You have been asked to help prepare the statement of financial position of Dalmatian Ltd for the year

ended $31$ March $2011.$ The company's trial balance as at $31$ March $20$X$1$ is shown below. Further

information relating to the financial statements is also provided.

Dalmatian Ltd: Trial balance at $31$ March $2011$

Further information:

i$)$ The share capital of the company consists of ordinary shares with a nominal value of P$1.$

ii$)$ Inventories at close of business consist of the following items at cost$.$ Their comparative net realizable values are as follows:

Cost NRV

P$000$ P$000$

Furs $500600$

Products $10075$

Toys $5060$

$650735$

iii$)$ Depreciation is to be provided for the year ended $31$ March $2011$ as follows:

Property $10\%$ per annum Straight line basis

Plant and equipment $25\%$ per annum Diminishing balance basis

iv$)$ Trade receivables include a debt of P$75,000$ that is to be written off in full. A general allowance of $5\%$ of the remaining debt is required.

v$)$ Annual insurance of P$12,000$ has been paid in full for the year ended $31$ December $2011.$ This payment is included in retained earnings in the trial balance.

vi$)$ All of the operations are continuing operations.

$**$ Please help with explaining how to calculate adjustment $($ii$)$ of the Statement of Financial Position.