Question No. 2: The following Trial Balance was extracted for the books of Platinum Ltd. at 31 December, 2005

Share capital, authorized and issued: Rs. Rs.

16,000 Shares of Rs. 10 each 160,000

Freehold premises at cost 101,000

Plant and machinery at cost 40,000

Stock in trade at I January 2005 51,352

Balance at bank 4,289

Provision for Dep. plant and machinery I January 2005 20,000

Bad debts written off 820

Provision for doubtful debts at I January 2005 390

Directors remuneration 14,000

Debtors and creditors 17,49213,298

Profit and loss account balance at I January 2005 12,448

Purchase & Sales 142,998 194,542

General expenses 6,242

Wages 19,285

Rent and rates 3,200

Rs 400,678 Rs.400,678

You are given the following additional information

1. The provision for doubtful debts is to be increased to Rs. 500
2. Stock in trade at 31 December 2005 was Rs. 56,778
3. Wages outstanding at 31 December 2005 amounted to Rs. 482
4. Provision for depreciation of plant and machinery is to be made at the rate of 10% p.a on cost.
5. Rent and rates amounting to Rs. 350 were paid in advance at 31 December 2005
6. The directors propose to pay a dividend of 5% on the issued capital and to transfer Rs. 60,000 to General Reserve.