Question
Case No. 4 Omran Company was incorporated in the year 2004 as a joint stock company with a nominal capital of OMR 450,000 in equity
Case No. 4
Omran Company was incorporated in the year 2004 as a joint stock company with a nominal capital of OMR 450,000 in equity shares of OMR 10 each. As of December 31, 2019, 20,000 shares were fully called up. The following balances were extracted from the ledger of the company as on December 31, 2019.
Particulars | Amount (OMR) |
Opening stock | 86,721 |
Accounts Payable | 21,516 |
Investment in government securities | 114,734 |
Advertising Expense | 1,716 |
Bad Debts | 7,750 |
Profit and loss account | 55,676 |
Creditors | 12,563 |
Debtors | 75,407 |
Equity Share Capital | 200,000 |
Cash | 75,849 |
Discount on shares | 9,189 |
Discount on issue of shares | 3,118 |
Interim Dividend | 1,367 |
Furniture | 10,442 |
Insurance Expense | 12,318 |
Interest Income | 32,854 |
Notes Payable | 1,664 |
Notes Receivable | 10,638 |
Office Supplies | 8,527 |
Outstanding Expense | 37,505 |
Prepaid Insurance | 12,519 |
Prepaid Rent | 15,277 |
Property and Equipment | 38,523 |
Rent Expense | 18,845 |
Purchases | 2,326 |
Salaries and Wages | 126,809 |
Sales | 152,635 |
Additional information:
- Stock as on December 31, 2019 is OMR 29,000.
- Depreciation on property and furniture at 5%.
- Interest accrued on government securities OMR 750.
- Write off one third discount on shares.
- Provision for bad and doubtful debts OMR 800.
Question No. 4
- You are required to prepare Trading and Profit and Loss Account of Omran Company for the year ended December 31, 2019.
- Discuss the disadvantages of this type of business with regard to concentration of economic power and personal interest. [Answer in 100-150 words]
- iii:Using the same information in Case No. 4, prepare the balance sheet as of
December 31, 2019.
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