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

Particulars		As at 1-1-2021	As at 31-12-2021
Assets
Cash and bank balances		50,000	40,000
Sundry debtors		77,000	73,000
Short-term investments		1,10,000	84,000
Prepaid expenses		1,000	2,000
Stock-in-trade		92,000	1,06,000
Freehold land and sheds		1,00,000	1,00,000
Plant and machinery		72,000	80,000
		5,02,000	4,85,000
Liabilities and Capital
Sundry creditors		1,03,000	96,000
Outstanding expenses		13,000	22,000
5% Debentures		90,000	70,000
Depreciation fund		40,000	44,000
Reserve for contingencies		60,000	50,000
Profit and loss account		16,000	23,000
Share capital		1,80,000	1,80,000
		5,02,000	4,85,000

 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

Word Count : 1003

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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:

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Degree : MASTER DEGREE PROGRAMMES
Course Name : Master of Arts (Entrepreneurship)
Course Code : MAER
Subject Name : Finance & Accounting
Subject Code : MER 8
Year : 2023