Financial Statements of Banks and Financial Institutions
Part-2
1. Following Facts have been extracted from the record of Adarsha Bank Limited in respect
of the year ending Ashadh 32, 2075
On 1-4-2074 Bills for collection were Rs. 9,00,000. During 2074/075 bill received for
collection amounted to Rs. 54,00,000, bills collected were Rs. 49,00,000 and bills
dishonoured and returned were Rs. 7,50,000.
Required:
Prepare Bills for Collection (Assets A/c) and Bills for Collection (Liability) A/c.
2. The following is an extract from the Trial Balance of Krishi Bikas Bank Ltd. as at 31st
March 2011:
Rebate on Bills discounted as on 01-04-2010 3,41,295 (Cr)
Discount Received during the year 8,50,780 (Cr)
Analysis of the bills discounted reveal as follows:
Amount (Rs) Due Date
14,00,000 June 1, 2011
43,60,000 June 8, 2011
28,20,000 June 21, 2011
40,60,000 July 1, 2011
30,00,000 July 5, 2011
You are required to find out the amount of discount to be credited to Profit and Loss
account for the year ending 31st March, 2011 and pass Journal Entries. The rate of
discount may be taken at 10% per annum.
3. Following facts have been extracted from the record of Adarsha Bank Ltd. in respect of
the year ending Ashadh 32, 2067:
On 1-4-2066 Bills for collection were Rs. 700,000. During 2066/067 bill received for
collection amounted to Rs. 6,450,000, bills collected were Rs. 4,700,000 and bills
dishonoured and returned were Rs. 550,500.
Required:
Prepare Bills for Collection (Assets) A/C and Bills for Collection (Liability) A/C.
FCA Navaraj Lamichhane Financial Statements of BFIs
MBS CAP-II Dec, 2020
4. Following are the extracts from the record of Alpha Bank Ltd. in respect of the year
ending Ashadh 31, 2069:
On Shrawan 01, 2068; bills for collection were Rs. 400,000. During 2068-069 bill received
for collection amounted to Rs. 6,050,000, bills collected were Rs. 4,500,000 and bills
dishonored and returned were Rs. 300,000.
Prepare bills for collection (Assets) account and bills for collection (Liability) account.
5. The details of bills discounted in case of a bank are as under:
Amount Rs. Due Date Rate of Discount
2,00,000 4th June, 2000 12½%
5,50,000 12th June, 2000 12½%
3,20,000 30th June, 2000 12½%
4,50,000 9th July, 2000 15%
Calculate the rebate on bills discounted for the year ending 31st March, 2000.
Unexpired rebate on 31st March, 1999 was Rs. 40,000. Discount received during the year
was Rs. 1,35,000. Find out the discount to be credited to Profit and Loss Account and give
the necessary Journal entries.
6. Following balances are extracted from records of a Commercial Bank Limited.
Loan Categories Balances
Pass 161,528
Watchlist 245,980
Restructured/ Rescheduled 59,871
Substandard 12,340
Doubtful 1,780
Loss 4,596
Total 486,095
From above information, find out the amount of loan loss provisions that should be
disclosed in Financial Statements of the Bank.
7. Following balances relating to loan and advances are extracted from records of a ‘A’ class
Commercial Bank.
Amount in lakhs Insured Amount Other Amount Total Amount
Categories of
Loan
Pass 3,335 161,528 164,863
Watchlist 4,370 22,976 27,346
Restructured/Resc 775 4,464 5,239
heduled
Substandard 138 706 844
Doubtful 217 1,927 2,144
FCA Navaraj Lamichhane Financial Statements of BFIs
MBS CAP-II Dec, 2020
Loss 662 3,539 4,201
Total 9,497 195,140 204,637
While scrutinizing the records of the bank, it was found that the bank has provided a credit
of Rs. 5,560 lakhs in excess of SOL. The bank has categorized this loan as Pass. Find out
the amount of loan loss provisions as per NRB Directives.
8. BN Bank Limited provides you the following information regarding Loan Loss
provisioning as on 31st Ashadh 2069:
Category Amount Rs.
1. Good 5000,000
2. Rescheduled /Restructured 210,000
3. Substandard 500,000
4. Doubtful 300,000
5. Bad 500,000
During financial year 2069-70 additional loans amounting to Rs. 3,000,000 were disbursed.
The Bad loans amounting to Rs. 200,000 was written off during the year. Loans amounting
to Rs. 150,000 were shifted from Doubtful category to Bad category. Similarly, Loans
amounting to Rs. 500,000 shifted from Good category to substandard category and
Substandard Loans amounting to Rs. 200,000 were rescheduled during the year.
From the above information, you are required to calculate the loan loss provision and pass
necessary journal entries in the books of BN Bank Limited as per the directive issued by
Nepal Rastra Bank and find the percentage of total Non-Performing assets.
9. Find out the income to be recognized in the case of Good Faith Bank Limited for the year
ended 31st Ashadh, 2067 as per the directives issued by NRB.
(Rs. in Lakhs)
Performing Assets Non-performing Assets
Interest accrued Realized in Interest Realized in
cash accrued cash
Term Loans 540 400 450 20
Consumer Loan 250 205 360 16
10. Following is the information related to loan loss provisions (LLP) of Big Bank Ltd. as on
32.03.2075.
Classification LLP (in lakhs)
Pass loan 2,500
Watchlist 500
Re-scheduled 350
Sub-standard 150
Doubtful 400
Bad 1,000
FCA Navaraj Lamichhane Financial Statements of BFIs
MBS CAP-II Dec, 2020
Sub-standard loan is fully insured with DCG Fund. Find out the level of Non-Performing
Loan (NPL) as on 32.03.2075 of the banks.
11. Following information as at second quarter ending 2071 were drawn from the records of
Shivam Bank Limited as under:
Loans outstanding for: Amount (Rs.)
Up to 3 months 1,868,420
More than 3 months but not more than 6 months 11,720
More than 6 months but not more than 12 months 262
More than 12 months 2,032
Total 1,882,434
Following additional information relating to previous quarter ending were extracted from
the records of the bank:
Paid up equity share capital 161,016
Statutory general reserve 163,632
Retained earnings 96,657
General loan loss provisions 18,497
Exchange equalization reserve 25,919
Un-audited current year cumulative profit 33,185
Deferred revenue expenses 2,668
The bank is in the process of preparing the documents for quarterly reporting. As a reporting
and compliance officer of the bank you are required to calculate movement in loan loss
provision amount. The bank has also provided a Term loan of Rs. 125,000 to a Party during
the period under review.
12. Following information as at second quarter ending 2073 were drawn from the records of
Minamma Bank Limited as under:
Loan outstanding for Amount (Rs.)
Up to 3 months 1,673,000
More than 3 months but not more than 6 months 13,612
More than 6 months but not more than 12 months 782
More than 12 months 2,198
Total 1,689,592
The bank has not restructured or rescheduled any of its credit.
FCA Navaraj Lamichhane Financial Statements of BFIs
MBS CAP-II Dec, 2020
Following additional information relating to previous quarter ending were extracted from
the records of the bank:
Particulars Amount (Rs.)
Paid up equity share capital 171,010
Statutory general reserve 155,432
Retained earnings 87,886
General loan loss provision 16,983
Exchange equalization reserve 22,313
Un-audited current year cumulative profit 31,991
Deferred revenue expenses 2,884
The bank is in the process of preparing the documents for quarterly reporting. The bank has
also provided a term loan of Rs. 145,000 to a single party during the period under review.
As a reporting and compliance officer of the bank you are required to calculate movement
in loan loss provision amount.
13. The following trial balance was extracted from the books of Paschimanchal Bank
Limited, as on March 31,2004.
Particulars Dr Cr
Share Capital 3,00,000
Cash in hand and with NRB 46,350
Investments in Govt. Bonds 1,94,370
Other investments 1,55,630
Gold Bullion 15,130
Interest accrued on investments 24,620
Security deposits of employees 15,000
Saving account balances 7,420
Current ledger control account 97,000
Fixed deposits 23,050
Share Premium account 90,000
Statutory reserves 1,40,000
Silver Bullion 2,000
Constituent liability for acceptance and 56,500
endorsement
Buildings 65,000
Furniture 5,000
Borrowing from banks 77,230
Money at call and short notice 26,000
Advances 2,21,000
Profit and loss Account 6,500
Loan loss provision for advances 21000
Loan loss provision for bills purchased 100
Bills discounted and purchased 12,600
Bills for collection 43,500
Acceptance and endorsements 56,500
Interest 7,950 72,000
Commissions and Brokerage 25,300
Discounts 42,000
Bills receivable being bills for collection 43,500
FCA Navaraj Lamichhane Financial Statements of BFIs
MBS CAP-II Dec, 2020
Audit fees 5,000
Loss on sale of furniture 1,000
Director’s fees 1,200
Salaries 21,200
Postage 50
Rent 600
Profit on bullion 1,200
Managing director’s remuneration 12,000
Miscellaneous income 2,700
Loss on sale of investments 30,000
Deposits with other banks 75,000
Branch adjustments 20,000
Depreciation 20,000 20,000
provisions on
building
Total 10,41,100 10,41,100
The following further information is furnished to you:
(a) Provide rebate on bills discounted Rs. 5,000.
(b) A scrutiny of current account ledger reveals that there are accounts overdrawn to the
extent of Rs. 25,000 and the total of the credit balance is Rs. 1,22,000.
(c) Claims by employees for bonus amounting to Rs. 15,000 is pending award of
arbitration.
(d) Depreciation on building for the year is calculated at Rs.5, 000.
(e) It is proposed to transfer 20% to general reserves.
(f) The directors have decided to propose a dividend of 8% for the current year.
(g) Provide for Staff Bonus as per provisions of Bonus Act and Income Tax @ 30%
(h) Details of Loans and Advances and Bills purchased are as follows:
Category of loans Amount Opening
Pass 1,76,000 1,000
Substandard 35.000 8,000
Doubtful 25,000 10,000
Loss 10,000 2,000
Bills Purchased and discounted are categories as Pass Loan. Provide for loan loss as per
Directive 2 of the Unified Directives Issued by NRB.
You are required to prepare the Balance sheet as on March 31, 2004 and a Profit and Loss
Account for the year ending as on that date, together with the necessary schedules and
workings.
FCA Navaraj Lamichhane Financial Statements of BFIs
MBS CAP-II Dec, 2020
14. The following balances pertaining to Vijaya Bank Limited are presented to you. You are
required to prepare the Profit and Loss Account of the bank for the year ended on March
31, 2002. (All working should form part of your answer)
Rs. 000
Interest on loans 300
Interest on fixed deposits 275
Commission 10
Exchange and brokerage 20
Salaries and allowances 150
Discount on bills (gross) 152
Interest on cash credits 240
Interest on temporary overdrafts in current account 30
Interest on saving bank deposits 87
Postage, telegram and stamps 10
Printing and stationery 20
Sundry expenses 10
Rent 15
Taxes and license renewals 10
Audit fees 10
Additional Information:
xvi. Additional
Rebate information:
on bills discounted 30
Salary of managing director 30
Bad debts 40
Provision for income tax is to be made @33%(round off to the nearest
thousand)
Interest of Rs. 4,000 on doubtful debts was wrongly credited to interest on
loans account
15. Following Balances are extracted from the records of SBI Bank Limited as on 31st Ashoj
2068. From the below mentioned information, compute the statutory liquidity ratio and
excess or short fall amount maintained by the bank for the month ended 31st Ashoj 2068.
Particulars Amount
Cash Balance 348
Balance with NRB for CRR 2,460
Balance with other banks 3,149
Investment and Foreign Banks 5,640
Govt. Securities 2,655
Nepal Rastra Bank Bonds 206
Inter Bank Lending 456
Borrowings 4,879
Current and Call Deposits 4,139
Saving Deposits 14,522
Fixed Deposits 23,594
Other Liabilities 3,590
Capital, Reserve and Surplus 6,866
FCA Navaraj Lamichhane Financial Statements of BFIs
MBS CAP-II Dec, 2020
FCA Navaraj Lamichhane Financial Statements of BFIs
MBS CAP-II Dec, 2020
