Ltd., prepares its financial statements on both historical cost accounting basis and inflation adjusted accounting basis using current purchasing power method.

Given below are the trading, profit and loss accounts for the year ended 31 March 2001 and comparative balance sheets of the company for the years ended 31 March 2000 and 31 March 2001.

Profit and loss account for the year ended 31 March 2001 (Historical cost accounting basis)
	Sh. 000	Sh. 000
Sales Opening stock Purchases Closing stock Cost of sales Gross profit Expenses: Loan interest Salaries and wages Depreciation Other expenses Profit before tax Taxation Profit after tax Dividends paid: Ordinary Preference Dividends proposed: Ordinary Preference Retained profits for the year	30,000 65,000 95,000 35,000 500 3,500 5,000 1,000 2,500 1,000 2,500 1,000	90,000 60,000 30,000 10,000 20,000 8,000 12,000 7,000 5,000