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 a) The last time the company issued shares for cash was in 1998. b) The surplus arising from the revaluation of freehold property gave rise to a capitalization issue. c) 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. d) 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. e) 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.

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 a) The last time the company issued shares for cash was in 1998. b) The surplus arising from the revaluation of freehold property gave rise to a capitalization issue. c) 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. d) 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. e) 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.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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