Frame : 6
Based on the Frame 5, i.e., after preparing Profit and Loss Account, prepare a Balance
Sheet with the following additional information.
Capital -- 1,60,000
Bank Loan -- 20,000
Creditors on open accounts -- 1,08,320
Outstanding Liabilities -- 7,174
Good will -- 60,000
Free hold works -- 50,0 00
Plant & Machinery -- 39,440
Fixtures and Fittings -- 18,960
Houses & Carts -- 10,330
Stock in Trade -- 59,260
Sundry Debtors -- 1,56,280
Reserve for doubtful debts -- 7,814
Expenses prepaid -- 980
Cash at Bank -- 15,080
Cash in hand -- 290Frame 7
Skills to Read Balance Sheet
The balance sheet given below will be discussed in groups and presentation made on key
points with reasons.
Khadi Udyog Balance Sheet
(This portion taken from the book ‘How to read Balance Sheet ‘ – an ILO Programme Book)
Liabilities Rs. Assets Rs.
Money Subscribed by
Shareholders
7,000Land, Buildings etc.,
21,000
Long Term Loan owed
to financial institution
16,000
Raw Materials etc.,
7,000
Bank over draft 5,000
Total TotalFocus will be on reading financial health of the organisation with reference to liquidity,
profitability, stability, credibility and activity ratios.