946 Net Effect : The Salaries Account will be increased by 21,200. The total salary ( 5,400 +2 1,200) of 6,600 will be debited to profit and Loss Account Alternatively, only employees' share, i.e. 600 can be added with the Salary Account and 6,000 is to be shown in the Profit and Loss Account as salary. The proprietor's share of 600 will also be shown in the Profit and Loss Account as a separate item as employer's contribution to P. F. How the effect on Profit and Loss Account will be the same. 16. Closing Stock (i) Closing stock appearing in the additional information will be credited in Trading Account and is to be shown as a current asset in the Balance Sheet. (ii) If closing stock is appearing in the Trial Balance it is to be shown in the Balance Sheet only. It should be noted that the closing stock should be valued at lower of cost and net realisable value. Para 3 of AS-2 defines net realisable value as : Net realisable value is the estimated selling price in the ordinary course of business less the estimated cost of completion and the estimated cost necessary to make the sale. (For details see Chapter 8 - Inventories./ Illustration 1 Show by means of Journal Entries how the following items should be adjusted when preparing the Final Accounts of a firm for the year ended 31st March, 2017. (1) Closing stock at market value as on March 31, 2017 was 3 1,00,000 (cost 380,000). Stock is being valued on a consistent basis of cost or market price whichever is lower. (ii) No entry had been passed in the books for stock withdrawn from the business by the proprietor 10,000. (iii) Legal charges include