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INTERMEDIATE (IPC) EXAMINATION: MAY, 2016

Debtors
Bank

2,50,000 Interest on Investments

60,000 Unclaimed dividend
24,36,000

24,000
10,000
24,36,000

You are required to prepare statement of Profit and Loss for the year ending 31 st March,
2015 and Balance sheet as at that date after taking into consideration the following
information:
(a) Closing stock is more than opening stock by ` 1,60,000;
(b) Provide to doubtful debts @ 4% on Debtors
(c) Make a provision for income tax @30%.
(d) Depreciation expense included depreciation of ` 16,000 on Building and that of
` 24,000 on Machinery.
(e) The directors recommend a dividend @ 25% and transfer to General Reserve @
10%.
(f)
2.

Bills Discounted but not yet matured ` 20,000.

The summarized Balance Sheet of Priya Ltd. is given below:

(` in 000)
Liabilities

31.3.14 31.3.15 Assets

31.3.14 31.3.15

Share capital

500

500 Land & building

300

300

9% Debentures

200

160 Machinery (at cost)

164

180

Trade payables

230

216 Inventory

200

228

432

352

120
4

110
6

1,220

1,176

Profit and Loss A/c

Depreciation fund
Contingency reserve
Outstanding expenses

40

54 Trade receivables

80
140
30
1,220

88 Cash and bank balances

110 Pre-paid expenses
48
1,176

The following information is furnished:

(i)

One old machinery which has original cost of ` 30,000 was sold for ` 10,000 in
2014-15. The accumulated depreciation in respect of the said machinery amounts
to ` 16,000.

(ii) One new machinery was acquired for ` 46,000.

(iii) 9% Debentures were redeemed on 1.4.14 at a discount of 4% of their face value.
(iv) Dividend at 12% was declared and paid in cash.

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