CORPORATE ACCOUNTING UNIT-4 FORM-B PROFIT&LOSS A/C | PROBLEMATIC EXPLAINATION (1) ‎shivanipallela

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[00:00:00]Hello students, welcome back to our channel. So, here in this video we are going to discuss the topic two in unit number four for the subject corporate accounting. In previous video, we have already discussed topic number one that this form A that is balance sheet. Here in this video, topic two problematic method of the subject corporate accounting unit number four. That is form B. So, we are going to discuss form B complete explanation in this video.

[00:00:31]So, I request you to watch the first topic explanation after that then only watch the form B. Okay? After watching form B only. Okay? Directly if you are seeing this video, you will not understand anything. So, first you watch topic one, then only you need to watch the topic two. Okay? So, by this video we will complete overall fourth unit explanation. Okay? So, form B proforma this is the form B proforma. There are four heads actually. So, head number one is income. In income you will have interest earned and other income. That is schedule number 13 and schedule number 14. In second, you will have expenditure. That is 15 and 16. That is interest expended and operating expenses and provision and contingencies. Next the third one you will have profit or loss. That means from income you need to deduct the expenditure, you will get the net profit [clears throat] or a net loss. And fourth one apportionates. That is appropriations also we will call it as. Okay? So, here you will have this kind of related data if you are finding in the question means you need to do you need to keep it here.

[00:01:43]Okay? So, total there are four heads in the profit and loss account. That is called form B. When they are saying balance sheet, it is considered as a form A. But when they are saying profit and loss account, we need to consider it as a form B. Clear? So, this is the pro forma. So, make sure you take a screenshot of the pro forma, ma. Okay?

[00:02:05]So, we will directly go to the question.

[00:02:08]So, see here the question, ma.

[00:02:11]They have given the from the following ledger balances of Sreedhar Bank Limited as on 31st March 2020, prepare profit and loss account and the balance sheet.

[00:02:22]So, in one question, they are asking profit and loss account as well as balance sheet. So, profit and loss account is form B. Balance sheet is form A. Okay? Form A is completely same like what we have discussed in topic one.

[00:02:37]There is not at all having any difficulty in understanding that. So, we need to understand on concentrate only on the profit and loss account. Okay?

[00:02:45]So, in profit and loss account, before starting the pro forma before starting the solution, first you need to draw the pro forma. Okay? There is no change in the pro forma, right? So, what is the pro forma form B? Profit and loss account of Sreedhar Bank Limited. So, what is the thing you are having? Head number one you will have, ma.

[00:03:05]Income.

[00:03:08]Okay?

[00:03:09]In income, what will be there?

[00:03:13]Interest earned.

[00:03:18]Interest earned is schedule number 13.

[00:03:21]Yes? Next one you will have other income.

[00:03:25]Other income. This is schedule number 14.

[00:03:30]Clear? So, total we need to do it. Total of one.

[00:03:35]So, you will get the total value.

[00:03:37]Okay? In head number two, what you will have? Expenditure you will have. Yes?

[00:03:44]So, expenditure.

[00:03:47]In expenditure, again there are other things will be there in the pro forma.

[00:03:51]Okay? What is the other things will be there like interest expended, operating expenses, and provision and contingency.

[00:03:58]Same pro forma we need to write it for everything. Okay, there is no difficulty in in the pro forma. There is no change in the pro forma. This is schedule number 15. Next, operating expenses is schedule number 16. Next one you are having provisions and contingencies. There is not at all having any contingencies g e n c i e s. Okay, there is not at all having schedule number.

[00:04:32]Okay, here you are not having any schedule number. Just keep it nil. Okay, after doing this So, first we'll discuss how we will calculate interest earned, how we will calculate other income, everything we will discuss clearly. Okay?

[00:04:49]So, working notes is compulsory, ma. How to calculate interest earned means what is the interest and deposits we are getting from the pro forma you need to understand. Okay? So, balance sheet what are the items will come here, what are the items will come, you need to understand what it will come everything.

[00:05:07]Clear? So, that is the thing you need to do it. So, term deposits you are having 325, SB deposits you are having 1775, demand deposits is like this you are having like interest and deposits you are having salaries, rent, audit fees, premises. Like that there are different things you are having here in the things. So, first you need to understand incomes. What are the incomes we are having? So, term deposit deposit is not an income. We are depositing to the bank. Yes? Deposit again not at all having any income here. So, what is the income you are having? Interest and discount. Means interest and discount we are having the that is something we are earning. Yes or no? Interest and discount will come here in the interest earned. From that what we need to do the rebate? So we rebate whenever they are giving no, so we need to do the minus.

[00:06:04]Okay, so that is rebate on bills discounted whatever they have given on the screen means in the question is that we need to simply we need to do the minus. Okay?

[00:06:14]So what is the rebate on bills discounted 5,000? See here the question balance sheet as on the date. See here they have given three zeros are omitted in the balance sheet means for every answer say 325 no, like it will be like 325 again three zeros like this it will be 325,000.

[00:06:36]This three zeros is omitted it seems that means they are not showing. So when you are taking a rebate also rebate they have given 5,000 no, you need to deduct these three zeros. What is the remaining balance? Five. So rebate is five. Like this you need to understand ma. Okay?

[00:06:52]Sometimes this type of difficulty also they will give. So interest earned we are doing schedule number 13 no, so whenever we are having rebate we need to do minus. So we need to do the working notes. So schedule 1 2 3 4 5 6 7 8 9 10 11 12 and 13.

[00:07:13]Okay? So 10 11 12 and 13. So 13th schedule. So this is working notes no, I will explain it later. Same like form A how we have done like this. So schedule 13. Okay? Schedule 13 we are doing for interest earned. Yes or no? So interest earned.

[00:07:32]What are the items is there? We are getting interest and discount. Interest and discount will come here in the interest earned.

[00:07:44]So what is the interest and discount?

[00:07:46]325.

[00:07:48]So 325.

[00:07:51]Okay, from that rebate we need to do minus. So what is the rebate? Five. So 325 minus five is 320. So answer is 320.

[00:08:03]This final answer only we need to put it here in the balance sheet. So here what you will do here you will only keep 320.

[00:08:12]20 Clear? So like this you need to show it in the table. Okay, if you add three zeros also no problem, but you need to add for everything. So 325000, 1775000, 3875000 like that. So instead of that you can calculate like this also. Okay.

[00:08:31]Next, except this whatever the other incomes will come, just we need to put it out here in the other incomes. Okay.

[00:08:39]So what are the other incomes we are having in the question, ma?

[00:08:43]Except interest and discount, nothing.

[00:08:46]You are not having any other incomes. So other incomes we are not having anything. So other income schedule number 14 is nil.

[00:08:55]Okay. So total incomes how much you are getting? 320.

[00:09:00]So 320 is the total income. Now same way expenditure also. In expenditure you are having interest expended, operating expenses, provisions and contingencies.

[00:09:12]So in interest expended, what are the items will come? We need to show it in the working notes first. So after schedule number 13, we are not having schedule number 14 any working notes, no? So directly I'm doing schedule number 15. Okay. So here I'm writing schedule 15. What is that? Interest expended.

[00:09:37]So, interest expended. Okay, for this I'm doing.

[00:09:46]What is the interest expended? What are the things will come means only related to the interest and deposits only we will having. So, interest and interest on deposits is nothing about it will come here in the interest expended. So, interest on deposits how much you are having? 100. Okay, only that item only you are having, no? So, simply you need to show it that only, okay? So, section number one here I'm writing interest on deposits.

[00:10:19]How much it is? 100. So, total is 100.

[00:10:25]Okay? So, this total only you need to write it here in the table. So, 100.

[00:10:31]Yeah? So, like this you need to show it.

[00:10:34]Next what you are having? Operating expenses. So, schedule 16. So, here I'm writing schedule 16.

[00:10:48]Operating expenses we are doing the working notes. In operating expenses all other expenses will come here in the operating expenses only. For example, salaries is an expense, rent is an expense, yes or no? Audit fees is an expense, yes? Next what are the other things will be there here?

[00:11:07]General expenses an expense, yes or no?

[00:11:10]Simple thing. And allow 5% depreciation on premises on original cost. So, whatever the premises you are having in the table, no? Like that this is the premises, no? For that premises you need to take 5% depreciation. This all are expenses only. All other expenses will come here in the operating expenses. So, simply I'm writing that only. So, what are the things is there? So, salaries you are having.

[00:11:37]Okay. So, salaries is 60. Next what you are having? Rent you are having.

[00:11:44]Rent is 10. Next you are having audit fees.

[00:11:49]So, audit fees is five. Okay. Next one, general expenses you are having.

[00:11:57]General [snorts] expenses is also an expenses. Yes or no? Here also you are having five. Okay. So, next what they are having? Depreciation on premises, no?

[00:12:08]So, depreciation on premises.

[00:12:12]So, how you will do this depreciation on premises? Means see here, what is the premises they have given? After depreciation they are saying 1 lakh rupees. That's it.

[00:12:22]1 2 3 4 10,000. Actually it is 10,000.

[00:12:25]After depreciation it is 10,000. So, it is 600. So, 600 and again three zeros is omitted, no? So, you need to add these three zeros. So, what will be the value of premises? Actually it is a 6 lakhs is the premises value.

[00:12:42]Okay. So, 6 lakhs is the premises value and here again this is 1 lakh actually.

[00:12:47]This is not 10,000. It is 1 lakh. So, 6 lakhs plus 1 lakh total it is 7 lakhs.

[00:12:52]So, total 2 3 4 5. So, total premises is 7 lakhs, no? So, for this 7 lakhs only you need to take 5% depreciation. Okay. So, that is 7 lakhs into 5%.

[00:13:10]So, how much it will be?

[00:13:12]7 lakhs into 5% it will be 35,000.

[00:13:16]Here in 35,000 you need to deduct this three zeros is omitted, no? That is not there. So, three zeros remove it.

[00:13:25]Okay. Three zeros if you are removing means sorry, sorry. Three zeros if you are removing means what will be the answer? 35. Only 35 only you need to take it. Because in in other things you are not taking three zeros, no? So, simply 35 plus 10 plus again 10 plus 60.

[00:13:42]How much it will be? 115.

[00:13:45]So, total operating expenses is 115.

[00:13:49]That only we need to write it over here in the table. So, operating expenses schedule number 16 we have got 115.

[00:13:58]So, like this you need to show it in the examination point of view. Clear?

[00:14:03]Understood? Next. Provisions and contingencies. So, provisions and contingencies what is the items we are having in the table you need to check out, okay?

[00:14:15]Where you will check this provisions and contingencies means see here.

[00:14:19]Uh we have already taken interest and deposits. We have taken salaries, rent, audit fees is over. Premises calculation is also over. And next we have taken interest on deposits, general expenses is also over. So, whatever uh we have taken just I'm making sure I'm just taking a small tick here so that I will get a clarity. So, next you are having all other expenses, no? Here also we have taken rebate one time. And depreciation also we have taken. Uh Provide 25,000 doubtful debts and provision 40,000. So, this is also kind of expenses. So, that kind of expenses provisions and contingencies will come here only, no? Provisions. So, what they are saying? 25,000 for the doubtful debts. So, here I'm writing 25,000 doubtful debts plus 40,000 for the provisions. So, totally it will be 65,000.

[00:15:12]Okay. For this 65,000 we need to deduct these three zeros because three zeros we are having omitted, no? So, that's why three zeros remove it. So, what is the answer is left over? 65, no? So, directly I'm writing the 65. There is no schedule number for the provisions and contingencies. Okay? So, like this you need to do it. Clear? Understood? So, total you need to do only this three only will come, no? So, do the total.

[00:15:39]So, 65 + 115 + 100. So, 215 + 65 it will be like 280.

[00:15:47]Okay? So, after doing this 280, you need to check whether we got profit or whether we got loss.

[00:15:55]How you will check this means? This is third one, no? So, what you will write?

[00:15:59]Net profit. Net profit formula is 1 minus 2.

[00:16:06]Okay? So, net profit of the year. So, how you will write this one, no? So, 320 minus 280.

[00:16:14]So, 320 minus 280 it will be like around 40.

[00:16:18]Okay? For this 40, you need to bring the profit from last year. So, profit from last year. Okay? So, what is the profit from last year we are having in the question, no? So, see here, profit and loss account credit balance on 2019, no?

[00:16:38]So, how much it is?

[00:16:40]Uh 130. Okay? So, for that 130 you need to take it here only. Because last year profit, no? You need to take it. If it is not there means keep it. No need to mention. That's it. Okay? So, now do the total of three. 130 + 40 is 150, 160, 170.

[00:16:58]So, this is total for third one.

[00:17:04]This is total for second one.

[00:17:08]This is total for first one. After that, and the last part in the pro forma what you will have? Apportionates.

[00:17:15]Okay? A P P O R appropriations or apportioned anything you can call it as appropriation. Here in appropriations, what are the things we are having?

[00:17:24]Everything we need to get to know here.

[00:17:26]So, what is the profit we got? 40, no?

[00:17:29]For this profit, we need to reserve we need to take the reserve.

[00:17:33]Okay? So, what is the reserve they have have having here? So, here I'm writing.

[00:17:38]So, transfer to statutory reserve.

[00:17:49]Okay?

[00:17:50]And remaining balance it will be carried down to the balance carried down to the balance sheet. So, that's it. Okay? So, transfer to uh statutory reserves reserve you need to take 25% on the profit. That means 40 into 25%.

[00:18:13]How much it will be?

[00:18:15]40 into 25% it will be like around 10.

[00:18:18]Okay? So, 170 minus 10, how much is the carried down? 160.

[00:18:25]So, like this you need to do it. So, here also it will become 170.

[00:18:31]Clear? That's it. Only this part only will come here in the profit and loss account. This is total four.

[00:18:41]170. So, total three and total four like this it should get tally tally. Okay?

[00:18:47]So, this is the way of doing the profit and loss account. But here in the question they are asking balance sheet also. So, how we will do the balance sheet? Balance sheet in the format however I have explained from capital one to from first to uh schedules you will have, no? So, for that schedules, we need to do the same way. There is no change in that. So, what is the thing you will have it here, ma? Capital and liabilities you will have. So, capital and liabilities. In capital and liabilities, what is the first one you will have?

[00:19:26]First one you will have capital, that is schedule number one. Next, you will have reserves, that is schedule number two.

[00:19:36]Okay? Next, you will have deposits.

[00:19:39]Yes or no? That's why I'm saying that you you need to watch topic one first, then only watch topic two, okay? Then only you'll understand. Next, you are having borrowings.

[00:19:51]That is schedule number four. Next, you will have other liabilities.

[00:20:00]This is schedule number five, okay? So, after doing schedule number five, you need to do the total. Total liabilities, so total you'll get the value, okay?

[00:20:11]After doing that, next you will have the assets part.

[00:20:17]In assets, first you will have cash and balance at RBI.

[00:20:22]Yes?

[00:20:24]This is schedule number six. Next, balance with bank you will have.

[00:20:33]This is schedule number seven.

[00:20:35]Next, you will have investments.

[00:20:38]This is schedule number eight. Yes?

[00:20:40]Next, you will have advances.

[00:20:43]This is schedule number nine.

[00:20:46]Next, you will have fixed assets. This is schedule number 10.

[00:20:50]Yes? Next, what you will have? Next, you will have other assets.

[00:20:56]This is schedule number 11, okay? So, total uh six to 11 you will have in the assets part. Just you need to do the total. Then total of assets you will get. After getting total of assets, you will get you will have any contingent liabilities means that is called contingent liabilities.

[00:21:17]Will be schedule number 12.

[00:21:20]If any other there is the like bills for collection is there means that will comes here only. Bills for collection.

[00:21:28]Okay, so no no at all having any schedule number like this only the pro forma will be no. Simply we need to do like that according to that only we need to do it.

[00:21:37]Okay, so how you will do this kind of things now I'll explain it in a easy and simple way. Clear?

[00:21:45]Simply first what you are having my capital no, so what is the share capital you are having? 250.

[00:21:51]Okay, that you need to do the working notes you need to show it here. So table name is schedule one. You're showing for the capital.

[00:22:03]Okay, so share capital how much it is?

[00:22:12]250. Yes or no? So 250 in the amount you are writing.

[00:22:16]This is first one. Okay, so here also you need to write this 250.

[00:22:22]Clear? Understood? Next when you are doing schedule two, so schedule two working notes also definitely you need to do it. Yes or no? Schedule two you are doing for reserves.

[00:22:36]Yes or no?

[00:22:37]So how you will do this for reserves? So statutory reserve is a reserve only no?

[00:22:43]So statutory reserve we got 150.

[00:22:47]Yes or no? So 150, what is a transfer to statutory review reserve we got 10. So both we need to do addition. Okay, so what is the balance you will get it?

[00:22:58]160. So everything you will do it like this here. So first what you need to do is what is the statutory review?

[00:23:06]Statutory reserve. Statutory reserve is 150.

[00:23:12]For that, we need to add the additional reserve during the year.

[00:23:19]Additional rear is 110 10. So, total it will be 160. Yes? For this 160, what is the balancing figure of profit and loss account, what is the balancing figure to balance sheet? 160, no? So, this is also you need to add it.

[00:23:35]So, balancing figure from balance sheet. Again, it is 160. So, 160 160 160 + 160 320.

[00:23:49]So, total reserves you got 320. So, you need to show the working notes and directly amount you need to put it out here.

[00:23:57]Next, deposits. Whatever the deposits you're having, like for example, team deposits, SB deposits, demand deposits, deposits all will come here in the deposits only, no? So, that you need to show it here. That is called schedule three you're doing for deposits.

[00:24:20]So, what is the deposits you're having?

[00:24:21]First one you're having term deposits.

[00:24:29]That is 325.

[00:24:31]Next one you're having the SB deposits.

[00:24:35]That is 1775.

[00:24:38]Yes? Next one you're having the third one you're having the demand deposits.

[00:24:48]3875. Only these three you're having, no? Just add all these things. That is 325 + 1775 plus 3875.

[00:24:59]3875. So, total it will be 59 75. So, total it is 5975. Where you will write this 5975? Here only. So, 5975.

[00:25:13]Okay. Next Next you are having borrowings, no? So, in borrowings only borrowings will come.

[00:25:19]What is that? 480.

[00:25:21]So, that is directly I'm writing 480, but you need to show it here, also.

[00:25:26]So, schedule four borrowings 480. Here also you need to mention borrowings because we are doing for borrowings, no? So, that is the thing.

[00:25:45]Next, in schedule five What will come here in schedule five?

[00:25:52]Other liabilities.

[00:25:55]In schedule five, other liabilities.

[00:25:58]So, other liabilities means what are the things will come? See here in the question.

[00:26:04]Bills payable is a liability. Yes or no?

[00:26:07]Simple thing, simple answer. Bills payable is a liability. Creditors is a liability. Yes? Unclaimed dividends is a liability. Yes? Provision for taxation is a liability. So, what are the other liabilities you are having? You need to add it over here in the schedule number five.

[00:26:26]So, what are the things we are having?

[00:26:28]First one we are having, ma? Bills payable.

[00:26:33]Okay. So, what is the bills payable we got here? 400.

[00:26:38]Okay. Next you are having creditors.

[00:26:45]25 Next you are having unclaimed dividends.

[00:26:57]>> That is five.

[00:26:59]Next, you are having provision for taxation.

[00:27:03]Okay. So, what is the provision for taxation?

[00:27:08]Provision for taxation is 40,000. So, 40,000 means three zeros you need to cancel. What is the remaining thing? 40.

[00:27:15]That 40 only you need to show it. Only 40 you need to show it. Same rebate for discount also 5,000. So, three zeros if you are deducting means only five it will be there. Yes? So, that is called fifth one rebate.

[00:27:30]Okay, simply do the total. So, 400 + 25 + 5 + 40 + 5. It will be 475.

[00:27:43]Yes? This 475 directly we need to write it here.

[00:27:49]Clear?

[00:27:51]So, just do the total liabilities. That means 250 + 320 + 5975 + 480 + 475.

[00:28:02]How much it will be? 7500.

[00:28:05]So, 75 00.

[00:28:08]Okay, this is total that. Next, cash at RBI. So, what is the things will come here in the cash at RBI? So, what are the things is there we need to identify that. So, >> [clears throat] >> what are the things will come? What is cash in hand or whatever they have given in the question we need to identify first that. Okay? So, what is that? Cash in hand is 75. Cash at RBI is 705. So, both will combinedly we need to add it over here. That is schedule six, no? So, schedule six you're doing for cash.

[00:28:44]So, cash in hand you are having 75.

[00:28:54]Cash at RBI you are having 705.

[00:28:59]So, 705 + 75 So, 705 + 75 is 780.

[00:29:07]This 780 you need to write it over here.

[00:29:09]You need to show the working notes and you need to write the direct amount here. That is 780.

[00:29:14]After 780, what you are having? Balance with bank, that is schedule seven.

[00:29:19]Okay. For this balance with the bank, what are the things will come? Simple thing, whatever the left over is there.

[00:29:25]Like cash of other banks it will come here in the cash at bank only. Next, money call at short notice is 240, that will also come here only. So, where it will come in schedule seven. If it is coming here means we need to show it on the working notes, no? So, schedule seven.

[00:29:45]So, what is the thing is there?

[00:29:50]Cash at other banks 520.

[00:30:02]Next, you are having this also, no?

[00:30:04]Which one? Money at call 240.

[00:30:19]Total 760.

[00:30:21]That's it.

[00:30:23]So, 760 directly we need to write it over here.

[00:30:27]So, the 520 plus 240 760.

[00:30:32]So, where you will write that? Schedule seven.

[00:30:35]So, here I'm writing 760.

[00:30:38]Next, investments. So, what are the things will come here in the investments? Only investments is there, no, here in the question itself. Only investments only will come. That is 1550.

[00:30:49]But, you need to show it in the working notes. 1550 also you need to show it.

[00:30:54]That means schedule eight investments.

[00:31:03]What is the amount of investments? 1550.

[00:31:07]That's it.

[00:31:08]You need to just show it here.

[00:31:10]Okay. In schedule nine what you will do?

[00:31:17]Advances.

[00:31:20]In advances, what are the things will come? Simple thing. In the question, whatever the bills discounted means there, that will come here itself only.

[00:31:28]Yes? So, bills discounted will come here in the schedule nine. Okay? From that provisions we need to do minus. Yes? So, everything we need to do. So, see here.

[00:31:39]So, bills are discounted.

[00:31:45]So, bills discounted, how much it is there, ma? 250, right? So, 250 I have kept here. Okay? So, next whatever we are having, like cash creditors, overdraft, loans, everything whatever we are having, we need to do here only.

[00:31:59]Okay? So, cash creditors etc. What you are having? 35.

[00:32:08]3500.

[00:32:12]From that provisions, what we need to do? We need to do minus.

[00:32:18]So, what is the provisions they have given? 40,000. That means three zeros you need to deduct it. And provision for doubtful debts 25,000. Three zeros if you're deducting means you'll get just 25. So, 3500 minus 25 3475.

[00:32:33]So, 3475 plus 250 is nothing about 37 25.

[00:32:41]Okay, directly this 3725 you need to write it over here. 3725 Okay. Next, fixed assets. So, what are the fixed assets we are having? Same thing simple thing 6 lakhs 600000 no, total 6 lakhs. Here also 1 lakh. So, total it will be 7 lakhs. So, that means 7 lakhs minus three zeros. Three zeros is omitted no? If you are deleting this three zeros 700 you will be having. So, premises is 700. Depreciation we got what is the depreciation we got in the thing? Depreciation is 5% no? That also you need to do it. Okay. So, fixed assets we are having having only for premises no? So, schedule 10 fixed assets. So, for this fixed assets, what is the premises we are having no? So, 6 lakhs plus 1 lakh. So, total it will be 7 lakhs minus depreciation.

[00:33:42]Depreciation how much we got no? 135 Yes or no? What is the depreciation we got? 135. That we need to do the minus.

[00:33:51]So, when you are doing the minus you will get the value that 565.

[00:33:57]So, directly that amount only we need to write it over here.

[00:34:01]So, 5 6 and 5.

[00:34:05]Next, other assets. Whatever the other other assets is there that you need to write it over here itself. So, nothing is there only non-banking assets is there 120. Directly that 120 we need to write it over here.

[00:34:16]So, but you need to show it definitely.

[00:34:19]So, schedule level is schedule level is other assets.

[00:34:25]So, other assets How much you are having other assets, no?

[00:34:38]120, yes?

[00:34:41]120. Directly I have shown that 120 here.

[00:34:45]So, simply we need to add it.

[00:34:47]So, that means 780 + 120 + 760 + 1550 + 3725 + 565.

[00:34:58]So, that will become 7,500.

[00:35:03]So, like this liabilities, like this asset, it should get tallied. So, whenever it is getting tallied, you will you It means that you have done correct answer. Clear? So, next you're having the contingent liabilities, also, no?

[00:35:17]So, contingent liabilities, also, we need to do it. What is the contingent liabilities we got it here in the question? What they have given in the question for contingent liabilities?

[00:35:25]Means, see here, and acceptance endorsement made by bank on behalf of customers, 1 lakh 20,000. See, simple here, 1 lakh 20,000 minus three zeros.

[00:35:36]So, how much it will be? 120. That is called 120 will be here in the contingent liabilities. But, you need to show it, no?

[00:35:45]In the working notes. So, schedule number 12.

[00:35:53]Contingent liabilities.

[00:35:56]120 you need to show it, okay?

[00:35:59]Here.

[00:36:01]Next, any bills on bills for collection you're having, uh, you need to check out here, okay? So, what is there in the question is any bills for collection is there or not? See here in the question, bills for collection amounted 70,000.

[00:36:15]Simple here, also. 70,000. This three zeros is omitted. How much it will be?

[00:36:20]Only 70.

[00:36:22]Okay? So, directly no schedule number 70 directly I'm writing here. No need to add anything, no need to deduct anything. This is how you need to show it in the form A. So, whenever they are asking form B, like this you need to do.

[00:36:35]After doing this form A you need to do. But, for everything whatever you are doing you need to do or show the working notes.

[00:36:42]So, schedule 1 2 3 and 4 5 6 7 8 9 10 11 12 13 15 16, for everything you need to show the working notes. Working to show notes is mandatory, okay?

[00:36:55]Now, we'll discuss another question for more clarity, ma. See here, from the following particulars prepare profit and loss account for the year ended 31st March 2000 17. So, simply we need to do the profit and loss account. Simple data they have given. Interest on deposits, commission, everything like this they have given.

[00:37:14]So, first we need to do the profit and loss account, no? So, before that we need to draw the table. So, form B profit and loss account of Safely Bank for the year ended 31st March 2000 uh 17, yes?

[00:37:27]So, simple thing. What is the proforma?

[00:37:29]First one you will have income, no?

[00:37:31]Simply I'm writing income.

[00:37:34]In income, what is the first thing you'll have? Interest earned.

[00:37:41]Schedule number it will be 13. How to calculate the schedule number 13? What are the items will come? Simple thing. So, interest earned is nothing about what are the items will we are earning. Like for example, interest on loan will come, yes or no? Interest on loan, interest on cash credit is an income for us, interest on deposits is a income for us, yes or no? Next, incomes on bills of discount is also income for us. These four items will come here in the interest earned. So, you need to do the working notes. So, you are doing working notes for schedule number 13.

[00:38:16]So, schedule 13 interest earned you're doing. So, what are the items we are getting? So first one interest on loan.

[00:38:28]So interest on loan, how much is that?

[00:38:30]2490, no? So 2490.

[00:38:34]Next what you will get, no?

[00:38:37]Next discount on This one also will get. Discount on bills discounted.

[00:38:42]So discount on bills discounted is 1490.

[00:38:51]Next interest on cash credits 2320.

[00:38:55]2320 is interest on cash credit. Yes or no? And next one you will get interest on overdraft also will be here in the interest on because we are receiving an interest, no? So interest on overdraft, how much it is?

[00:39:12]1600.

[00:39:14]So simply we need to do the addition.

[00:39:17]That means 2490 + 1490 + 2320 + 1600 if you are doing means you are getting 7900 total. So this total overall value only we need to write it over here. That is 7900.

[00:39:36]Okay? After doing the 7900, whatever the other commission is there, like other incomes like that it will be here there, no? So other incomes will be there. So other income is schedule number 14. So other income schedule number 14. So except this, what are the other incomes we are having? Other incomes we are having only commission, that is credit side they are saying, so that's why commission is an other income. So directly we need to write it over here, 100. But you need to show the working notes, no?

[00:40:05]So schedule 14 commission you are doing.

[00:40:13]So only commission you you having, that is 100, you need to show it here. Okay?

[00:40:18]So, commission credit 100. That you need to show it.

[00:40:24]Okay? After income, you need to do the total income. So, 7,900 + 100 is 8,000.

[00:40:31]So, total income is 8,000. This is total one.

[00:40:37]Okay? Next to second one you will have expenses, no?

[00:40:42]Expenditure.

[00:40:44]In expenditure you will have 15 16. What you will have here in the pro forma?

[00:40:49]Interest expended. That is 15th one.

[00:40:54]Next you will have operating expenses.

[00:40:57]Same pro forma I'm writing operating expenses is schedule number 16. Yes?

[00:41:03]Next provisions and contingencies is nothing. Only these two only you will have. So, how what is there in the uh interest expended? In interest expended you are having only one thing.

[00:41:15]What is that? You are having only one thing that is interest on deposits. So, interest on deposits will come here in the interest expended, no? How much it is? 3,200.

[00:41:26]So, here I'm writing 3,200. notes, no?

[00:41:32]So, schedule 15 3,200.

[00:41:39]From where we are getting for that 3,200, ma? So, 3,200 is interest on deposits. Yes? Here you need to write that only. So, interest on deposits 3,200. Directly I have wrote that. And whatever the other expenses like auditors' fees, directors' fees, bad debts, payment to employees. Okay? So, all of the remaining stuff will go to the other expenses. But you need to show it here also. So, schedule 16.

[00:42:09]So, schedule 16, other expenses.

[00:42:16]Other expenses, what you are having?

[00:42:18]Sundry charges you will have.

[00:42:23]Okay? 100 Next, you are having auditors fees.

[00:42:31]Remaining all other expenses will come here only, 35.

[00:42:36]Next, payment to employees.

[00:42:45]500 Next, rent and taxes.

[00:42:53]200 Next, you are having directors fees is also an expense for us.

[00:43:01]Okay?

[00:43:02]16 Okay, like this you are having. Just add all these things.

[00:43:07]So, 100 + 35 is 135. 500 + 200 700 + 16 is 851.

[00:43:16]So, 851 is the total other expenses. So, directly here I'm writing 851.

[00:43:24]Okay? So, after writing this, other provisions and contingencies. Is there having any provisions my here in the question? Just check out. Provisions. So, we need to check once again. Okay, what is there in the provisions? Anything is there. So, bad debts is considered as a provision and so we know. So, directly we need to show it. No need There is not having any schedule number, so no need to show the working notes. So, you will get the total expenditure. So, how you will do the total? Just add the total of two.

[00:43:53]Okay? So, 3,200 + 851 + 300. How much it will be? 4,351.

[00:44:01]This is called total expenditure. So, total expenditure afterwards you will need to do the net profit or net loss.

[00:44:08]So, net profit 1 minus 2. That means 8,000 minus 4351.

[00:44:19]How much you're getting?

[00:44:21]3649.

[00:44:23]Okay?

[00:44:24]For this, we need to add last year profit or loss. So, profit or loss from last year.

[00:44:36]We nothing is there. So, final answer is also same thing. That is 3649.

[00:44:43]That's it.

[00:44:44]Simple, easy question, ma. So, like this type of questions also they'll mostly ask in the 12 marks. Okay? So, this is the question. So, only table they have given. So, where we need to take, we need to understand that. Clear? So, that is the only thing. And the last question I'll explain, ma. This is the last question.

[00:45:03]See this question also so that you'll have more clarity. Okay? So, what is there in the question, ma? From the following information, prepare profit and loss account for Dolly Bank Limited.

[00:45:14]Interest on loan they have given.

[00:45:17]Yes, interest on deposits they have given, other incomes they have given, operating expenses everything they have given. And they have given additional information also. Okay? Additional information also they have given. Simply they have given. So, we need to write it the first one. So, form B profit and loss account for Dolly Bank Limited for the year ended 31st March 2019. What is the first one you will have, ma? First one you will have income, no? So, simply here I'm writing income. For this income, what is the first one you will have? Interest earned.

[00:45:51]For this interest earned, schedule number is 13. So, interest on loan only one thing you are having. That is 120,000.

[00:45:59]You need to do the working notes for this also, but I'm not doing, but you need to do it, okay? So, 1 2 3 4 5 6 1 2 3 4 5 1 2 3 4 5. That is 12 lakhs, not 1 lakh 20,000, okay? So, after interest earned, other incomes you will have no?

[00:46:14]So, other incomes, that is schedule number 14.

[00:46:20]What is the other income directly they have given? Same, 2 lakhs.

[00:46:24]So, you need to do the working notes, but here I'm not doing, okay? It is a time-taking process. Okay, simply you need to add this. So, 12 lakhs plus 2 lakhs is 14 lakhs.

[00:46:38]This 14 lakhs is total income.

[00:46:43]Okay? So, total income is 14 lakhs. Next one, second one you will have my expenditure, no?

[00:46:54]For this expenditure, what is the first thing you will have? Interest expended.

[00:47:04]Okay? So, interest expended only you are having interest on deposits, that is 10 lakhs. So, this is schedule number 15.

[00:47:13]10 lakhs.

[00:47:15]Okay? Next what you are having, my?

[00:47:17]Operating expenses. Yes, operating expenses is 40,000 they have given. This is schedule number 16, no? So, 40,000 directly I'm writing. Here I'm writing operating expenses.

[00:47:32]Yes, operating expenses this. Next one, provisions and contingencies you are having. Provisions and contingencies.

[00:47:43]For this we are having a small calculation.

[00:47:46]is there means you are having the total income we need to do the interest everything we need to do the minus, okay? You will get the final answer. So, how to do this kind of things means simply we are need to do the understanding the problem.

[00:48:01]How to do this means simple see here.

[00:48:04]So, calculation for provision for income tax. So, before understanding this you need to understand how to calculate this income tax. First you need to understand what is total income. So, total income how much we got 14 lakhs no. So, for this 14 lakhs we need to write it over here.

[00:48:22]So, whenever they are giving the percentage you need to do like this. So, for this 14 lakhs you need to deduct the operating expenses.

[00:48:33]And you need to deduct the interest expended also.

[00:48:39]Okay. So, what is the activities we got?

[00:48:41]10 lakhs plus 40,000 no.

[00:48:44]So, this we got 10 lakhs. You need to do minus and this is 40,000. This is also you need to do minus. So, that means from 14 lakhs if you are deducting 10 lakhs 90 40,000. So, 14 lakhs minus 10 lakhs 40,000 if you are deducting means you are getting the value of 3 lakhs 60,000.

[00:49:07]Okay. So, for this 3 lakhs 60,000 this will be considered as a provisions before tax.

[00:49:16]Okay.

[00:49:17]For this provisions before tax how much we got? 3 lakhs 60,000 no.

[00:49:24]Okay. How much is the tax percentage they have given 55%?

[00:49:29]So, you need to do 3 lakhs 60,000 into 55% is 1 lakh 98,000. So, like this you need to calculate. This 1 lakh 98,000 you need to write it over here in the contingencies.

[00:49:41]Now do the total of liabilities.

[00:49:47]So, 10 lakhs plus 40,000 10 lakhs 40,000 plus 1 lakh 98.

[00:49:58]So, how much it will be? 12 lakhs 38,000.

[00:50:03]Okay. Next, what you need to do?

[00:50:07]Net profit.

[00:50:10]That means 1 minus 2.

[00:50:14]So, 14 lakhs minus 12 lakhs 38,000. So, how much it will be? 1 lakh 62,000 is the profit. Okay. For this profit, you need to add any last year balance. So, balance from last year. So, but here we are having in the question that is 2 lakhs. Balance from past profit is 2 lakhs. We need to add that, okay? So, when you're adding that 2 lakhs, so 2 lakhs plus 1 lakh 62,000 is 3 lakhs 62,000.

[00:50:48]This is called total of third one.

[00:50:53]Okay. Next, fourth one what you are having, ma?

[00:50:59]Appropriations you are having, okay?

[00:51:02]So, for this appropriations, what are the items will come? So, first one will come transfer to dividend whatever they have given in the adjustment part, okay? So, how much is the adjustment part dividend they have given? 60,000, okay? So, here I'm writing 60,000, okay?

[00:51:22]For current year profit, next we need to take this statutory reserve, no? Next, statutory reserve. So, what is the current year profit, ma? 1 lakh 62,000. So, 1 lakh 62,000 into 25%. This 25% is default. In previous sum also we have taken 25% only. So, 1 lakh 62,000 into 25% if you are taking means you are getting the value of 40,500.

[00:51:49]You need to add it over here. After that, you need to carry the balancing figure. That means 60,000 plus 40,000 is 105,000.

[00:52:00]So, from 362,000 Sorry, 362,000 minus 105,000 if you are doing means how much is the balancing figure?

[00:52:10]Uh 1 minute.

[00:52:13]So, what is the 362,000? No. So, 362,000 minus 60,000 Are they?

[00:52:21]362,000 minus 60,000 minus 40,500. What is the balancing figure?

[00:52:30]261,500.

[00:52:33]So, like this it should get tallied.

[00:52:35]So, what is the balancing figure that you will write it in the higher gain?

[00:52:39]So, this is called total of four.

[00:52:43]Huh.

[00:52:44]>> [sighs] >> Like this.

[00:52:46]This two values will be getting carried.

[00:52:48]This value is called balancing figure.

[00:52:51]This 261,500 is balancing figure. So, BF. Okay? So, this is the way you need to calculate, ma. It will be difficult to understand, but when you will do the problem now you will easily understand. So, take a screenshot of the homework sum and let me know the final answers in the comment section. Here you need to prepare only profit and loss account. Here also this is also profit and loss account. This is the second sum.

[00:53:15]And uh This is the third sum. This three sums and whichever I have explained the sums, if this sums if you are practicing means definitely you will understand. You will attempt any kind of questions from unit number four. Clear? So, let me know in the comment section if you are having any still doubts. So, all the very best for your examination as well as your preparation, ma. See you all in next video, students. Bye-bye, everyone.