2 BALANCE SHEET 2006 2007 2006 2007 Rs. Rs. Rs. Rs. Rs Rs Rs Rs.Share Capital Fixed AssetsEquity share capital ,00, ,50, Plant & Machinery ,20, ,00,000Preference share capital 2,00, ,00, Land & Buildings , ,50,000Reserves and SurplusGeneral Reserve , , InvestmentsSecurities Premium , , Investments In Shares , ,60,000Profit and Loss A/c , ,00, Currents AssetsSecured Loans Loans &Advances8% Debentures ,50, ,00, Cash at Bank ,30, ,70,000Unsecured Loans Stock in trade ,70, ,30,000Bank loan , , Sundry Debtors , ,000Current Liabilities & Bills Receivable , ,000Provisions IntangiblesSundry Creditors ,00, , Goodwill , ,000Bills Payable , , Misc. ExpensesProvision For Taxation , , Preliminary Expenses , ,0008,20, ,00, ,20, ,00,000
3 WHY IS SHARE CAPITAL A LIABILITY? B) WHY ASSETS ARE ALWAYS EQUAL TO LIABILITIES?
4 LIABILITIES SIDE: SOURCES OF FUNDS A. SHARE CAPITALIt represents the contribution made by the shareholders. There are two types of shares.Equity sharesPreference shares.Types of Preference sharesCumulative and Non-CumulativeRedeemable and IrredeemableParticipating and Non-participatingTerms associated with Share capitalAuthorized CapitalIssued CapitalSubscribed CapitalCalled up capitalPaid-up capitalReserve Capital ( normally in banking cos )
5 B. RESERVES and SURPLUSa) DIVIDEND EQULISATION RESERVE b) EXCHANGE EQULISATION RESERVE c) ASSETS REPLACEMENT RESERVE d) GENERAL RESERVE C. Secured Loans D. Unsecured Loans E. Current Liabilities and Provisions
6 ASSETS SIDE : APPLICATION OF FUNDS Fixed AssetsCurrents AssetsInvestmentsIntangible AssetsFictitious Assets
8 FUND FLOW STATEMENTFunds flow statement explains the various sources from which funds are raised and uses to which funds are put.It shows the change in assets and liabilities from the end of one period of time to the end of another period of time i.e. in between two Balance sheet dates.An analysis of the funds flow statement helps us in answering questions such asWhat is the amount of funds generated from operations?How were the fixed assets of an organization financed ?Whether the liquid position of the organization increased? Etc…
9 CASH FLOW STATEMENT (AS 3) The cash flow statement provides information about historical changes in cash and cash equivalents , classifying the cash flow from operating , investing and financing activities
10 BALANCE SHEET Particulars 2002 2003 Equity Share Capital 20000 25000 Plant4600045000Debentures1500012000Sundry Debtors90007000Sundry Creditors1600018000Stock5000Profit & Loss A/c1100014000Cash38000General Reserve3000040000B/ Receivable10000Total92000109000