Trial Balance Adjustments 2017

Study Notes

The trial balance shows the individual debit and credit balances of various accounts as of March 31, 2017
The total debit balances are equal to the total credit balances, meaning the accounting equation (Assets = Liabilities + Equity) holds true
There are initial balances for inventory (stock), purchases, sales, and other expenses (wages, carriage, furniture, salaries, rent, trade expenses, debtors, plant and machinery, cash at bank, patents, bills receivable, and bad debts)

The text requires various adjustments to be made to the balances in the trial balance.
These adjustments include depreciation, provision for doubtful debts, and income tax which are necessary for accurate financial reporting.

Depreciation is calculated based on the percentage specified for each asset:
Plant and Machinery are depreciated at 10%
Furniture is depreciated at 5%
Patents are depreciated at 5%
Provision for bad debts is often made as a percentage of outstanding debtors
Income tax is a significant expense for companies, and the text requires a provision for this liablity, which is calculated based on the tax rate specified

The balance sheet presents the company's financial position as of a specific date, in this case, March 31, 2017
It details the company's assets, its liabilities, and its equity
Its core is the accounting equation, where assets equal liabilities plus equity

The statement of profit and loss, also called an income statement, shows a business's financial performance over a specific time period
It details the company's revenues and expenses, and ultimately determines the company's net profit or loss during the period
In the context of the provided text, the statement of profit and loss is for the year ending March 31, 2017

Each company presented in the text has its own specific details of its balance sheet and statement of profit and loss:
- IV/1-36
- ABC Silver Ore Co.Ltd.
- Zee Ltd.
- P.K.Limited