The newly appointed accountant of a start$-$up 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 $31,2022$

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

$4,00,000$

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

$30,000$

$17,95,000$

$6,95,000$

Task $1$

Now, the accountant is confused as regards two things:

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

$2.$ 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 $31,2022.$

For Task $2$ onwards, the following notes need to be considered:

a$)$ There is no opening stock for the company.

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

c$)$ Dep per year is calculated at the below rates:

Equipment $-10\%$ on cost

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

d$)$ Patents are not to be amortised

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

f$)$ At the start of the year, Furniture costing $50,000($Carrying value $40,000)$ was sold at a loss of $5,000($No Dep for current year to be accounted for$)$

Task $2$:

You are required to prepare a Profit and loss account for the year ended Mar $31,2022.$

Task $3$:

You are also required to prepare Balance Sheet for Pioneer Limited as on Mar $31,2022.$

Task $4$:

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 $31,2022.$

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$)$ Patents $=35,000$

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$=40,000$

xi$)$ Reserves and Surplus $=0$

Task $5$:

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 internal control risk audit for the year ended $31$ Mar $2022$ 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 auditor$`$s response to address those risks.