Practice Problem 1: Prepare the Income Statement of XYZ Ltd for the year ended on 2022 with the

help of the information given below:

XYZ Balance Sheet

2021 2021
Owners’ Equity and Liabilities Amt Amt Amt Amt
Owners’ equity
Shareholders’ Equity 170000 170000
Retained earnings 25000 195000 38000 208000
Non-Current liabilities:
Bank loan 54500 124500
Current liabilities:
Short term loan 5500 3000
Account Payables 72000 47000
Rent Outstanding 10000 2000
TOTAL 3,37,000 3,84,500
Assets
Non-Current assets
Land 100000 80000
Building 82500 82500
Less: AD on Building 40000 42500 42000 40500
Plant & machinery 64500 64500
Less: AD on P&M 20000 44500 21000 43500
Investment in securities 30000 30000
Current assets
Cash 40000 110500
Account Receivables 25000 30000
Inventories 50000 45000
Prepaid Insurance 5000 5000
TOTAL 3,37,000 3,84,500

Cash receipts and Payments during the year

Cash Receipt Amt Cash Payments Amt
Cash sales 40000 Cash Purchase 10000
Collection from account
receivables 15000 Payment to accounts payables 40000
Loan from bank 70000 Short term loan repaid 2500
Land Sold 20000 Office expenses 600
Total 145000 Wages 800
Interest 2000
Salaries 1000
Dividend 5600
Rent paid 12000
Total 74500
Practice Problem 2: