The cost of the proposed project of Shalom Cooling Devices Ltd$.$ is firmed up at $`1250\mathrm{.}00$

lakhs as follows:

$`$ in lakh

A$.$ Capital cost:

Land & Site Development

Building

Plant & Machinery

Misc. Fixed Assets

Preliminary Expenses

Pre$-$operative Expenses

Contingency Margin

B$.$ Margin Money for Working Capital

C$.$ Total Cost

$105\mathrm{.}00$

$150\mathrm{.}00$

$630\mathrm{.}00$

$55\mathrm{.}00$

$25\mathrm{.}00$

$100\mathrm{.}00$

$90\mathrm{.}00$

$1155\mathrm{.}00$

$95\mathrm{.}00$

$1250\mathrm{.}00$

Chapter $12$The Process of Projected Financial Statements

$321$

The proposed means of finance for the project are firmed up as follows:

Equity Share Capital:

Promoters

Others

Term Loan

Total

Further information:

$1.$ Projected sales and profit:

Sales Realization

$400\mathrm{.}00$

$150\mathrm{.}00$

$1$

$`$ in lakh

$550\mathrm{.}00$

$700\mathrm{.}00$

$1250\mathrm{.}00$

$`$ in lakh

$2$

$1751\mathrm{.}50$

Profit before non$-$cash charges

$175\mathrm{.}90$

$2205\mathrm{.}50$

$245\mathrm{.}00$

$3$

$2546\mathrm{.}80$

$314\mathrm{.}40$

$4$

$2594\mathrm{.}00$

$347\mathrm{.}80$

$2.$ The depreciation rates under the SLM for company law purposes are as follows:

Building

Plant and Machinery

Misc. Fixed Assets

$3\mathrm{.}34\%$

$4\mathrm{.}75\%$

$4\mathrm{.}75\%$

$3.$ The depreciation rates for income tax purposes under the WDV method are as

follows:

Building

Plant and Machinery

Misc. Fixed Assets

$10\%$

$15\%$

$15\%$

$4.$ Preliminary expenses have to be written off over $5$ years equally.

$5.$ Income tax provision is to be made @ $30\%.$

$6.$ Dividend is to be paid @ $14\%$ in the $1$st year. To be increased by $1\%$ every year.

$7.$ Dividend tax applicable $15\%.$

Required:

Prepare for $4$ years the following projected statements:

$1.$ 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 $($Inclusive of Dividend Tax$)$

$6.$ Projected Profitability Estimates