The trial balance of Hindustan Textiles Ltd. as at 31st March 2006 is as presented hereunder.

Further information

1. The authorized capital of the company is 30 lakh equity shares of ₹10 each of which 25 lakh shares have been issued. ₹8 per share has been called up.
2. Preliminary expenses to be w/o ₹1,50,000.

3. Depreciation to be charged:
n Building @ 10%
n Plant and machinery @ 14%
n Furniture and fittings @ 18%
n Motor vehicles @ 20%
4. Goodwill to be amortised ₹4,00,000.
5. The closing stock of loose tools is valued at ₹7,30,210.
6. Face value of government bonds is ₹10,00,000. They carry interest @ 8% per annum.
7. The closing inventory is valued at ₹54,20,310.
8. Provide for bad debts @ 5%.
9. Interest includes that on debentures for 9 months.
10. Provide income tax @ 35%.
11. A final dividend of 6% is recommended by the board of directors.
Required

1. Prepare the following financial statements of Hindustan Textiles Ltd.:

a. Balance sheet as at 31st March 2006.

b. Profit and loss account for the year ended 31st March 2006.

c. Profit and loss appropriation account for the year ended 31st March 2006.
2. Briefly comment upon the performance of the company.

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Accounts Building Plant and machinery Loose tools Furniture and fittings Preliminary expenses Dr. (?) 90,95,500 1,65,60,480 Cr. (?) 9.40.260 3,59,330 4,50,000 Cash in hand 1,49,071 Bank current account 1,50,100 Government bonds at cost 9,88,000 Bills receivable 31,60,900 Motor vehicles 5,50,000 Goodwill Sundry debtors Sundry creditors General reserve Profit & loss A/c Bank overdraft-secured 16,00,000 20,80,000 30,87,209 15,00,000 8,89,760 11,18,456 Purchases and returns 8,10,10,200 5,78,000 Advertising 2,54,200 Sales Returns and sales 7,44,800 10,80,80,345 Legal charges 1,00,000 Carriage inwards 3,70,100 Wages 23,21,400 Rent, rates and insurance 1,90,178 Share capital 10% debentures-unsecured 2,00,00,000 1,00,00,000 Opening inventory 47,60,850 Income tax paid in advance 15,00,000 Deposits with excise department 8,00,000 Advances to staff 5,00,000 Trade expenses 1,50,900 Manufacturing expenses Repairs to plant and machinery Interim dividend @ 4% Salaries Interest on government bonds 1,35,44,690 86,800 8,00,000 10,73,677 40,000 Interest 10,02,334 Total... 14,52,93,770 14,52,93,770