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+--- Thread: How to prepare this Balance Sheet (/showthread.php?tid=7201)
How to prepare this Balance Sheet - skystar - 01-17-2010
Following Balance Sheet of M/S Combined Industries relates to the year ended
December 31, 2000.
Assets Rs. Liabilities & Equity Rs.
Cash 200,000 Accrued Expenses 25,000
Accounts Receivable 650,000 Loan Payable 200,000
Inventory 800,000 Accounts Payable 650,000
Un-expired Insurance 40,000 Capital stock 1,000,000
Plant & Equipment 1,150,000 Surplus 965,000
Total 2,840,000 Total 2,840,000
Additional information
1. Possibility of bad debts on Accounts Receivable has not been considered yet. It is
estimated that bad debts will Rs. 20,000.
2. Rs. 150,000 representing cost of large scale newspaper. Advertising campaign to
be completed in year 2000 has been included in the inventories. It is also found
that inventories include merchandise Rs. 65,000 received on December 31, 2000
has not been recorded as purchases.
3. Un-expired insurance consists of Rs. 4,000. The cost of fire insurance for the year
2000 is Rs. 31,000 includes the cash surrender value of officer life insurance
policy.
4. Books show that plant & equipment has a cost of Rs. 2,000,000 with
depreciation of Rs. 850,000 recognized in prior years. However, the balances
include fully depreciated equipment of Rs. 150,000 that has been scraped and is
no longer in hand.
5.Accrued expenses of Rs. 25,000 represent accrued salaries of Rs. 35,000 less non
current advances of Rs. 10,000 made to company officials.
6.Loan payable represents a loan from bank that is payable in regular quarterly
installments of Rs. 20,000. Interest of Rs. 2,000 accrued on the loan on December
31, 2000 has been recorded in the books.
7.Tax liability not shown is estimated at Rs. 45,000.
8.Capital stock had been issued for a total consideration of Rs. 1,850,000 the
amount received is in excess of par and stated values of the stock being reported
as surplus. Capital stock represents 100,000 shares of Rs. 10 each.
Required
By considering IAS (1) Presentation of Financial Statements, you are required to
prepare corrected Balance Sheet with accounts properly classified.