5. A proforma cost sheet of a company provides the following particulars:

Elements of Cost Material 40%

Direct Labour 20%

Overheads 20%

The following further particulars are available:

(a) It is proposed to maintain a level of activity of 2,00,000 units.

(b) Selling price is `12 per unit.

(c) Raw materials are expected to remain in stores for an average period of 1 month.

(d) Materials will be in process, on average of ½ month.

(e) Finished goods are required to be in stock for an average period of 1 month.

(f) Credit allowed to debtors is 2 months.

(g) Creditor allowed by suppliers is 1 month.

You may assume that sales and production follow a consistent pattern.

You are required to prepare a statement of Working Capital requirements, a forecast Profit and Loss Account and Balance Sheet of the Company assuming that:

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Share Capital 15,00,000 8% Debentures 2,00,000 Fixed Assets 13,00,000