The following balances have been extracted from the books of Arts and Crafts Limited as on 31st March, 2011:
Rs |
Rs |
||
Freehold land |
28,000 |
Income from Investment |
1,200 |
Buildings |
7,500 |
Provision for doubtful |
|
Furniture |
2,000 |
debts (1st April, 2010) |
200 |
Debtors |
10,000 |
Creditors |
2,000 |
Stock (31st March, 2011) |
4,000 |
Provision for depreciation: |
|
Cash at bank |
500 |
(1st April, 2010) |
|
Cash in hand |
100 |
Building |
500 |
Cost of goods sold |
30,000 |
Furniture |
400 |
Salaries and wages |
1,500 |
Suspense |
250 |
Miscellaneous expenses |
800 |
Equity shares capital |
36,750 |
Investment in shares |
18,000 |
6% Cumulative pref. share |
|
Interest |
300 |
Capital |
8,000 |
Bad debts |
100 |
Securities Premium |
1,000 |
Repairs and maintenance |
150 |
Bank Overdraft |
5,000 |
Advance payment of Income tax |
600 |
Sales |
48,000 |
Profit and Loss A/c (1st April, 2010) |
250 |
||
1,03,550 |
1,03,550 |
The following further particulars are available:
(1) The land was revalued on 1st January, 2011 at Rs.3, 50, 00,000 by an expert valuer, but no effect has been given in the books although the Directors have decided to adjust the relevant amount.
(2) Provision for doubtful debt is to be adjusted to 2.5% on the amount of debtors.
(3) Equity share capital is composed of Rs.10 shares, 36,40,000 fully paid and 50,000 on which final call of Rs.3 remains unpaid.
(4) Suspense amount represents money received from the new allottee for reissue of 50,000 shares forfeited during the year for non payment of the final call, but no entry for adjustment thereof has been passed.
(5) Provision for taxation is to be made at 40%.
(6) Market value of investments was Rs.1,85,00,000 on 31st March, 2011.
(7) The company is managed by the Directors who are entitled to a remuneration of 3% on the annual net profits.
(8) Depreciation to be charged on written down value of:
Building at 5%.
Furniture at 10%.
(9) The land and buildings of the company are mortgaged in favour of the bank as security for overdraft sanctioned up to a limit of 2,50,00,000.
(10) Dividend on cumulative preference shares were in arrears for 5 years upto 31st March, 2011. The directors have recommended payment of dividend for two years.
You are required to prepare the Profit and Loss Account for the year ended 31st March, 2011 and a Balance Sheet as on that date. Ignore previous year‘s figures.