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Practice problem - 2 (b) Crodit terms are: Sales and debtors-10\% sales are on cash, 50% of the credit sales are collected next month and the balance in the following month. Croditors- Materials 2 months Wagos 1/4 month Overheads 1/2 month (c) Cash and bank balance on 1st April, 2006 is expoctod to be OMP. 6,000. (d) Other relevant information are: (i) Plant and machinery will be installed in Fobruary 2006 at a cost of OMR. 96,000. The monthly instaiment of OMR. 2,000 is payable from April orwards. (ii) Dividend (i) 5% on Proference Share Capital of OMR 200,000 will be paid on 1 st June. (iii) Advance to be roceived for sale of vehicles OMR. 9,000 in June. (iv) Dividends from investments amounting to OMPR 1,000 are expected to be receivod in June. (v) Income tax (advance) to be paid in June is OMP. 2.000 Practice problem - 2 (b) Crodit terms are: Sales and debtors-10\% sales are on cash, 50% of the credit sales are collected next month and the balance in the following month. Croditors- Materials 2 months Wagos 1/4 month Overheads 1/2 month (c) Cash and bank balance on 1st April, 2006 is expoctod to be OMP. 6,000. (d) Other relevant information are: (i) Plant and machinery will be installed in Fobruary 2006 at a cost of OMR. 96,000. The monthly instaiment of OMR. 2,000 is payable from April orwards. (ii) Dividend (i) 5% on Proference Share Capital of OMR 200,000 will be paid on 1 st June. (iii) Advance to be roceived for sale of vehicles OMR. 9,000 in June. (iv) Dividends from investments amounting to OMPR 1,000 are expected to be receivod in June. (v) Income tax (advance) to be paid in June is OMP. 2.000

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