Problem

The following data are provided for a small manufacturing organization.

Liabilities                         TL 000s        Assets                  TL000s
                                                                                    At cost depriciation
Share Capital                   100              Fixed                    140     40       100
Reserves                         20
Debentures (10%)           40                Current Stock       35
Trade creditors                12                Debtors               26
Dividends payable            10                Cash                    21
                                     182                                         182                            

The following details relate to Manufacturing Organization during the year ended 30 September 2015.

A Sales totalled TL180,000 over the year of which two-third of the total were sold on credit and one-third cash

B Purchases of stocks were made on credit totalling TL80,000.

C Depreciation amounted to TL20,000.

D Operating expenses incurred for the year were TL25,000. TL22,000 was paid in cash with TL3,000 unpaid at 30th September 2015.

E The directors declared a final dividend for the year to 30 September  2015 of TL5,000. An interim dividend of TL4,000 had been declared during the year and paid. The previous year's dividend was also paid in full during the year.

F Debenture interest of TL4,000 was paid in cash.

G The closing stock was valued at TL15,000.

H Trade creditors were paid TL40,000.

I Debtors were paid TL110,000 in cash.

Using the information above, prepare the profit and loss account for the year ended 30 September 2015 together with a summarized balance sheet at that date.

Explain the logical bases of all the calculations you do clearly.