Question

The Silver Ore Co. Ltd. was formed on April 1, 2005 with an authorised capital of Rs6,00,000 in shares of Rs 10 each. Of these 52,000 shares had been issued and subscribed but there were calls in arrear on 100 shares @ Rs 2.50. From the following trial balance as on March 31, 2006 prepare the trading and profit and loss account and the balance sheet:

	Rs		Rs
Cash at Bank	1,05,500	Advertising	5,000
Share Capital	5,19,750	Cartage on Plant	1,800
Plant	40,000	Furniture and Buildings	20,900
Sale of Silver	1,79,500	Administrative Expenses	28,000
Mines	2,20,000	Repairs of Plant	900
Promotion Expenses	6,000	Coal and Oil	6,500
Interest of F.D. up to Dec.31,2005	3,900	Cash	530
Dividend on Investment	3,200	Investments-share of tin mines	80,000
Royalties Paid	10,000	Brokerage on above	1,000
Railway track and wagons	17,000	6% F.D. in Syndicate Bank	89,000
Wages of Mines	74,220

(i) Depreciate plant and railways by 10%; furniture and building by 5%; (ii) Write off a third of the promotion expenses; (iii) Value of silver ore on March 31, 1969 Rs 15,000, The directors forfeited on December 20, 1968, 100 shares on which only Rs 7.50 had been paid.

Answer 1

Silver Ore Co. Ltd. Profit and Loss Account for the year ended March 31, 2006
Dr.				Cr.
Expenses/Losses		Amount Rs	Revenues/Gains				Amount Rs
Coal and Oil		6,500	Sale				1,79,500
Wages		74,220	Closing Stock				15,000
Royalties		10,000
Gross Profit c/d		1,03,780
		1,94,500					1,94,500
Promotion Expenses Written off		2,000	Gross Profit b/d				1,03,780
Advertising		5,000	Interest on FD			3,900
					Add: Accrued Interest	1,440	5,340
Administrative Expenses		28,000	Dividend on Investment				3,200
Repairs of Plant		900
Depreciation:
Railways Track and Wagons	1,700
Furniture and Building	1,045	2,745
Net Profit c/d		73,675
		1,12,320					1,12,320

Balance Sheet as on March 31, 2006
Liabilities			Amount Rs	Assets			Amount Rs
Share Capital				Fixed Assets
Authorised Capital: 60,000 shares of Rs 10 each					Plant	40,000
			6,00,000		Add: Cartage on Plant	1,800	41,800
Issued and Subscribed:					Mines		2,20,000
	51,900 shares of 10 each	5,19,000			Furniture and Buildings	20,900
	Add: Share Forfeiture	750	5,19,750		Less: Depreciation	(1,045)	19,855
Reserves and Surplus					Railways Track and Wagons	17,000
	Profit and Loss		73,675		Less: Depreciation	(1,700)	15,300
				Investments
					Investment shares of Tin Mines	80,000
					Add: Brokerage	1,000	81,000
					6% F.D. in Syndicate Bank		89,000
				Current Assets, Loan and Advances
				A. Current Assets:
					Interest on F.D. in Syndicate Bank		1,440
					Cash at Bank		1,05,500
					Cash in Hand		530
					Stock in Hand		15,000
				B. Loans and Advances:
				Miscellaneous Expenditure
					Promotion Expenses		4,000
			5,93,425				5,93,425