Page 97 - DCOM302_MANAGEMENT_ACCOUNTING

Management Accounting

Notes The next step is to prepare the Adjusted profit and loss account.

Adjusted Profit & Loss Account

Particulars ` Particulars `
To Depreciation Building 4,000 By Balance B/d 16,000
To Depreciation Plant 4,000 By Fund from operations 36,000
To Transfer to General Reserve 4,000
To Provision for taxation 19,000
To Interim dividend 8,000
To Balance c/d 13,000
52,000 52,000
The next step is to prepare the fund fl ow statement.

Fund Flow Statement
Sources ` Applications `
Fund from operations 36,000 Purchase of the plant 3,000
Purchase of the Investment 1,000
Increase in working capital 7,000
Tax paid 17,000
Interim dividend 8,000
36,000 36,000
3. The following are the summarized balance sheets of PTC Ltd., as on 31st March 2009 and
2010:

Balance Sheet 2009

Liabilities ` Assets `
Share capital 9,00,000 Fixed Assets 8,00,000
General Reserve 6,00,000 Investments 1,00,000
Profit & Loss A/c 1,12,000 Stock 4,80,000

Sundry creditors 3,36,000 Sundry Debtors 4,20,000
Provision for taxation 1,50,000 Bank 2,98,000
20,98,000 20,98,000

Balance Sheet 2010
Liabilities ` Assets `
Share capital 9,00,000 Fixed Assets 6,40,000
General Reserve 6,20,000 Investments 1,20,000

Profit & Loss A/c 1,36,000 Stock 4,20,000
Mortgage Loan 5,40,000 Sundry Debtors 9,10,000
Sundry creditors 2,68,000 Bank 3,94,000
Provision for taxation 20,000
24,84,000 24,84,000
Additional Information:

(i) Investments costing `16,000 were sold during the year for `17,000 and further
investments purchased during the year for `36,000.
(ii) The net profit for the year was `1,24,000 after charging depreciation on fi xed assets

of `1,40,000 for the year and provision for taxation `20,000.

92 LOVELY PROFESSIONAL UNIVERSITY