Sundry Creditors & Bills Payable | 5,76,000 | 6,24,000 | Sundry Debtors |
12,00,000 | 14,00,000 |
| Proposed Dividend | 1,44,000 | 1,72,800 | Stock | 1,40,000 | 1,84,000 |
| Provision for Tax | 4,32,000 | 4,08,000 | Preliminary Expenses | 96,000 | 48,000 |
| Unclaimed Dividend | ___ | 19,200 | |||
| 46,56,000 | 51,84,000 | 46,56,000 | 51,84,000 | ||
| Additional Information | |||||
| 1. During the year 2015 ‐ 2016, Fixed Assets with a book value of Rs 2,40,000 ( |
|||||
| 2. Provided Rs 4,20,000 as depreciation on Fixed Assets | |||||
| 3. Some investments are sold at a profit of Rs 48,000 and the Profit was credited to Capital Reserve | |||||
| 4. It was decided that stocks be valued at cost, whereas previously the practice was to value stock at cost less 10 percent. The stock was Rs 2,59,200 as on 31.03.2015. The stock as at 31.03.16 was correctly valued at Rs 3,60,000 | |||||
| 5. It was decided to write off Fixed Assets costing Rs 60,000 on which depreciation amounting to Rs 48,000 has been provided. | |||||
| 6. Debentures are redeemed at Rs 105 |
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