Dr.S.S.Jadhav Head, Dept of Commerce mrs.k.s.k. college beed

Profit and Loss Account COMPANY FINAL ACCOUNT • Accounting is an art, it is an art of recording transaction and reporting results. Final account are for results. • Final accounts are prepared to show business profit over a period of time and business position at a point of time. • Final Account supply a wealth of information incomes, expenses, profits, assets, liabilities, reserves, almost everything about the business. • Final account explain the performance and the position of a company far better than a whole library of books. They are such a wonderful statements. • Preparation of final accounts is compulsory for a company. The final accounts of company consist of – 1. Profit and Loss Account 2. Profit and Loss Appropriation Account 3. Balance Sheet. Profit and Loss Account Profit and Loss account shows the result of business operations during a particular period of time. The profit and Loss account itself is divided in to two parts- the first part for calculating gross profit and second part for calculating net profit. It is prepared at the end of an accounting period and shows profit or loss made during that period. The Specimen account given below

……….…..Co.Ltd. Profit and Loss A/c For the year ended …………. Dr. Cr. Particulars L/F Rs Rs. To Opening Stock To Purchases To wages To fuels To coal and coke To carriage inward To fright To factory exp To Gross Profit c/d ---- …… ……........ By Sales By Closing Stock ……..... …… …… ------------- -------------

……….…..Co.Ltd. Profit and Loss A/c For the year ended …………. Dr. Cr. Particulars L/F Rs Particulars4 Rs. To salaries To indirect wages To Rent and rates To Insurance To Stationery & Printing To Postage & Telegrams To Directors fees To Advertisement To discount allowed To commission paid To carriage outwards To provision for doubtful debts To Provision for income tax To Debenture interest To travelling expenses To Legal expenses To sundry expenses To General expenses To trade expenses To Repairs To Depreciation To Net Profit c/d ….. …. _____ By Gross Profit b/d By Rent received By Interest Received By Discount received By commission received By Dividend received By Bad debts recovered By Miscellaneous receipts By Transfer Fees ……..... …… ______

Profit and Loss Appropriation A/c Profit and Loss Appropriation Account Appropriation means division. Profit and Loss Appropriation Account shows the division of company’s profits. The Profit and Loss Appropriation appears as follows: ……….…..Co.Ltd. Profit and Loss Appropriation A/c For the year ended …………. Particulars L/F Rs Rs. To dividend paid To Dividend proposed To interim dividend To Bonus to shareholders To Transfer to sinking fund for redemption of debenture To Transfer to capital redemption reserve To transfer to dividend equalisation To Transfer to investment fluctuation reserve To transfer to general reserve To Transfer to contingency reserve To Balance carried to Balance sheet ---- …… ....... ….. By Previous year profit By current year profit By transfer from reserves By provision no longer required ----------- ----------- …… …… ------------- -------------

The Indian companies Act,1956 Balance Sheet A balance sheet is a statement of assets and liabilities. It shows the financial position of a business on a particular date. The balance sheet of a company must be prepared in the prescribed for, the summarised version of which is given below: The Indian companies Act,1956 Schedule VI Part I (Section 211) ……….…..Co.Ltd. Balance Sheet As at …………. Liabilities Rs Assets Rs. Share Capital: Authorised Issued: Subscribed: Less: Call in arrears Add: Forfeited shares Reserves and Surplus: Capital reserved General Reserved Share premium Debenture redemption fund Capital redemption reserve Profit and Loss Appropriation A/c ---- …… ....... ….. …. Fixed Assets : Goodwill Land and Building Leaseholds Railway sidings Plant and Machineries Furniture and Fittings Patents and Trademarks Development of property Live stocks Vehicals Investments: Govt. Bonds ----------- ----------- …… …… ------------- -------------

Liabilities Rs Assets Rs. Secured Loans : Debentures Bank Loans Interest due on above Unsecured Loans: Public deposits Short term Loans Current Liabilities: Bill payable Sundry Creditors Unclaimed dividend Outstanding expenses Interest accrued but not due Provisions: Provision for taxation Proposed dividend Provident fund Pension fund Insurance fund ---- ...... ….. …… Shares and debentures in other companies Current Assets: Interest Accrued on Investments Stores and Spare parts Loose tools Closing stock Sundry debtors Cash in hand Cash at bank Loan and Advanced: Bill receivable Prepaid insurance Miscellaneous Expenses: Preliminary Expenses Discount on Issue of shares and Debenture Underwriting Commission Interest paid out f capital during construction Advertising suspense Account Profit and Loss account: Net Loss ....... …. ----------- ----------- …… …… ------------- -------------