BANKING COMPANY FINAL ACCOUNTS

Transcription

1 BANKING COMPANY FINAL ACCOUNTS Q.1. From the following information, prepare the profit and loss account of Trinity Bank Ltd, for the year ended 31 st March 03 Particulars Rs. Particulars Rs. Interest on Investments Interest on Balance with RBI Interest on Loans Interest on Fixed deposits Rebate on Bills discounted (As on ) Commission Establishment Charges Discount on Bills discounted Interest on Cash Credit Dividend on Shares Income from Joint Venture 3,00,000 25,90,000 27,,000 4,90,000 82,000 5,40,000 14, 22,30,000 (1) Bad debts to be written off amounted to Rs. 4,00,000. (2) Provision for taxation to be made at 55%. (3) Rebate on Bills discounted ( ) Rs.. (4) Provide for doubtful debts Rs. Interest on Current Accounts Rent and Rates Interest on Overdraft Auditor s Fees Interest on Savings Bank Deposits Sundry Charges P & L Account (as on1-4-02) Interest on Borrowings 4,,000 1,80,000 15,40,000 30,000 12,000 6,80,000 14,000 29,000 17,000 Q.2. From the following details prepare the profit and loss account of Modern Bank Ltd for the year ended 31 st March 03 in the prescribed form: Interest paid on deposits, borrowings etc. 79,26,660 Interest and discount 1,83,74,725 Rental received 78,000 Net Profit on sale of Investment 2,27,000 Salaries, Allowances, and Provident Fund 97,79,925 Commission, Brokerage and Exchange 4 Law Charges 72,000 Rates and Taxes 46,300 3,26,070 Audit Fees 36,000 2,92,000 Depreciation on Bank s Property 8,,000 Miscellaneous receipts, sale of forms etc. 40,006 Miscellaneous Expenditure 1,65,406 Repairs to Property 32,400 Telephones and Stamps 4,83,0 Advertisement 2,76,000 Insurance and Lighting 3,45,000 Bad debts written off 72,700 Unexpired discount (1-4-02) 5,70,000 Provision for Bad debts (1-4-02) 16,10,000 Profit and Loss Account (1-4-02) Provision for Taxation (1-4-02) 24,00,000 During the year, income tax proceeding of the previous years were concluded and the liability on this account worked out to Rs. 22,40,000. 1

2 The Bank has make an evaluation at the end of the year of the recoverability of its advances and finds itself in the following position: (1) Unsecured advances to the extents of Rs. would be fully irrecoverable. (2) Unsecured loans to the extent of Rs. 40 lakhs would be doubtful of recovery to the extent of 40%: and (3) Cash credit accounts to the extent of Rs. 25 lakhs have been left without the margin due to fall in the value of securities and accounts to the extent of 10% are likely to be bad. It is the bank s policy to provide fully against the contingency of bad debts. Provision for taxation to remain at 55% of the current profits. Unexpired discount and interest on bills discounted on 31 st March 03, was Rs. 7,25,000. Q.3. After writing up the Profit and Loss Account, the General Ledger Balances of S.S. Bank Ltd. as on 31 st March, 1998 were as follows: Particulars Rs. Particulars Rs. Share Capital Bills for Collection Machinery in satisfaction of Claim Cash with R.B.I Cash with S.B.I Equity Shares of ACC Ltd. 4% Govt. of India Loan, of face value Rs.3,00,00,000 Bengal Govt. Loan Bonds, 03 of the face Value of Rs.7 Punjab Govt. Loan Bonds, 10 of the face value Rs.38,00,000 Interest Accrued on Investments Profit for the year Reserve fund as on Dividend Recoverable 59,75,000 78,26,181 1,05,30,783 45,600 1,30,25,300,11,837 3,81,700 2,40,90,000 70,30,400 39,56, 1,80,7 11,30,240 57,75,000 12,000 Unpaid Dividend Debentures in ACC Ltd. Borrowings from other Banks Fixed Deposit Saving Bank Deposits Current Deposits Provision for Taxation Provision for Doubtful Debt Balance with other Bank Loans, Cash Credits, & O/D Staff Provident Fund Sundry Creditors Unexpired Discounts Bills Discounted & Purchased Building 30,700 90, ,00,60,5 2,60,97,616 3,82,90,782 10,70,640 3,96,70,682 4,77,679 9,60,785 25,607,410 57,38,130 11,70,577 1,30,6 Profit and Loss Account credit balance brought forward from the previous year was Rs.12,60,780 out of which appropriations made were Rs.3,58,000 for dividend and Rs.6,12,000 for taxes paid. The following further information is relevant: (1) The Authorised Share Capital of the Bank Was Rs.1,00,00,000 divided into shares of Rs. each, out of which 75,000 shares were issued and subscribed with Rs.80 per share called up. (2) During the year additions of Rs.1,,077 were made to Building and Rs.29,6 to furniture, while Rs.7,600 realised on sale of a part of furniture (Book Value Rs.7,600) Depreciation on to 31 st March 1998 was Rs.30,600 and that on Building was Rs.1,40,0. Prepare the Balance Sheet of the Bank as on 31 st March,

3 Q.4. Following are some of the balances as on 31 st March 1998 of Vaibhav Bank Ltd. Interest on Advances Comm., Exchange & Brokerage Cash Balance Balance with other Banks Profit on Sale of Investments Other Revenue Receipts Share Capital ,000 Statutory Reserve Profit and loss Account Bills Purchased and discounted Cash, Credit, Overdrafts and Demand Loans Term Loans Fixed Deposits Savings Deposits % Investments in Govt. Current Deposits Securities (Purchased at 60% of Face Value) Other 25% (Purchased at Par) Borrowing from Other Banks Borrowing from RBI Premises (Net) Interest (including paid 45) Salary (Net) Repairs Following Additional Information is also furnished: (i) Advances have been classified as under with given details: (Rs. In 00) Classification of Assets Cash Credits Term Loans Standard Assets Sub Standard Assets Doubtful: Up to One Year One to Three Years More than Three Years Loss Assets 1, (ii) Standard and Substandard assets in bills portfolio are in the ratio of 9:1 (iii) Doubtful assets are secured up to %. (iv) No Provisions has been made so far against these assets. (v) Bills for collection Rs.235. (in thousands) (vi) 40% of total interest on investment has accrued. Prepare final accounts of Vaibhav Bank Limited ,425 1, , Q.5. From the following information prepare a Balance Sheet of Continental Bank Ltd. as on 31 st March 00 giving the relevant schedules: (Rs. In lakhs) Debit Balance Rs. Credit Balances Rs. Current Accounts Cash Credits Cash with other Banks Money at Call Gold Government Securities Premises ,80,000 Shares of Rs.10 each Statutory Reserve Net Profit before Appropriation Profit and Loss Account Fixed Deposit Saving Deposit Current A/c Borrowings from other Banks Term Loans , ,

4 Additional Information: Bills for Collections 18,10,000 Advances and endorsements 14,12,000 Claims against the bank not acknowledged as debt 55,000 Depreciation Charges: Premises 1,10,000 78,000 % of the Term Loans are secured by Government Guarantees. 10% of Cash Credits is unsecured. Also calculate the Cash Reserves (C.R.R) required and Statutory Liquid Reserve (S.L.R) required, given that Cash Reserve required is 3% of demand and time liabilities & Liquid Reserves required is 30% of demand and time liabilities. Q.6. The following figures are taken from the books of B.U. Bank Ltd. You are required to prepare the Balance Sheet as at 31 st March, 02 and Profit and Loss Account for the year ended as on that date: Current Accounts Saving Bank Account Fixed and Time Deposits Sundry Creditors Bills for Collection Acceptances and Endorsements on behalf of 1,60,00,000 60,00,000 19,00,000 16,00,000 2,80,000 Interest Accrued and Paid Salaries and Allowances Salary to General Manager Directors Fees Rent and Rates General Expenses Stationery and Printing Audit Fees 4,00,000 1,02,000 48,000 10,000 40,000 6,000 10,000 4,000 Customers 4,00,000 Money at Call and Short 6,00,000 Borrowings from bank 14,00,000 Notice 60,00,000 Unclaimed Dividend Dividend for 00 Investment at Cost Premises (after depreciation 24,00,000 Profit & Loss A/c (Cr) on 4,,000 up to March 01 1,, Reserve Fund Share Capital ( shares of Rs. each, Rs.10 paid Up) Interest and discount received 7,00,000 1 Rs.) Cash with other Banks Bills Discounted & Purchased Loans, O/D and Cash Credit 30,00,000 26,00, ,40,00,000 Rebate on Bills Discounted for unexpired term amounted to Rs.10,000. Create Provision for Taxation Rs. and for doubtful Debts Rs.. Allow 5% depreciation on premises on the original cost. Q.7. From the following Trail Balance of the Excellent Bank Ltd. prepare the Balance Sheet and Profit and Loss Account, making all necessary provisions. Trail Balance on 31 st March 03 Particulars Current Deposits Saving Bank Deposits Fixed and Time Deposits Sundry Creditors Accounts Debts due to banks, secured by investments Rebate on Bills Discounted Branch Adjustment (Cr) Reserve Fund Dividend Equalisation Fund Capital: shares of Rs. each Rs. per share paid 4 Rs. 4,5 1,45,,000 3,71,80,000 4,55,000 1,2 15,000 45,55,000 1,00,00, ,00,00,000

5 Interest and Discount Received Exchange and Commission (Cr.) General charges recovered Profit and Loss Account, Balance on Cash in hand Cash at Bank Bills for collection Liability of Customer s acceptances Investment in Government Securities Investment in shares Interest accrued on Investment Loans, Fixtures and Equipment Depreciation Interest Paid Exchange and Commission paid Salaries Stationery and Advertisement Miscellaneous Expenses Land and Building Bills Purchased and Discounted Money at Call Property acquired in satisfaction of claim. 58,00,000 17,00,000 55,000 8,52,000 4,37,0 68,69,0 2,2 1,11,68,000 4,5 47,00,000 8,75,000 4,4 1 24,00,000 4,00,000 3,00,000 30,00,000 3,3 1,000 (1) Current accounts include Rs. 8 debit balance, being overdrafts. One of the accounts of Rs. 95,000 is doubtful. (2) During the year property acquired in 00 in satisfaction of a defaulted debt of Rs. 25,000 was sold for Rs. 18,000. The amount of Rs. 18,000 was credited to the account, no further adjustment having been made yet. (3) Provision for taxation. (4) Transfer to Dividend Equalisation Fund Rs. 3,00,000 (5) Proposed 10%. 5