Illustration 11 On 1st January, 2009, the Board of Directors of Dowell Co. Ltd. wishes to know the amount of working capital that will be required to meet the program of activity they have planned for the year. The following information's are available: 1) Issued and paid-up capital Rs. 2,00,000 5% Debentures (secured on assets) Rs. 50,000 ) Fixed assets valued at Rs. 1,25,000 on 31.12.2008 IV) Production during the previous year was 60,000 units. It is planned that the level of activity should be maintained during the present year. U15 month. V The ratios of cost to selling price are-raw materials 60%.. direct wages 10%, and overheads 20% V) Raw materials are expected to remain in stores for an average of two months before these are issued for production VII Each unit of production is expected to be in process for one VII) Finished goods will stay in warehouse for approximately three months. Ix) Creditors allow credit for 2 months from the date of delivery of raw materials. x) Credit allowed to debtors is 3 months from the date of dispatch xi) Selling price per unit is Rs. 5. xii) There is a regular production and sales cycle. Prepare a) Working capital requirement forcast and b) An estimated Profit and Loss Account and Balance Sheet at the end of the year