1. Preparation of the profit and loss account from a given trial balance: Based upon the given trial balance and the additional information, prepare the profit and loss account of Shivam Industries Ltd for the year ended 31^stMarch 2011:

Trial Balance of Shivam Industries Ltd as on 31^stMarch 2011

Particulars

(Amounts in Rs.)

Dr

Cr

Share Capital (1,20,000 equity shares of Rs. 10 each)

General Reserve

Calls in arrear (20,000 shares at Rs. 5 each)

Unclaimed dividend

Sundry creditors

Buildings (at cost)

Purchases

Sales

Manufacturing Expenses

Salaries

General Expenses

Machinery (at cost)

Motor Vehicles (at cost)

Furniture (at cost)

Opening stock

Sundry Debtors

Investments

Provision for depreciation (1.4.2010)

Machinery

Building

Motor Vehicles

Furniture

Advance Income Tax (2009-10)

Advance Income Tax (2010-11)

Cash at Bank

Directors Fees

Interest on Investment

Profit and Loss A/c

Provision for Income Tax (1.4.2010)

100,000

300,000

1,001,806

718,000

53,628

62,156

400,000

60,000

10,000

344,116

446,760

577,900

100,000

125,000

144,480

3,600

1,200,000

500,000

13,052

173,716

2,167,894

110,000

50,000

30,000

4,000

17,088

91,696

90,000

Total

4,447,446

4,447,446

Additional Information:

a.Stock in hand on 31^stMarch 2011 Rs. 297,360

b.Provide depreciation in the fixed assets at original cost at the following rates:

Plant and Machinery 10%

Motor Vehicles 20%

Furniture 10%

Buildings 2%

c.Interest accrued on investments Rs. 5,500

d.Provision for doubtful debts to be made 2%

e.Provision for tax for the current year to be made Rs. 1,20,000

f.Salary for March 2011 is outstanding Rs. 4,800

g.General expenses include insurance paid amounting to Rs. 8,000 for the period from 1^stJanuary 2011 to 31^stDecember 2011

h.The board of directors has proposed transfer of Rs. 50,000 to general reserves and dividend on equity shares at 4%. Dividend to be paid only on fully paid up shares.