The directors of Mick Tools Ltd., are worried at the deteriorating financial position of the company. The company has utilised full overdraft facility from bank and still, it is not able to pay its creditors on due dates, although the profits earned are satisfactory.

The following are the balance sheets as on 31st December 2007 and 2008.

31st Dec. 2007 31st Dec. 2008 Rs. Rs.

Share Capital 10,00,000 10,00,000

(Shares of 10 each fully paid)

Profit and Loss Account 60,000 80,000 Overdraft from bank 1,60,000 6,00,000 Sundry Creditors 2,00,000 6,00,000 14,20,000 22,80,000 Land & Buildings 3,00,000 5,00,000 Plant & Machinery 5,00,000 6,00,000 Less: Depreciation 1,20,000 3,80,000 1,80,000 4,20,000 Vehicles 1,16,000 1,24,000 Less: Depreciation 56,000 60,000 84,000 40,000 Stock 2,20,000 7,20,000 Debtors 4,60,000 6,00,000 14,20,000 22,80,000 During the year, a dividend of 10% was distributed to the shareholders.

On 1st January, 2008 a motor car which originally cost Rs. 20,000 and showing book value of Rs. 10,000 was sold for Rs. 16,000. You are required to prepare a statement which will show as to what has happened to the money which has come into the business during the year (Give detailed working).