Please update on this quickly

In trail balance sheet how can debit and credit entry are different

Assignment Instructions

The newly appointed accountant of a start$-$up company Pioneer Limited, which has received funding from two sharks jointly in the Shark Tank against the issue of debentures, has prepared a Trial Balance from the details compiled by him for two years as follows:

Trial balance for the year ended Mar $31,2022$

Account Title

Head of Account

Debit Amount $()$

Credit Amount $()$

Share Capital

Non$-$ Current liability

$5,00,000$

Bank Loan

Non$-$Current liability

$1,00,000$

Share capital$-$ Peyush Bansal

Non$-$Current liability

$1,00,000$

Trade payable

Current liability

$50,000$

Outstanding Rent

Current liability

$5,000$

Other current liabilities

Current liability

$80,000$

Equipment

Non$-$current tangible asset

$2,00,000$

Furniture

Non$-$current tangible asset

$3,00,000$

Patents

Non$-$current tangible asset

$1,00,000$

Investment by Peyush Bansal$-$ cash received

Current investment

$1,00,000$

Trade receivables

Current asset

$80,000$

Cash balance

Current asset

$5,000$

Bank balance

Current asset

$2,00,000$

Revenue

Indirect Income

$3,60,000$

Purchases

Direct Expense

$1,00,000$

Salaries

Direct Expense

$20,000$

Rent of building

Indirect Expense

$10,000$

Accumulated Depreciation on tangible assets

Direct Expenses

$50,000$

Dividend expense during the year

Indirect Expense

$30,000$

$16,95,000$

$6,95,000$

Note:

There is no opening stock for the company

Closing Stock as on $31\mathrm{.}03\mathrm{.}2022$ is $50,000$

Depreciation for the year is :

Equipment$-10\%$ on cost

Furniture$-7\mathrm{.}5\%$ on cost

Patents are not to be amortised

During the year, new equipment was purchased for $1,00,000($Dep to be given for the full year$)$

At the start of the year, Furniture costing $50,000($Carrying value $40,000)$ was sold at a loss of $35,000($No Dep for current year to be given$)$

Now, the accountant is confused with regards two things:

$1.$Whether the classification of $$Head of Account$$ is correct?

$2.$Whether the classification under $$debit$$ or $$credit$$ is correct? $\{$Apply three golden rules of debit and credit here: $(1)$ Debit what comes in$,$ credit what goes out. $(2)$ Debit the receiver, credit the giver. And $(3)$ Debit all expenses, credit all income.$\}$

Part $1$:

$1.$ Give the correct classification for the accounts mentioned in the Trial balance earlier.

$2.$ 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 $31$ March $2022.$

Part $2$:

You are also required to prepare Statement of Financial Position for Pioneer Limited as on Mar $31,2022.$

Part $3$:

Prepare an Statement of Comprehensive Income for the year ended Mar $31,2022.$

Part $4$:

Pioneer Limited is unable to assess the cash and liquidity position of the company based on the Profit and Loss Account and Balance Sheet prepared. You are required to help the management by preparing the Cash flow Statement for the year ended Mar $31,2022.$

Following additional information is made available for you:

a$)$ Dividend paid during the year $=30,000$

b$)$ Opening balances as on $01\mathrm{.}04\mathrm{.}2021$ are as follows:

i$)$ Patent $=1,05,000$

ii$)$ Investments by Peyush Bansal $=0$

iii$)$ Trade receivable $=40,000$

iv$)$ Cash Balance $=3,000$

v$)$ Bank Balance$=20,000$

vi$)$ Share capital $=5,00,000$

vii$)$ Bank Loan $=50,000$

viii$)$ Trade payables $=55,000$

ix$)$ Outstanding Rent $=3,000$

x$)$ Other current liabilities$=40,000$

Part $5$:

The management of the company is asking you to analyse the performance and Cash flow of Pioneer Limited for the year ended $31$ Mar $2022,$ making specific reference to any concerns or expectations regarding future periods, with the help of various ratios to support your analysis.

Part $6$:

The auditor of the company, M$/$s JBL Co$.$ and Associates is planning to conduct an internal control risk audit for the year ended $31$ Mar $2022$ on the request of the new investor$/$ shark to ensure there are no shortcomings in the working and management of the company. You are required to identify and describe any five potential risks related to the internal control of the company and also, what should be the auditor$$s response to address those risks.