Question:
Prepare for 4 years the following projected statements of the company
(1) Fixed asset valuation for depreciation purposes, (2) SLM depreciation as per company law, (3) Depreciation as per income tax act (WDV), (4)Provision for income tax, (5) Dividend for income tax, (6) Dividend (inclusive of dividend tax), (7) Projected profitability estimates
The cost of project of Rita Jewelers Ltd. Is firmed up at Rs. 1500 Lakh as follows INR In Lakh The proposed means of finance for the project re firmed up as follows INR In Lakh A Promoters 450 150 B Others Term loan Total Further Information as below: Projected sales and profit: Years Sales Realization 2000 201.5 Profit before non-cash charges The depreciation rates under the SLM for company law purposes are as 2 follows: Building 3.34% Plants & Machinery 4.75% Misc. Fixed Assets 4.75% The depreciation rates under the WDV method are as follows Building Plant & Machinery 10.00% 15.00% 15.00% Misc. Fixed Assets 4 Preliminary expenses have to be written off equally over 5 ars Income tax provision is to be made @ 30% ignore surcharge and MAT Dividend is to be paid @ 15% in the 1st year and 2nd year and 17% therafter Dividend tax applicable 20% A Capital Cost Land & Site Development Building Plant & Machinery Mis. Fixed Assets Preliminary Expenses Pre-operative expenses Contigency Margin B Margin Money for Working Capital c Total Cost 1 3 Equity Share Capital 600 900 1500 INR In Lakh 2 2400 275.4 3 2700 351.45 4 2700 380.75 The cost of project of Rita Jewelers Ltd. Is firmed up at Rs. 1500 Lakh as follows INR In Lakh The proposed means of finance for the project re firmed up as follows INR In Lakh A Promoters 450 150 B Others Term loan Total Further Information as below: Projected sales and profit: Years Sales Realization 2000 201.5 Profit before non-cash charges The depreciation rates under the SLM for company law purposes are as 2 follows: Building 3.34% Plants & Machinery 4.75% Misc. Fixed Assets 4.75% The depreciation rates under the WDV method are as follows Building Plant & Machinery 10.00% 15.00% 15.00% Misc. Fixed Assets 4 Preliminary expenses have to be written off equally over 5 ars Income tax provision is to be made @ 30% ignore surcharge and MAT Dividend is to be paid @ 15% in the 1st year and 2nd year and 17% therafter Dividend tax applicable 20% A Capital Cost Land & Site Development Building Plant & Machinery Mis. Fixed Assets Preliminary Expenses Pre-operative expenses Contigency Margin B Margin Money for Working Capital c Total Cost 1 3 Equity Share Capital 600 900 1500 INR In Lakh 2 2400 275.4 3 2700 351.45 4 2700 380.75
