PROBLEMI 4The Articles of Association of S Ltd. provide the following: (i) That 20% of the net profit of each year shall be transferred to reserve fund. (ii) That an amount equal to 10% of equity dividend shall be set aside for staff bonus. (i) That the balance available for distribution shall be applied : (a) in paying 14% on cumulative preference shares. (6) in paying 20% dividend on equity shares. (c) one-third of the balance available as additional dividend on preference shares and 2/3 as additional equity dividend. A further condition was imposed by the articles viz that the balance carried forward shall be equal to 12% on preference shares after making provisions (i), (ii) and (iii) mentioned above. The company has issued 13,000, 14% cumulative participating preference shares of 100 each fully paid and 70,000 equity shares of 10 each fully paid up. The profit for the year ended 31st March, 2010 was 10,00,000 and balance brought from previous year 80,000. Provide 31,200 for depreciation and #80,000 for taxation before making other appropriations. Prepare Profit and Loss Account