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Preparation of Profit and Loss Account
Problem No. 1
Prepare a Profit and Loss account of ABC Bank Ltd for the year ended 31.3.2018 from the following:
Particulars Rs. Rs.
Interest on Fixed Deposits 162410 
Rebate on Bills discounted 29000 
Interest on Loans 45000
Commission charged to Customers 62500
Establishment 15000 
Discount on Bills discounted 89000
Interest on Cash Credit 24000
Amount charged against Current Accounts 71500
Directors' Fees 10000 
Audit Fees 20000 
Postage and Telegram 2000 
Printing and Stationery 4000 
Rent and Taxes 22500 
Interest on Overdraft 71000
Sundry Charges 1500 
Interest on Savings Bank Deposits 57780 
Solution:
Profit and Loss Account for the Year ended 31.3.2018
Particulars Schedule Rs.
I. Income  
Interest Earned 13 271500
Other Income 14 62500
Total 334000
   
II. Expenditure  
Interest Expended 15 220190
Operating Expenses 16 75000
Total 295190
   
III. Profit and Loss  
Profit for the year 38810
   
IV. Appropriation  
Transfer to Statutory Reserve 9702.5
Balance to Balance Sheet 29107.5
  38810
Page 2


Preparation of Profit and Loss Account
Problem No. 1
Prepare a Profit and Loss account of ABC Bank Ltd for the year ended 31.3.2018 from the following:
Particulars Rs. Rs.
Interest on Fixed Deposits 162410 
Rebate on Bills discounted 29000 
Interest on Loans 45000
Commission charged to Customers 62500
Establishment 15000 
Discount on Bills discounted 89000
Interest on Cash Credit 24000
Amount charged against Current Accounts 71500
Directors' Fees 10000 
Audit Fees 20000 
Postage and Telegram 2000 
Printing and Stationery 4000 
Rent and Taxes 22500 
Interest on Overdraft 71000
Sundry Charges 1500 
Interest on Savings Bank Deposits 57780 
Solution:
Profit and Loss Account for the Year ended 31.3.2018
Particulars Schedule Rs.
I. Income  
Interest Earned 13 271500
Other Income 14 62500
Total 334000
   
II. Expenditure  
Interest Expended 15 220190
Operating Expenses 16 75000
Total 295190
   
III. Profit and Loss  
Profit for the year 38810
   
IV. Appropriation  
Transfer to Statutory Reserve 9702.5
Balance to Balance Sheet 29107.5
  38810
Schedule 13: Interest Earned Rs. Schedule 15: Interest Expended Rs.
Interest on Loan 45000 Interest paid on Fixed Deposits 162410
Interest on Cash Credit 24000 
Interest paid on Savings Bank 
Deposits 57780
Interest on Overdrafts 71000  220190
Discount on Bills discounted 89000   
Less: Rebate on Bills discounted -29000 
Schedule 16: Operating
Expenses Rs.
Amount charged against current 
Account 71500 Establishment Expenses 15000
 271500 Director Fees 10000
   Audit Fees 20000
Schedule 14: Other Income Rs. Rent and Taxed 22500
Commission charged to customer 62500 Postage and Telegrams 2000
   Printing and Stationery 4000
   Sundry Expenses 1500
    75000
Problem No. 2
The following financial data extracted from the books of Sri Krishna Bank Limited as on 31.3.2019:
Particulars Rs.
Interest on Fixed Deposits 36500
Rebate on Bills discounted 4800
Interest on Loans 34900
Commission charged to Customers 910
Office Expenses 15500
Discount on Bills discounted 19400
Interest on Cash Credit 22400
Directors' Fees 420
Postal Expenses 150
Printing and Stationery 390
Rent and Taxes 1800
Interest on Overdraft 12800
Other Expenses 180
Interest on Savings Bank Deposits 6900
Required: Prepare a Profit and Loss Account as on 31.3.2019
Solution:
Profit and Loss Account for the Year ended 31.3.2019
Particulars Schedule Rs.
I. Income  
Interest Earned 13 84700
Other Income 14 910
Total 85610
   
Page 3


Preparation of Profit and Loss Account
Problem No. 1
Prepare a Profit and Loss account of ABC Bank Ltd for the year ended 31.3.2018 from the following:
Particulars Rs. Rs.
Interest on Fixed Deposits 162410 
Rebate on Bills discounted 29000 
Interest on Loans 45000
Commission charged to Customers 62500
Establishment 15000 
Discount on Bills discounted 89000
Interest on Cash Credit 24000
Amount charged against Current Accounts 71500
Directors' Fees 10000 
Audit Fees 20000 
Postage and Telegram 2000 
Printing and Stationery 4000 
Rent and Taxes 22500 
Interest on Overdraft 71000
Sundry Charges 1500 
Interest on Savings Bank Deposits 57780 
Solution:
Profit and Loss Account for the Year ended 31.3.2018
Particulars Schedule Rs.
I. Income  
Interest Earned 13 271500
Other Income 14 62500
Total 334000
   
II. Expenditure  
Interest Expended 15 220190
Operating Expenses 16 75000
Total 295190
   
III. Profit and Loss  
Profit for the year 38810
   
IV. Appropriation  
Transfer to Statutory Reserve 9702.5
Balance to Balance Sheet 29107.5
  38810
Schedule 13: Interest Earned Rs. Schedule 15: Interest Expended Rs.
Interest on Loan 45000 Interest paid on Fixed Deposits 162410
Interest on Cash Credit 24000 
Interest paid on Savings Bank 
Deposits 57780
Interest on Overdrafts 71000  220190
Discount on Bills discounted 89000   
Less: Rebate on Bills discounted -29000 
Schedule 16: Operating
Expenses Rs.
Amount charged against current 
Account 71500 Establishment Expenses 15000
 271500 Director Fees 10000
   Audit Fees 20000
Schedule 14: Other Income Rs. Rent and Taxed 22500
Commission charged to customer 62500 Postage and Telegrams 2000
   Printing and Stationery 4000
   Sundry Expenses 1500
    75000
Problem No. 2
The following financial data extracted from the books of Sri Krishna Bank Limited as on 31.3.2019:
Particulars Rs.
Interest on Fixed Deposits 36500
Rebate on Bills discounted 4800
Interest on Loans 34900
Commission charged to Customers 910
Office Expenses 15500
Discount on Bills discounted 19400
Interest on Cash Credit 22400
Directors' Fees 420
Postal Expenses 150
Printing and Stationery 390
Rent and Taxes 1800
Interest on Overdraft 12800
Other Expenses 180
Interest on Savings Bank Deposits 6900
Required: Prepare a Profit and Loss Account as on 31.3.2019
Solution:
Profit and Loss Account for the Year ended 31.3.2019
Particulars Schedule Rs.
I. Income  
Interest Earned 13 84700
Other Income 14 910
Total 85610
   
II. Expenditure  
Interest Expended 15 43400
Operating Expenses 16 18440
Total 61840
   
III. Profit and Loss  
Profit for the year 23770
   
IV. Appropriation  
Transfer to Statutory Reserve 5942.5
Balance to Balance Sheet 17827.5
  23770
Schedule 13: Interest Earned Rs. Schedule 15: Interest Expended Rs.
Interest on Loan 34900 Interest paid on Fixed Deposits 36500
Interest on Cash Credit 22400 
Interest paid on Savings Bank 
Deposits 6900
Interest on Overdrafts 12800  43400
Discount on Bills discounted 19400   
Less: Rebate on Bills discounted -4800 Schedule 16: Operating Expenses Rs.
   Office Expenses 15500
 84700 Rent and Taxed 1800
   Director Remuneration 420
Schedule 14: Other Income Rs. Postal Expenses 150
Commission charged to customer 910 Printing and Stationery 390
   Other Expenses 180
     
    18440
Problem No. 3
The following financial data extracted from the books of Mysore Bank Limited as on 31.3.2019:
Particulars Rs.
Interest on Fixed Deposits 55000
Rebate on Bills discounted 9800
Interest on Loans 51800
Commission 1600
Depreciation on Bank Property 1000
Discount on Bills discounted 29200
Interest on Cash Credit 44600
Directors' Fees 600
Postage and Telegram 300
Printing and Stationery 600
Rent and Taxes 3600
Interest on Overdraft 30800
Sundry Expenses 400
Interest on Savings Bank Deposits 13600
Page 4


Preparation of Profit and Loss Account
Problem No. 1
Prepare a Profit and Loss account of ABC Bank Ltd for the year ended 31.3.2018 from the following:
Particulars Rs. Rs.
Interest on Fixed Deposits 162410 
Rebate on Bills discounted 29000 
Interest on Loans 45000
Commission charged to Customers 62500
Establishment 15000 
Discount on Bills discounted 89000
Interest on Cash Credit 24000
Amount charged against Current Accounts 71500
Directors' Fees 10000 
Audit Fees 20000 
Postage and Telegram 2000 
Printing and Stationery 4000 
Rent and Taxes 22500 
Interest on Overdraft 71000
Sundry Charges 1500 
Interest on Savings Bank Deposits 57780 
Solution:
Profit and Loss Account for the Year ended 31.3.2018
Particulars Schedule Rs.
I. Income  
Interest Earned 13 271500
Other Income 14 62500
Total 334000
   
II. Expenditure  
Interest Expended 15 220190
Operating Expenses 16 75000
Total 295190
   
III. Profit and Loss  
Profit for the year 38810
   
IV. Appropriation  
Transfer to Statutory Reserve 9702.5
Balance to Balance Sheet 29107.5
  38810
Schedule 13: Interest Earned Rs. Schedule 15: Interest Expended Rs.
Interest on Loan 45000 Interest paid on Fixed Deposits 162410
Interest on Cash Credit 24000 
Interest paid on Savings Bank 
Deposits 57780
Interest on Overdrafts 71000  220190
Discount on Bills discounted 89000   
Less: Rebate on Bills discounted -29000 
Schedule 16: Operating
Expenses Rs.
Amount charged against current 
Account 71500 Establishment Expenses 15000
 271500 Director Fees 10000
   Audit Fees 20000
Schedule 14: Other Income Rs. Rent and Taxed 22500
Commission charged to customer 62500 Postage and Telegrams 2000
   Printing and Stationery 4000
   Sundry Expenses 1500
    75000
Problem No. 2
The following financial data extracted from the books of Sri Krishna Bank Limited as on 31.3.2019:
Particulars Rs.
Interest on Fixed Deposits 36500
Rebate on Bills discounted 4800
Interest on Loans 34900
Commission charged to Customers 910
Office Expenses 15500
Discount on Bills discounted 19400
Interest on Cash Credit 22400
Directors' Fees 420
Postal Expenses 150
Printing and Stationery 390
Rent and Taxes 1800
Interest on Overdraft 12800
Other Expenses 180
Interest on Savings Bank Deposits 6900
Required: Prepare a Profit and Loss Account as on 31.3.2019
Solution:
Profit and Loss Account for the Year ended 31.3.2019
Particulars Schedule Rs.
I. Income  
Interest Earned 13 84700
Other Income 14 910
Total 85610
   
II. Expenditure  
Interest Expended 15 43400
Operating Expenses 16 18440
Total 61840
   
III. Profit and Loss  
Profit for the year 23770
   
IV. Appropriation  
Transfer to Statutory Reserve 5942.5
Balance to Balance Sheet 17827.5
  23770
Schedule 13: Interest Earned Rs. Schedule 15: Interest Expended Rs.
Interest on Loan 34900 Interest paid on Fixed Deposits 36500
Interest on Cash Credit 22400 
Interest paid on Savings Bank 
Deposits 6900
Interest on Overdrafts 12800  43400
Discount on Bills discounted 19400   
Less: Rebate on Bills discounted -4800 Schedule 16: Operating Expenses Rs.
   Office Expenses 15500
 84700 Rent and Taxed 1800
   Director Remuneration 420
Schedule 14: Other Income Rs. Postal Expenses 150
Commission charged to customer 910 Printing and Stationery 390
   Other Expenses 180
     
    18440
Problem No. 3
The following financial data extracted from the books of Mysore Bank Limited as on 31.3.2019:
Particulars Rs.
Interest on Fixed Deposits 55000
Rebate on Bills discounted 9800
Interest on Loans 51800
Commission 1600
Depreciation on Bank Property 1000
Discount on Bills discounted 29200
Interest on Cash Credit 44600
Directors' Fees 600
Postage and Telegram 300
Printing and Stationery 600
Rent and Taxes 3600
Interest on Overdraft 30800
Sundry Expenses 400
Interest on Savings Bank Deposits 13600
Interest on Current Accounts 8400
Locker Rent 200
Salaries and Allowances 10800
Auditor's Fees 200
Transfer Fees 100
Required: Prepare a Profit and Loss Account as on 31.3.2019
Solution:
Profit and Loss Account for the Year ended 31.3.20
Particulars Schedule Rs.
I. Income  
Interest Earned 13 155000
Other Income 14 1800
Total 156800
   
II. Expenditure  
Interest Expended 15 68600
Operating Expenses 16 17600
Provision and Contingencies  
Total 86200
   
III. Profit and Loss  
Profit for the year 70600
   
IV. Appropriation  
Transfer to Statutory Reserve 17650
Balance to Balance Sheet 52950
  70600
Schedule 13: Interest Earned Rs. Schedule 15: Interest Expended Rs.
Interest on Loan 51800 Interest paid on Fixed Deposits 55000
Interest on Cash Credit 44600 Interest paid on Savings Bank Deposits 13600
Interest on Overdrafts 30800  68600
Discount on Bills discounted 29200   
Less: Rebate on Bills discounted -9800 Schedule 16: Operating Expenses Rs.
Interest on Current Accounts 8400 Salaries and Allowances 10800
 
15500
0 Rent and Taxed 3600
   Director's Fees 600
Schedule 14: Other Income Rs. Auditor's Fees 200
Commission received 1600 Postage and Telegram 300
Locker rent 200 Printing & Stationery 600
 1800 Transfer Fees 100
   Depreciation on Bank Property 1000
   Sundry Charges 400
    17600
Page 5


Preparation of Profit and Loss Account
Problem No. 1
Prepare a Profit and Loss account of ABC Bank Ltd for the year ended 31.3.2018 from the following:
Particulars Rs. Rs.
Interest on Fixed Deposits 162410 
Rebate on Bills discounted 29000 
Interest on Loans 45000
Commission charged to Customers 62500
Establishment 15000 
Discount on Bills discounted 89000
Interest on Cash Credit 24000
Amount charged against Current Accounts 71500
Directors' Fees 10000 
Audit Fees 20000 
Postage and Telegram 2000 
Printing and Stationery 4000 
Rent and Taxes 22500 
Interest on Overdraft 71000
Sundry Charges 1500 
Interest on Savings Bank Deposits 57780 
Solution:
Profit and Loss Account for the Year ended 31.3.2018
Particulars Schedule Rs.
I. Income  
Interest Earned 13 271500
Other Income 14 62500
Total 334000
   
II. Expenditure  
Interest Expended 15 220190
Operating Expenses 16 75000
Total 295190
   
III. Profit and Loss  
Profit for the year 38810
   
IV. Appropriation  
Transfer to Statutory Reserve 9702.5
Balance to Balance Sheet 29107.5
  38810
Schedule 13: Interest Earned Rs. Schedule 15: Interest Expended Rs.
Interest on Loan 45000 Interest paid on Fixed Deposits 162410
Interest on Cash Credit 24000 
Interest paid on Savings Bank 
Deposits 57780
Interest on Overdrafts 71000  220190
Discount on Bills discounted 89000   
Less: Rebate on Bills discounted -29000 
Schedule 16: Operating
Expenses Rs.
Amount charged against current 
Account 71500 Establishment Expenses 15000
 271500 Director Fees 10000
   Audit Fees 20000
Schedule 14: Other Income Rs. Rent and Taxed 22500
Commission charged to customer 62500 Postage and Telegrams 2000
   Printing and Stationery 4000
   Sundry Expenses 1500
    75000
Problem No. 2
The following financial data extracted from the books of Sri Krishna Bank Limited as on 31.3.2019:
Particulars Rs.
Interest on Fixed Deposits 36500
Rebate on Bills discounted 4800
Interest on Loans 34900
Commission charged to Customers 910
Office Expenses 15500
Discount on Bills discounted 19400
Interest on Cash Credit 22400
Directors' Fees 420
Postal Expenses 150
Printing and Stationery 390
Rent and Taxes 1800
Interest on Overdraft 12800
Other Expenses 180
Interest on Savings Bank Deposits 6900
Required: Prepare a Profit and Loss Account as on 31.3.2019
Solution:
Profit and Loss Account for the Year ended 31.3.2019
Particulars Schedule Rs.
I. Income  
Interest Earned 13 84700
Other Income 14 910
Total 85610
   
II. Expenditure  
Interest Expended 15 43400
Operating Expenses 16 18440
Total 61840
   
III. Profit and Loss  
Profit for the year 23770
   
IV. Appropriation  
Transfer to Statutory Reserve 5942.5
Balance to Balance Sheet 17827.5
  23770
Schedule 13: Interest Earned Rs. Schedule 15: Interest Expended Rs.
Interest on Loan 34900 Interest paid on Fixed Deposits 36500
Interest on Cash Credit 22400 
Interest paid on Savings Bank 
Deposits 6900
Interest on Overdrafts 12800  43400
Discount on Bills discounted 19400   
Less: Rebate on Bills discounted -4800 Schedule 16: Operating Expenses Rs.
   Office Expenses 15500
 84700 Rent and Taxed 1800
   Director Remuneration 420
Schedule 14: Other Income Rs. Postal Expenses 150
Commission charged to customer 910 Printing and Stationery 390
   Other Expenses 180
     
    18440
Problem No. 3
The following financial data extracted from the books of Mysore Bank Limited as on 31.3.2019:
Particulars Rs.
Interest on Fixed Deposits 55000
Rebate on Bills discounted 9800
Interest on Loans 51800
Commission 1600
Depreciation on Bank Property 1000
Discount on Bills discounted 29200
Interest on Cash Credit 44600
Directors' Fees 600
Postage and Telegram 300
Printing and Stationery 600
Rent and Taxes 3600
Interest on Overdraft 30800
Sundry Expenses 400
Interest on Savings Bank Deposits 13600
Interest on Current Accounts 8400
Locker Rent 200
Salaries and Allowances 10800
Auditor's Fees 200
Transfer Fees 100
Required: Prepare a Profit and Loss Account as on 31.3.2019
Solution:
Profit and Loss Account for the Year ended 31.3.20
Particulars Schedule Rs.
I. Income  
Interest Earned 13 155000
Other Income 14 1800
Total 156800
   
II. Expenditure  
Interest Expended 15 68600
Operating Expenses 16 17600
Provision and Contingencies  
Total 86200
   
III. Profit and Loss  
Profit for the year 70600
   
IV. Appropriation  
Transfer to Statutory Reserve 17650
Balance to Balance Sheet 52950
  70600
Schedule 13: Interest Earned Rs. Schedule 15: Interest Expended Rs.
Interest on Loan 51800 Interest paid on Fixed Deposits 55000
Interest on Cash Credit 44600 Interest paid on Savings Bank Deposits 13600
Interest on Overdrafts 30800  68600
Discount on Bills discounted 29200   
Less: Rebate on Bills discounted -9800 Schedule 16: Operating Expenses Rs.
Interest on Current Accounts 8400 Salaries and Allowances 10800
 
15500
0 Rent and Taxed 3600
   Director's Fees 600
Schedule 14: Other Income Rs. Auditor's Fees 200
Commission received 1600 Postage and Telegram 300
Locker rent 200 Printing & Stationery 600
 1800 Transfer Fees 100
   Depreciation on Bank Property 1000
   Sundry Charges 400
    17600
Problem No.4
From the following information, prepare Profit and Loss Account of Yes Bank Ltd. for the year ended      
31-3-2019
Particulars Rs. in Crores
Interest on Loans 2590
Interest on Fixed Deposits 2750
Commission 82
Rebate on Bills Discounted 490
Salaries and Allowances 540
Discount on Bills Discounted 1850
Interest on Cash Credit 2230
Depreciation on Bank's Property 400
Rent and Rates 180
Interest on Overdraft 1540
Director's Fees 30
Audit Fees 50
Interest on Savings Deposits 680
Postage 14
Printing and Stationery 29
Sundry Expenses 15
Additional Information:
Bad debts to be written off amounted to Rs.380. Provision for Taxation may be made at 35%. 
Transfer 20% of profits to Statutory Reserve and provide Rs.3 for dividends.
Solution
Profit and Loss Account for the Year ended 31.3.20
Particulars Schedule Rs.
I. Income  
Interest Earned 13 7720
Other Income 14 82
Total 7802
   
II. Expenditure  
Interest Expended 15 3430
Operating Expenses 16 1258
Provision and Contingencies 1470
Total 6158
   
III. Profit and Loss  
Profit for the year 1644
   
IV. Appropriation  
Transfer to Statutory Reserve 411
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