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Mlustration 24 :(Preparation of profit and loss Saraswati Bank Ltd. as at 31.3.2018.

from the books of
The following figures are extracted Loss Account with necessary
schedules.
required to prepare the Profit and (R in '000)
YOu are
Particulars 3,10,000
Interest on Loans 2,90,000
Interest on Cash Credits 2,00,000
Interest on Overdrafts 40,000
Interest on Balances with RBI 10,000
Interest on Investments 2,60,000
Interest on Fixed Deposits 80,000
Interest on Savings Accounts 30,000
Interest on Current Accounts
1,90,000
Discount Bills Discounted
10,000
Interest on Borrowings from other Banks 40,000
Profit on Sale of Investment
Loss on Sale off Investment
5,000
25.000
Income from Joint Ventures
35,000
Profit on Revaluation of Investments 10.000
Loss on Revaluation of Investments
25,000
Dividends received form Joint Stock Companies
Salaries to Staff 65,000
Rent and Taxes 8,000
Depreciation on Bank's Assets 21,000
Sundry Income 18,000
Printing and Stationery 17,000
Repairs and Maintenance 14,000
Advertisement 6,000
Directors Fees and Allowances 9,000
Audit Fees 6,000
Law Charges 8,000
Postage and Telephone Charges 11,000
Other Expen ses 4,000
Profit on 1.4.2017 1,20,000
Adjustmnents :
1. Write off? 19,000 for Bad and Doubtful Debts.
2. Provide 40% for taxation.
3. Rebate on bill discounted is to be provided for 20,000.
Ilustration 25 : (Dividend recommended)
The following are the figures extracted from the books of New Generation Bank Limited as on
31.03.2018.
Interest and Dscount received 37,05,738
Interest paid on deposits 20,37,452
Issued and Subscribed Capital 10,00,000
Salaries and allowances 2,00,000
Directors fee and allowances 30,000
Rent and Taxes paid 90,000
Postage and Telegrams 60,286
Statutory Reserve Fund 8,00,000
Commission, Exchange and Brokerage 1,90,000
Rent Received 65,000
Profit on Sale of Investments 2,00,000
Depreciation on Bank'sProperties 30,000
Statutory Expenses 40,000
Preliminary Expenses 25,000
Auditor's Fess S.000
The following further information is given :
i) Acustomer to whom a sum of ? 10 lakhs has been advanced has become insolvent and it is
expected only 50% can be recovered from his estate.
ii) There were also other debts for which a provision of ? 1,50,000 was found
auditors.
necessary by the
iii) Rebate on Bills discounted on 31.03.2017 was 12,000 and on 31.03.2018 was 16,000.
iv) Provide 6,50,000 for Income-tax.
V) The Directors desire to declare 10% dividend.
Required : Prepare the Profit and Loss account of New Generation Bank Limited for theyear ended
31.03.2018and also show, how the Profit and Loss account will appear in the Balance Sheet, if the
Loss account opening balance was Nil as on 31.03.2017. Profit and
 (Preparation oj proji and
following intformation, prepare Profit and Loss Account of the New Bank L
I5. From the
ended 31.3.2018.
4,30,000
Interest paid on deposits 4,50,000
Interest on loarns 1,50,000
Commission received 15,000
Advertising 32,000
Printing and Stationery 1,20,000
Exchange 2,40,000
Interest on borrowings 2,10,000
Interest on Overdrafts
1,20,000
Salaries &allowances to employees other than Managing Director 3,10,000
Interest on cash credits
Managing Director's salaries and allowances 48,000
Director's and local committee member's fees and allowances 30,000
Discounts on bills discounted 3,80,000
Brokerage 1,00,000
Lockers rent 3,000
Provident Fund contribution 12,000
Rent, Taxes, Insurance, Lighting, etc. 50,000
Law charges 5,000
Repairs to Bank property 4,000
Transfer fees 1,000
Auditor's fees 12,000
Depreciation on bank property 10,000
Postage and Telegrams 4,000
Loss on sale of Government Securities 3,000
Additional Information :
a) Provide 80,000 for taxation.
b) Rebate on bills discounted on 31.3.2015 10,000.
[Ans. Net Profit ? 6,19,000]
(Provisioning)
16 From the following information prepare the Profit and Loss
vear ended 31" March, 2018. Also give necessary Schedules. Account Jawahar Bank Limited for the
of

Figuresare in
Interest earned on term loans ? thousands
Interest earned on term loans classified as NPA 17.26
4.52
Al 4vvuntsof Banking Companies
Intcrcs rcccivecdI on term loans classified as NPA 87
Intercst onn cash credits and overdrafts
carned but not received on 2.04
Interesl cash credit and overdraft 38.54
Interest on deposits treated as NPA
Commission
8.39
27.20
Profit on sale of investments 1.97
Doti on revaluation of investments 11.76
lncome from investments
2.76
Salarics, bonus and allowances 15.53
Rent. taxes and lighting 18.75
Printing and stationary 1.70
Director's fees, allowances expenses 0.75
Law charges 1.33
Repairs and maintenance 0.22
Insurance 0.18
other Information: 0.30
Make necessary provision on risk assets :
i) Sub-standard
ii) Doubtful for one year 15.00
iii) Doubtful for two year 7.00
iv) Loss assets 2.40
Investments 0.65
Bank should not keep more than 25% of its 3700
investments as held-for-maturity investment. The market
value of its best 75% investments is R 9,010,000 as on 31"
IAns. Net Loss ? 1854.09 thousds provision for NPA 5.61March, 2018.
(Balance sheet and Profit and Loss Alc)
thousands]
17. From the following Ledger balances of
and Loss account and Balance Sheet.
"Dhanvanti Bank Limited" as on 31.3.2018, prepare the Profit
Particulars
Particulars
Interest and Discount 65,000 Investments 3,10,000
Loans, Overdraft and Interest Accrued and Paid
Cash Credit 20,000
7,00,000 Fixed Deposits 65,000
Bills Discounted & purchased 50,000 Savings Deposits 3,55,000
Share Capital Current Accounts 7,75,000
(1000 Equity Shares of Money at Call & Short Notice 48,000
7 100each, ? 50/- paid) 50,000 Borrowed from Banks 96,000
Statutory Reserve 30,000 Cash in hand 15,000
Profit & Loss A/c (Cr.) Cash at
(as on 1.4.2017) 26,000 Reserve Bank of India 1,41,000
Bills for Collection 14,000 Cash at other Banks 1,04,000
Non-Banking Assets 24,000 Premises
Bills Payable 80,000 (after? 10,000 depre
Unclaimed Dividends 1,000 ciation upto 31.3.2017) 1,20,000
Sundry Creditors 5,000 Dividend for 2016-17 5,000
Acceptances on behalf of General Expenses 1,000
20,000 Rent, Rates & Lighting 2,000
customers
Payment to Employees 8,000
Rebate on Bills Discounted amounted to 500/-. Provide 5% depreciation on original cost of Premises.
Provide 5,000/- for Doubtful Debts.
Sheet Total 15,05,500)
[Ans. Net Profit 22.000, Balance cld to Balance Sheet 38,600, Balance
(Profit and Loss Alc and Balance sheet)
as on 31.3.2018 are furnished to you. Prepare the