You are required to prepare a Schedule of Changes in Working Capital and a Statement showing Sources and Application of Funds for XYZ Ltd. The following is the condensed Balance sheet of XYZ Ltd. at the beginning and at the end of the year 2021

 Additional information available is 

Dividend was paid @ 10%.

During the year and old machinery costing Rs. 12,000 was sold for Rs. 4,000, on which accumulated depreciation was Rs. 6,000 and a new machinery of Rs. 20,000 was purchased. The factory sheds are fully depreciated.

 5% Debentures of face value of Rs. 100 each worth Rs. 20,000 were redeemed by purchase from the open market at Rs. 96 each.

 Rs. 10,000 was debited to the contingency reserve for settlement of previous tax liability.

 Investment worth Rs. 26,000 were sold at book valu

To prepare the Schedule of Changes in Working Capital and the Statement showing Sources and Application of Funds for XYZ Ltd., we need to analyze the changes in each item of the balance sheet and determine their impact on working capital and the overall sources and application of funds. Let's go through each item and calculate the changes:

1. Cash and bank balances:

   • As at 1-1-2021: Rs. 50,000
   • As at 31-12-2021: Rs. 40,000
   • Change: Rs. (50,000 - 40,000) = Rs. -10,000 (Decrease)

2. Sundry debtors:

   • As at 1-1-2021: Rs. 77,000
   • As at 31-12-2021: Rs. 73,000
   • Change: Rs. (77,000 - 73,000) = Rs. 4,000 (Decrease)

3. Short-term investments:

   • As at 1-1-2021: Rs. 1,10,000
   • As at 31-12-2021: Rs. 84,000
   • Change: Rs. (1,10,000 - 84,000) = Rs. 26,000 (Decrease)

4. Prepaid expenses:

   • As at 1-1-2021: Rs. 1,000
   • As at 31-12-2021: Rs. 2,000
   • Change: Rs. (2,000 - 1,000) = Rs. 1,000 (Increase)

5. Stock-in-trade:

   • As at 1-1-2021: Rs. 92,000
   • As at 31-12-2021: Rs. 1,06,000
   • Change: Rs. (1,06,000 - 92,000) = Rs. 14,000 (Increase)

6. Freehold land and sheds:

   • As at 1-1-2021: Rs. 1,00,000
   • As at 31-12-2021: Rs. ______ _______ ______ _____ _________ _______ _________ _______ _____ ________ ____.
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