1. Mr Ali has been trading for some years. The following list of balances has been extracted from his ledger as at 30 April 2020, the end of his most recent financial year.

RS

Capital 83,887

Sales 259,870

Trade creditors 19,840

Returns out 13,407

Provision for doubtful debts 512

Discounts allowed 2,306

Discounts received 1,750

Purchases 135,680

Returns inwards 5,624

Carriage outwards 4,562

Drawings 18,440

Carriage inwards 11,830

Rent, rates and insurance 25,973

Heating and lighting 11,010

Postage, stationery and telephone 2,410

Advertising 5,980

Salaries and wages 38,521

Bad debts 2,008

Cash in hand 534

Cash at bank 4,440

Stock as at 1 May 2019 15,654

Trade debtors 24,500

Fixtures and fittings - at cost 120,740

Provision for depreciation on fixtures and fittings -

as at 30 April 2020 63,020

Depreciation 12,074

'

The following additional information as at 30 April 2020 is available:

(a) Stock at the close of business was valued at Rs17,750.

(b) Insurances have been prepaid by Rs1,120.

(c) Heating and lighting is accrued by Rs1,360.

(d) Rates have been prepaid by Rs5,435.

(e) The provision for doubtful debts is to be adjusted so that it is 3% of trade debtors.

Required:

Prepare Mr Ali's Income Statement for the year ended 30 April 2020 and a balance sheet as at that date.

Question no 2

Estimated Time: 30 Mins

Fixed assets, at cost 160,000

Stock 40,000

Bank overdraft 30,000

Ordinary share capital 100,000

Creditors 45,000

Unappropriated profit 22,000

Accumulated depreciation 50,000

Debtors 47,000

Required:

(a)From the above information, prepare the balance sheet of Budgie Limited indicating clearly the shareholders' funds and working capital.

(b)Comment on the capital position disclosed by the balance sheet you have prepared.

(c)Explain type of share in own words

Question no 3

Estimated Time: 30 Mins

Developing Ltd has an authorized capital of 50,000, 10% preference shares of RS 1 each and

200,000 ordinary shares of 50p each. After preparation of the profit and loss account for 2019, the following balances remained in the ledger

RS 000s

Share capital: fully paid-up:

Preference 30

Ordinary 80

Debentures 20

Share premium account 4

General reserve 7

Unappropriated profit 2018 3

Net profit for 201927

Fixed assets 140

Current assets 50

Creditors 19

The directors recommend:

(i)That RS10,000 be transferred to general reserve,

(ii)Payment of the preference dividend,

(iii)An ordinary dividend of 15%.

Required:

Prepare the appropriation account for 2019 and a balance sheet as at 31 December 2019.