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3.28 Management Accounting (Section B)—ISC XII

Additional Information:
1. Depreciation on tangible fixed assets for the year 2018–19 was ` 50,000.
2. Bad Debts written off were ` 5,000.
3. Income included liability written back of ` 5,000.

6. Calculate Operating Profit before Working Capital Changes from the following information and Balance
Sheet of Gati Ltd. as at 31st March, 2019:
Particulars Note No. 31st March, 31st March,
2019 (`) 2018 (`)
I. EQUITY AND LIABILITIES
1. Shareholders’ Funds
(a) Share Capital 1 12,00,000 12,00,000
(b) Reserves and Surplus 2 5,15,000 2,75,000
2. Current Liabilities
(a) Trade Payables 3 1,40,000 1,10,000
(b) Other Current Liabilities 4 10,000 20,000
(c) Short-term Provisions 5 2,50,000 2,00,000
Total 21,15,000 18,05,000
II. ASSETS
1. Non-Current Assets
(a) Fixed Assets 13,80,000 10,40,000
(b) Non-Current Investments 5,00,000 5,00,000
2. Current Assets 2,35,000 2,65,000
Total 21,15,000 18,05,000

Notes to Accounts
Particulars 31st March, 31st March,
2019 (`) 2018 (`)
1. Share Capital
Equity Share Capital 10,00,000 10,00,000
8% Preference Share Capital 2,00,000 2,00,000
12,00,000 12,00,000
2. Reserves and Surplus
General Reserve 1,50,000 1,00,000
Investments Fluctuation Reserve 90,000 50,000
Surplus, i.e., Balance in Statement of Profit and Loss 2,75,000 1,25,000
5,15,000 2,75,000
3. Trade Payables
Creditors 80,000 70,000
Bills Payable 60,000 40,000
1,40,000 1,10,000
4. Other Current Liabilities
Outstanding Expenses 10,000 20,000
5. Short-term Provisions
Provision for Tax 2,50,000 2,00,000

Note: Proposed equity dividends for the years ended 31st March, 2018 and 2019 are ` 1,04,000 and
` 1,24,000 respectively.