Sigma International Ltd (SIL) provides the following balance sheet for the year ending March 31, 2009:

During the year 2009–10, the following transactions took place:

(i) Cash sales ₹5,00,000 and credit sales ₹2,56,000.

(ii) Bad debts written off during the year were ₹2,300 and discount allowed to customers was₹700. Customers paid ₹75,000 during the year.

(iii) During the year cash purchase was ₹ 90,000 and credit purchase was ₹ 1,34,000; ₹ 67,000 was paidto suppliers.

(vi) 23,000; 45,000; 56,000; and 20,000 was paid as manufacturing, administrative, selling and interest onloan for the year.

(v) During the year company paid interim dividend of ₹ 45,000 and final dividend of ₹ 25,000. Thecompany also paid tax of ₹ 67,000.

(vi) ₹ 45,000 was transferred to general reserve during the year.

(vii) Depreciation on land and building was provided ₹ 24,000.

(viii) Goodwill written off ₹ 15,000.

(ix) During the year equity shares of face value ₹ 1,50,000 were issued at 10% premium, whereaspreference shares were redeemed at par.

(x) Dividend on preference shares was also paid.

Discussion Questions

1. Prepare a balance sheet for the year ending March 31, 2010 and prepare a fund fl ow statement.

2. Carry out inferences from fund fl ow statement.

(A) Sources of Funds Equity Share Capital 8% Preference Share Capital General Reserve P & L Appropriation a/c Creditors Proposed Dividend Outstanding Expenses (B) Application of Funds Goodwill Land and Building Plant Debtors Stock Bills Receivable Cash in hand Cash at bank Balance Sheet as on March 31, 2009 Particulars Previous Year 4,00,000 50,000 60,000 50,000 77,000 40,000 40,000 1,15,000 2,00,000 80,000 1,60,000 77,000 20,000 15,000 50,000