Model: P &L appropriation A/c M/s Yogan Ltd had Rs.40, 00,000 profit on 31 March 2011 after making provision for depreciation and taxation Rs.2,10,000. Profit was brought forward from last year following recommendations made by the directors of the company to appropriate the profits:
- To transfer to general reserve: Rs.10,25,000
- To pay Rs.1,45,000 as ex-gratia bonus to employee of the company
- To declare dividend @ 5% on equity shares
- To transfer Rs.80,000 to staff gratuity reserve
- To transfer Rs.95,000 to development rebate reserve
- To transfer Rs.1, 20,000 to deferred taxation reserve
The company’s capital consisted of 20,000 equity shares of each fully paid. For the year ended 31 March 2011, the directors transferred Rs.90,000 to dividend equalization reserve and Rs.75,000 to debenture redemption fund. You are required to prepare profit and loss appropriation A/c.