Case 1

Following are the balances of Bank Muscat for the year ended as on 31st December 2020 (Amounts are in 000 OMR)

	PARTICULARS	OMR
Interest on Savings Account		6,000
Interest on Fixed Deposits		33,000
Interest on Loans		19,200
Rent and Rates		1,500
Interest on Current Account		4,500
Interest on Cash Credits		16,800
Discounts received		21,000
Commission Expenses		600
Commission Received		2,400
Directors Fees		150
Salaries and Allowances		6,000
Interest on Overdrafts		18,000
Interest on borrowings from other banks		1,500
Legal Charges		90
Transfer Fees paid		1,200
Locker Rent		1,800
Other office expenses		120
Depreciation on Fixed Assets		6,000
Miscellaneous Expenses		1,200

Other Adjustments:

1. Fair value of sale of investments were increased by: OMR 3,600
2. Loss on exchange difference arising on transactions of foreign operations was: OMR 600
3. Income tax expenses: OMR 9,000
4. Impairment for loans: OMR 300
5. Impairment for investments: OMR 2,700
6. Rebate on bills discounted: OMR 1,800

From the above information Prepare Income Statement and based on the prepared Income Statement answer the following 3 multiple choice questions (Do not upload Income Statement in moodle).

Total interest expended will be: a. OMR 45,400,000 O b. OMR 55,000,000 O c. c. OMR 45,000,000 O d. OMR 50,400,000 Surplus transferred to Statement of Financial Position during the year will be: O a OMR 6,540,000 O b. OMR 6,450,000 O c. OMR 7,440,000 O d. OMR 2,270,000 The accounting treatment of provision for tax given in the adjustments will be: a. Deducted from interest margin in the income statement and shown in the provisions of the balance Sheet O b. Deducted from operating profit in the income statement and shown in the provisions of the balance sheet C. Added to the operating profit in the income statement and shown in the provisions of the balance sheet o d. Added to the interest margin in the income statement and shown in the provisions of the balance sheet