NFRS Financial Statement Analysis
Complete solution from Trial Balance to Profit or Loss and Statement of Financial Position
Question Details
7. 2080 GIE Set A Q.No. 20
A trial balance of a limited company as on 31st Asar is given below.
| Particulars | Dr. (Rs.) | Particulars | Cr. (Rs.) |
|---|---|---|---|
| Investment | 1,20,000 | Sales | 2,01,000 |
| Debtors | 22,000 | Dividend received | 22,000 |
| Goodwill | 32,200 | Creditors | 40,000 |
| Bank balance | 16,000 | Share capital | 2,00,000 |
| Interest expense | 7,500 | Loan | 1,50,000 |
| Opening stock | 8,000 | ||
| Purchase | 92,000 | ||
| Equipment | 2,00,000 | ||
| Promotion expenses | 15,300 | ||
| Salary expenses | 50,000 | ||
| General expenses | 30,000 | ||
| Repair expense | 8,000 | ||
| Stationery | 12,000 | ||
| Total | 6,13,000 | Total | 6,13,000 |
Additional Information:
- Closing stock: Rs. 1,00,000
- Salary payable (accrued): Rs. 5,000
- Depreciation on equipment: Rs. 10,000
- Provision for tax: Rs. 15,000
- Goodwill written off: Rs. 12,200
Required (Option-1): a) Profit or loss statement based on NFRS. b) Statement of financial position based on NFRS.
Solution
a. Statement of Profit or Loss (For the year ended 31st Asar)
| Particulars | Amount (Rs.) | Amount (Rs.) |
|---|---|---|
| Revenue | ||
| Sales | 2,01,000 | |
| Dividend received | 22,000 | |
| Total Revenue | 2,23,000 | |
| Cost of Goods Sold | ||
| Opening stock | 8,000 | |
| Add: Purchases | 92,000 | |
| Less: Closing stock | (1,00,000) | |
| Cost of Goods Sold | 0 | |
| Employee benefits | ||
| Salary expense | 50,000 | |
| Add: Salary payable | 5,000 | |
| Total Employee benefits | 55,000 | |
| Depreciation expense | 10,000 | |
| Finance costs | ||
| Interest expense | 7,500 | |
| Other expenses | ||
| Promotion expenses | 15,300 | |
| General expenses | 30,000 | |
| Repair expense | 8,000 | |
| Stationery | 12,000 | |
| Goodwill written off | 12,200 | |
| Total Expenses | 1,50,000 | |
| Profit before tax | 73,000 | |
| Less: Provision for tax | 15,000 | |
| Profit for the year | 58,000 | |
b. Statement of Financial Position (as at 31st Asar)
| Assets | Amount (Rs.) | Liabilities & Equity | Amount (Rs.) |
|---|---|---|---|
| Non-current assets | |||
| Equipment (cost) | 2,00,000 | Loan | 1,50,000 |
| Less: Accumulated depreciation | (10,000) | ||
| Carrying amount — Equipment | 1,90,000 | ||
| Goodwill | 32,200 | Share capital | 2,00,000 |
| Less: Goodwill written off | (12,200) | ||
| Carrying amount — Goodwill | 20,000 | Retained earnings | 58,000 |
| Investment (non-current) | 1,20,000 | ||
| Total non-current assets | 3,30,000 | Total equity | 2,58,000 |
| Current assets | |||
| Closing stock | 1,00,000 | Current liabilities | |
| Debtors | 22,000 | Creditors | 40,000 |
| Bank balance | 16,000 | Salary payable | 5,000 |
| Total current assets | 1,38,000 | Provision for tax | 15,000 |
| Total Assets | 4,68,000 | Total Liabilities & Equity | 4,68,000 |
Summary:
• Profit before tax = 2,23,000 − 1,50,000 = 73,000
• Profit after tax = 73,000 − 15,000 = 58,000
• Equipment = 2,00,000 − 10,000 = 1,90,000
• Goodwill = 32,200 − 12,200 = 20,000