Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Assignment Instructions The newly appointed accountant of a start - up company Pioneer Limited , which has got funding by Peyush Bansal in Shark Tank
Assignment Instructions
The newly appointed accountant of a startup company Pioneer Limited which has got funding by Peyush Bansal in Shark Tank against issue of shares, has prepared the following trial balance from the details compiled by him for two years as follows:
Trial balance for the year ended Mar
Account Title
Head of Account
Debit Amount
Credit Amount
Share Capital
Non Current liability
Bank Loan
NonCurrent liability
Share capital Peyush Bansal
NonCurrent liability
Trade payable
Current liability
Outstanding Rent
Current liability
Other current liabilities
Current liability
Equipment
Noncurrent tangible asset
Furniture
Noncurrent tangible asset
Patents
Noncurrent tangible asset
Investment by Peyush Bansal cash received
Current investment
Trade receivables
Current asset
Cash balance
Current asset
Bank balance
Current asset
Revenue
Indirect Income
Purchases
Direct Expense
Salaries
Direct Expense
Rent of building
Indirect Expense
Accumulated Depreciation on tangible assets
Direct Expenses
Dividend expense during the year
Indirect Expense
Task
Now, the accountant is confused as regards two things:
Whether the classification of Head of Account is correct?
Whether the classification under debit or credit is correct?
You are required to give the correct classification for the above accounts mentioned in the Trial balance above.
Also, by making corrections to what will be correctly debited or credited to the Trial Balance, prepare a corrected trial balance for the year ended Mar
For Task onwards, the following notes need to be considered:
a There is no opening stock for the company.
b Closing Stock as on is
c Dep per year is calculated at the below rates:
Equipment on cost
Furniture on cost
d Patents are not to be amortised
e During the year, new equipment was purchased for Dep to be accounted for the full year
f At the start of the year, Furniture costing Carrying value was sold at a loss of No Dep for current year to be accounted for
Task :
You are required to prepare a Profit and loss account for the year ended Mar
Task :
You are also required to prepare Balance Sheet for Pioneer Limited as on Mar
Task :
Pioneer Limited is unable to assess the cash and liquidity position of the company based on the above Profit and Loss Account and Balance Sheet. You are required to help the management by preparing the Cash flow Statement for the year ended Mar
Following additional information is made available for you:
a Dividend paid during the year
b Opening balances as on are as follows:
i Patents
ii Investments by Peyush Bansal
iii Trade receivable
iv Cash Balance
v Bank Balance
vi Share capital
vii Bank Loan
viii Trade payables
ix Outstanding Rent
x Other current liabilities
xi Reserves and Surplus
Task :
The management of the company is asking you to analyse the performance and Cash flow of Pioneer Limited for the year ended Mar making specific reference to any concerns or expectations regarding future periods, with the help of various ratios to support your analysis.
Part :
The auditor of the company, Ms JBL Co and Associates is planning to conduct internal control risk audit for the year ended Mar on the request to the new investor, Mr Peyush Bansal to ensure there are no shortcomings in the working and management of the company. You are required identify and describe any five potential risks related to the internal control of the company and also, what should be the auditors response to address those risks.
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started