Mutual Engineers Ltd. have authorised capital of Rs.50 lakhs, divided into 5,00,000 equity shares of Rs.10 each. Their books show the following balances as on 3 1.3.2011:
|
Rs |
|
Rs |
Stock 1.4.2010 |
6,65,000 |
Bank current account |
20,000 |
Discount and rebates |
30,000 |
Cash in hand |
8,000 |
Carriage inwards |
57,500 |
Debenture interest |
|
Patterns |
3,75,000 |
(for ½ year to 30.9.2010) |
20,000 |
Rates, taxes and insurance |
55,000 |
Interest banks (Dr.) |
91,000 |
Furniture and fixtures |
1,50,000 |
Preliminary expenses |
10,000 |
Materials purchased |
12,32,500 |
Calls in arrears |
10,000 |
Wages |
13,05,000 |
Equity share capital |
|
Coal and coke |
63,000 |
(2,00,000 share of |
|
Freehold land |
12,50,000 |
10 each) |
20,00,000 |
Plant and machinery |
7,50,000 |
8% Debentures |
5,00,000 |
Engineering tools |
1,50,000 |
Bank overdraft |
7,57,000 |
Goodwill |
3,75,000 |
Sundry creditors (for goods) |
2,40,500 |
Sundry debtors |
2,66,000 |
Sales |
36,17,000 |
Bills receivable |
1,34,500 |
Rents (Cr.) |
30,000 |
Advertisement |
15,000 |
Transfer fees |
6,500 |
Commission and brokerage |
67,500 |
Profit and Loss A/c (Cr.) |
67,000 |
Business expenses |
56,000 |
|
|
Repairs |
46,500 |
|
|
Bad debts |
25,500 |
|
|
The stock (valued at cost or market value whichever is lower) as on 31.3.2011 was Rs.7,08,000. Outstanding liability for wages Rs.25,000 and business expenses Rs.25,000.
Dividend declared @ 8% on paid up capital.
To charge depreciation: Plant and Machinery @ 15% Engineering Tools @ 20%, Patterns @ 10% and furniture and fixture @ 10%. Provide 2% on debtors as doubtful debts after writing off Rs.21,500 as bad debts. Write off preliminary expenses Rs.5,000 and create Debenture Redemption Reserve Rs.50,000. Provide Rs.1,30,000 for income tax.
Prepare Profit and Loss Account for the year ended 31.3.2011 and Balance Sheet, as on that date, in accordance with the Companies Act, 1956, giving as much information as necessary. Ignore previous year‘s figures.