Question 3: Executives of Anguish Industries finished their series of planning meetings and arrived at the business plan for the next financial year. The plan is summarized as follows: a. The company plans to earn a profit after tax of INR 3,850,000. Income taxes are expected to be 30% of the earnings b. During the year, shares of the face value of INR 2,800,000 will be issued, at a premium of 100% c. An office block will be purchased at a down payment of INR 3,500,000 by taking on a mortgage, at the rate of 10% interest per annum, for the like amount d. Plant and equipment costing INR 2,300,000 will be added to the factory on the basis of deferred payments to be made in 5 equal annual installments, beginning with the date of acquisition e. Accounts receivable are to be maintained at the level of one month's sales. Inventory stock was expected to be INR 5,000,000 of which 60% will be raw material. Average credit available will be about 30 days purchases f. It is expected that during the plan period, actual operations may be for 300 days g. Operating expenses projections for the period are as follows: Raw material cost will be 30% of sales revenue; wages will be 10% of sales revenue; other direct manufacturing expenses will be 10% of sales revenue h. Administrative expenses are projected to be INR 2,500,000. Selling and distribution expenses are projected to be INR 1,800,000 Depreciation of plant and machinery is calculated on the basis of 10% straight line; and buildings on the basis of 2.5% straight line Anguish Industries, as at Dec, 2019 : Balance sheet (all figures in 000s) Assets INR Liabilities & Equity INR Cash 500 Accounts Payable 1,500 Accounts Receivable 3,000 Bank overdraft 3,500 RM inventory 3,880 Current Liabilities 5,000 FG inventory Prepaid rent and insurance 120 Current Assets 8,500 i. 1,000 Land Plant and equipment Less: Acc Depreciation Goodwill Total 1,400 700 300 Owner's Equity Share capital 700 Share premium 1,000 Retained earnings 10,500Total 1,000 1,000 3,500 10,500 Required: Based on this information, prepare a projected income statement summary for the plan period and a balance sheet as at the end of the plan period in the below format. Show your calculations and workings clearly. (50 marks) Complete the balance sheet below: INR Anguish Industries, as at Dec, 2020: Planned Balance sheet (all figures in 000s) Assets INR Liabilities & Equity Cash Accounts Payable Accounts Receivable Bank overdraft RM inventory Current Liabilities FG inventory Prepaid rent and insurance Mortgage loan (+ Accrued interest) Current Assets Equipment Credit Non-current liabilities Land Building Less: Acc Depreciation Owner's Equity Plant and equipment Share capital Less: Acc Depreciation Share premium Goodwill Retained earnings Total Assets Total Liabilities + Equity Complete the income statement below: INR Income Statement Sales Less: RM Consumed Less: Wage Expenses Less: Other Direct Manufacturing Expenses Gross Profit Less: Selling, Administration Expenses Less: Depreciation Expense Operating Profit Less: Interest Expense Profit Before Tax Less: Tax Profit After Tax Less: Withdrawal Retained Earnings Addition Show all the required workings clearly along with mentioning any assumptions taken. What is the cash balance in the Balance sheet? Show the workings of the cash account clearly