Class 12 Ts Grewal 2026 (Volume-3)

1. Financial Statements of a Company

  • February 19, 2026
  • Com 0
  1. What are the heads in the Equity and Liabilities part of the Balance Sheet as per Schedule III?

Ans. :-

  • Shareholders’ Funds;
  • Share Application Money Pending Allotment;
  • Non-current Liabilities;
  • Current Liabilities.

2. Under which major head will the following be show:

  • Share Capital and
  • Money Received Against Share Warrants?

Ans. :-

  • Shareholder’s Funds
  • Shareholder’s Funds

3. List any five items that are shown under Reserve and Surplus.

    Ans. :-

    Capital Reserve

    Capital Redemption Reserve

    Debentures Redemption Reserve

    Securities Premium Reserve and Surplus, i.e., Balance is Statement of Profit and Loss.

    4. Name the Sub-heads under the head ‘Current Liabilities’ in the Equity and Liabilities part of the Balance Sheet as per Schedule III, Part I of the companies Act, 2013.

    Ans. As per Schedule III, Part I of the Companies Act, 2013, the main sub-heads under Current Liabilities in the Equity and Liabilities section of the Balance Sheet are:

    1. Short-term borrowings
    2. Trade payables
    3. Other current liabilities
    4. Short-term provisions

    5. Under which sub-head will the following be classified or shown:

    1. Long-term Borrowings;
    2. Deferred Tax Liabilities (Net); and
    3. Long-term Provision?

    Ans. :- Non-current liabilities.

    6. Name the items that are shown under Long-term Borrowings.

      Ans. :- Bonds;

      Debentures;

      Long-term Loan from Bank;

      Long-term Loans from Others;

      Public Deposits.

      7. State giving reason whether Trade Receivables are classified as Current Assets or Non-current Assets in the Balance Sheet of a Company as per Schedule III of the Companies Act, 2013 in the following cases:

      Ans. :-

      1. Current Assets;
      2. Current Assets;
      3. Non-current Assets;
      4. Current Assets;
      5. Non-current Assets.

      8. State giving reason whether Trade Payables are classified as Current Liabilities or Non-current Liabilities in the Balance Sheet of a Company as per Schedule III of the Companies Act, 2013 in the following cases:

      Ans. :-

      1. Current Liabilities;
      2. Current Liabilities;
      3. Non-current Liabilities;
      4. Current Liabilities;
      5. Non-current Liabilities.

      9. State any two items that are included in the following major head under which liabilities of a company are shown:

      1. Reserves and Surplus;
      2. Long-term Borrowings;
      3. Short-term Borrowings;
      4. Other Current Liabilities.

      Ans.:-

      • Reserve and surplus: Capital Reserve; Capital Redemption Reserve;
      • Long-term Borrowings: Debentures; Term Loans from bank; Long-term Loans from Others; Public Deposits;
      • Short-term Borrowings: Bank Overdraft; Cash Credit from Bank;
      • Other Current Liabilities: Unpaid Dividend; Current Maturities of Long-term Debts; Interest Accrued and Due on borrowings.

      10. Classify the following items under Major heads and Sub-heads (if any) in the Balance Sheet of a company as per Schedule III of the Companies Act 2013:

      • Securities Deposits (More than 12 months);
      • Interest due on Calls-in-Arrears;
      • Balance in Forfeited Shares Account;
      • Capital Work-in-Progress;
      • Loan Repayable on Demand;
      • Cash in Hand.

      Ans.:-

      11. Under which major heads and sub-heads will the following items be placed in the Balance Sheet of the company as per Schedule III, Part I of the Companies Act, 2013?

      • Debentures with maturity period in current financial year;
      • Securities Premium;
      • Provident Fund.

      Ans.:-

      12. Under which heads the following items on the Assets part of the Balance sheet of a company will be shown:

      • Sundry Debtors;
      • Patents and Trademark;
      • Shares in Quoted Companies;
      • Advances recoverable in cash;
      • Prepaid Insurance; and
      • Work-in-Progress?

      Ans.:- Head (Sub-head, if any):

      • Current Assets (Trade Receivables);
      • Non-current Assets, Property, Plant and Equipment (fixed Assets) – Intangible Asset);
      • Non-current Asset (Non – current Investments);
      • Current Assets (Short-term Loans and Advances);
      • Current Assets (Other Current Assets);
      • Current Assets (Inventories).

      13. Classify the following items under major heads and sub-heads (if any) in the Balance Sheet of a company as per Schedule III, Part I of the Companies Act, 2013:

      • Calls in advance;
      • Mining rights;
      • Loose tools.
      • Accrued Income
      • Prepaid Insurance
      • Unpaid dividend
      • Capital Work-in-Progress
      • Patents
      • Capital Reserve
      • Current Maturities of Long-term Debt

      Ans.:-

      14. Under which of the major heads will the following items be shown in the Balance Sheet of a company as per Schedule III of the Company Act, 2013:

      • 10% Debentures;
      • Stock-in-Trade;
      • Cash at Bank;
      • Bills Receivables;
      • Goodwill;
      • Loose Tools;
      • Share Application Money Pending Allotment.

      Ans.:-

      15. Classify the following items under Major Heads and Sub-heads (if any) in the Balance Sheet of a company as per Schedule III, Part of the Company Act, 2013:

      • Accrued Income;
      • Capital Advance;
      • Capital work-in-Progress.

      Ans.:-

      16. Under which heads will the following items be shown in the Balance Sheet of a Company;

      • Bank Balance;
      • Investments (Long-term);
      • Outstanding Salary;
      • Subscribed and paid-up Capital
      • Bills Payable;
      • Unclaimed Dividends;
      • Shares Option Outstanding Account; and
      • General Reserve;
      • Uncalled Liability on Shares?

      Ans.:-

      17. Under which major heads and sub-heads will the following items be presented in the Balance Sheet of the company as per Schedule III, Part I of the Company Act, 2013?

      • Bank Overdraft
      • Subsidy Reserve
      • Capital Redemption Reserve
      • Publishing Titles
      • Copyrights and Patents
      • Debit balance in the Statement of Profit & Loss
      • Debenture Redemption Reserve
      • Income Received in Advance

      Ans.:-

      18. Under which heads following are shown in a company’s Balance Sheet;

      • Public Deposits;
      • Office Furniture;
      • Prepaid Rent;
      • Outstanding Salaries;
      • Computer Software;
      • Interest Accrued on Investment;
      • Trade Payable payables after 12 months from the date of Balance Sheet?

      Ans.:-

      • Long-term Borrowings under Non-current Liabilities;
      • Property, Plant & Equipment & Intangible Assets – Property, Plant & Equipment under Non-current Assets;
      • Other Current Assets under Current Assets;
      • Other Current Liabilities under Current Liabilities;
      • Property, Plant & Equipment & Intangible Assets – Intangible Assets under Non-current Assets;
      • Other Current Assets under Current Assets;
      • Other Long-term Liabilities under Non-current Liabilities.

      19. Classify the following items under major heads and sub-heads (if any) in the Balance sheet of the company as per Schedule III, Part I of the companies Act, 2013:

      • Loose tools
      • Provision for Tax
      • Copyrights
      • Capital Work-in-Progress
      • Stores and Spares
      • Public Deposits

      Ans.:-

      20. How are the following items shown while preparing Balance Sheet of a company;

      • Surplus, i.e., Balance in Statement of Profit & Loss (Dr.);
      • Interest accrued and due on Debentures;
      • Computer Software under development;
      • Interest accrued on Investment;
      • Arrears of dividends on Cumulative Preference Shares?

      Ans.:-

      21. Under which heads and sub-heads are the following items shown in the Balance Sheet of a Company as per Schedule III, Part I of the Companies Act, 2013?

      • Securities Premium
      • Interest accrued and due on secured loans
      • Cash and Bank balance
      • Interest accrued but not due
      • Building
      • Mining Rights
      • Sundry Debtors
      • Sundry Creditors
      • Premium on Redemption of Debentures
      • Mastheads and Publishing Title

      Ans.:-

      22. Prepare Balance Sheet of Recovery Ltd. As per Schedule III of the companies Act, 2013:

      10% Debentures of Rs.100 each                                 Rs.1,90,000

      Stock-in-Trade (Inventories)                                       Rs.40,000

      Goodwill                                                                          Rs.20,000

      Provision for Tax                                                           Rs.6,000

      Totaling of Balance Sheet is not required.

      Solution –

      Equities and liabilities

       Long-term Borrowings (10% Debentures):            Rs.1,90,000

      Short-term provisions (Provision for Tax):               Rs.6,000

      Total

      Assets

      Property, Plant & Equipment & Intangible Assets

      Intangible Assets (Goodwill):                                    Rs.20,000

      Current Assets (Inventories):                                    Rs.40,000

      23. From the following information extracted from the books of Howrach Ltd., prepare Balance Sheet of the company as at 31st March, 2025 as per Schedule III of the Companies Act, 2013:

      Ans.:- Balance sheet of Z Ltd. As on 31st March, 2025 as per Schedule VI Part I of the Companies Act. 2013

      24. Prepare Balance Sheet of VT Ltd. As at 31st March, 2025, from the following information as per Schedule III, Part I of the Companies Act, 2013:

      Ans.:-

      Balance Sheet of VT Ltd. As t 31st March,……… as per Schedule III part I of the companies Act, 2013;

      25. Prepare Balance Sheet of HP Ltd., as at 31st March, 2025 from the following information:

      Ans.:-

      Revenue from Operations and Other Incomes

      26. Under which head following revenue items of a non-financial company will be shown:

        • Sales;
        • Revenue from Services Rendered;
        • Sale of Scrap;
        • Interest Earned on Loans; and
        • Gain (Profit) on Sale of Investment?

        Ans.:-

        Revenue from Operation:

        • Sales;
        • Revenue from Services Rendered;
        • Sale of Scrap;

        Other Income:

        • Interest Earned on Loans;
        • Gain (Profit) on Sale of Investments.

        Cost of Materials Consumed

        27. Where will purchase of Raw Materials be disclosed in Financial Statement of Company?

          Ans. Purchase of raw materials → Statement of Profit & Loss → Under Expenses (Cost of Materials Consumed).

          28. Calculate Cost of Materials Consumed from the following:

          Opening Inventory of Materials Rs.5,00,000; Purchase of Materials Rs.25,00,000; and Closing Inventory of Materials Rs.4,00,000.

          Ans.:-

          Cost of Material Consumed = Opening Inventory of Material + Purchases of Materials – Closing Inventory of Materials

                                                               = 5,00,000 + 25,00,000 – 4,00,000

                                                               = 26,00,000

          Cost of Materials Consumed is Rs.26,00,000.

          29. Calculate Cost of Materials Consumed from the following:

          Opening Inventory Materials Rs.3,50,000; Finished Goods Rs.75,000; Stock-in-Trade Rs.2,00,000; Closing Inventory Materials Rs.3,25,000; Finished Goods Rs.85,000; Stock-in-Trade Rs.1,50,000; Purchases during the year: Raw Material Rs.17,50,000; Stock-in-Trade Rs.9,00,000.

          Ans.:-

          Cost of Material Consumed = Opening Inventory of Materials + Purchases of Materials – Closing Inventory Materials

                                                               = 3,50,000 + 17,50,000 – 3,25,000

          Cost of Materials Consumed    = Rs.17,75,000

          Changes in Inventories of Finished Goods, Work-in-Progress and Stock-in-Trade

          30. Give two examples of Inventory except Raw Materials, Work-in-Progress, Finished Goods and Stock-in-Trade.

          Ans. Two examples of inventory (other than raw materials, work-in-progress, finished goods, and stock-in-trade) are:

          1. Stores and Spares
          2. Loose Tools

          Explanation:

          • Stores and Spares: Items used in production or maintenance (e.g., lubricants(oil,grease), small machine parts).
          • Loose Tools: Small tools used in operations that are not treated as fixed assets (e.g., hammers, screwdrivers).

          31. From the following information of Hospitality Ltd., for the year ended 31st March, 2025, calculate amount the will be shown in the Note of Accounts on Changes in Inventories of Finished Goods. Work-in-Progress and Stock-in-Trade:

          Ans.:-

          Rs.25,000 will be shown in the Statement of Profit and Loss against the change in Inventories of Finished Goods, Work-in-Progress and Stock-in-Trade.

          Depreciation and Amortization Expenses

          32. From the following information  of Best Marketing Ltd., for the year ended 31st March, 2025, prepare Note to Accounts on Depreciation and Amortization Expenses:

            Depreciation on: building Rs.15,500; Plant and Machinery Rs.25,000; Computers Rs.60,000; Goodwill written off Rs.7,500; Patents written off Rs.12,500.

            Ans.:- Notes to Accounts

            Employees Benefit Expenses

            33. From the following information compute the amount to be shown in Note to Accounts on Employees Benefit Expenses: Wages Rs.5,40,000; Salaries Rs.7,20,000; Bonus Rs.1,05,000; Staff Welfare Expenses Rs.60,000 and Business Promotion Expenses Rs.50,000.

              Ans.:- Notes to Accounts

              34. From the following information prepare Note to Accounts on Employees Benefit expenses:

                Wages Rs.2,70,000; Salaries Rs.3,60,000; Staff Welfare Expenses Rs.60,000; Printing and Stationery Expenses Rs.20,000 and Building Promotion Expenses Rs.50,000.

                Ans.:- Notes to Accounts

                Finance Cost

                35. Prepare Notes to Accounts of Finance Cost of Cosmo Ltd. For the year ended 31st March, 2026:

                  • Interest paid on 9% Debenture Rs.1,50,000.
                  • Discount on issue of Debenture Rs.36,000;
                  • Dividend paid Rs.1,80,000;
                  • Bank Charges Rs.6,000;
                  • Interest Received on fixed Deposits Rs.70,000;
                  • Interest on Bank overdraft Rs.28,000.

                  Ans.

                  Notes to Accounts – Finance Cost (Cosmo Ltd.)

                  For the year ended 31st March, 2026

                  36. Where will you disclosed the amount of loss on issue of Debenture written off in statement of profit & loss?

                    Ans. 

                    • Loss on issue of debentures is treated as a borrowing cost, similar to interest.
                    • Hence, when written off, it is shown along with other finance expenses like interest on loans, debentures, etc.

                    Final Answer:

                    Loss on issue of debentures written off → Shown under “Finance Costs” in the Statement of Profit and Loss.

                    37. From the following information calculation total income, other expense, total expenses, change in inventory, profit before tax and profit after tax for the year ended 31st March, 2026 as per schedule III, Part II of the companies Act, 2013:

                    Ans.

                    Let’s compute step by step as per Schedule III, Part II of the Companies Act, 2013.

                    1. Change in Inventory

                    Change in Inventory = Opening Stock – Closing Stock

                    = ₹1,75,000 – ₹1,00,000
                    = ₹75,000 (Increase in inventory / expense)

                    2. Total Income

                    Total Income = Revenue from Operations + Other Income

                    = ₹19,00,000 + ₹1,00,000
                    = ₹20,00,000

                    3. Other Expenses

                    Other Expenses include:

                    • Administrative Expenses = ₹50,000
                    • Selling & Distribution Expenses = ₹87,500
                    • Finance Cost = ₹75,000
                    • Loss on Sale of Machinery = ₹62,500

                    Total Other Expenses =
                    = 50,000 + 87,500 + 75,000 + 62,500
                    = ₹2,75,000

                    4. Total Expenses

                    Total Expenses =
                    Cost of Material Consumed + Change in Inventory + Employee Benefit Expenses + Other Expenses

                    = 7,50,000 + 75,000 + 3,00,000 + 2,75,000
                    = ₹13,00,000

                    5. Profit Before Tax (PBT)

                    PBT = Total Income – Total Expenses

                    = ₹20,00,000 – ₹13,00,000
                    = ₹7,00,000

                    6. Profit After Tax (PAT)

                    PAT = PBT – Tax

                    = ₹7,00,000 – ₹1,50,000
                    = ₹5,50,000

                    Final Answers:

                    • Total Income: ₹20,00,000
                    • Other Expenses: ₹2,75,000
                    • Total Expenses: ₹13,00,000
                    • Change in Inventory: ₹75,000
                    • Profit Before Tax: ₹7,00,000
                    • Profit After Tax: ₹5,50,000

                    2. Accounting for debenture
                    2. Financial Statement Analysis