Question No. 3:The summarized Balance sheets at the end of the last two financial years of shahnoor Ltd are as follows:

(Summarized Balance Sheet)

at 31 December

2004 2005 2004 2005

Rs. Rs. Freehold properly 7,000 14,000

Fixture and fitting 4,000 3,900

Capital: issued and fully stock in trade 2,500 4,400

Trade Debtors 3,700 5,800

Paid ordinary shares 10,000 19,000 Balance at Bank 1,800 ====

19,00 28,100

Redeemable preference

Shares (redeemable

At par) 2,000 -----

Retained earnings 2,400 4,700

Bank overdraft ------ 3,000

Trade creditor 4,600 1,400

19,000 28,100

Additional information

1. The last time the company issued shares for cash was in 1998.
2. The surplus arising from the revaluation of freehold property gave rise to a capitalization issue.
3. All fixtures and fitting held at 31 December. 2004 were bought in 1999, at a total cost of Rs. 10,000 were sold for Rs. 2,300.
4. Some fixtures were bought in the year for Rs. 2,000 while some fixtures with a cost of Rs. 3,000 were sold for Rs. 2,300.
5. The only fixed assets for which depreciation is provided are fixtures and fitting at the annual rate of 10% of the cost of assets held at the end of each financial year.

Required:A funds Flow statement and a Cash Flow Statement for the year ended 31 December 2005.