Question

Case No. 4

Omran Company was incorporated in the year 2004 as a joint stock company with a nominal capital of OMR 450,000 in equity shares of OMR 10 each. As of December 31, 2019,            20,000 shares were fully called up. The following balances were extracted from the ledger of the company as on December 31, 2019.

Particulars	Amount (OMR)
Opening stock	86,721
Accounts Payable	21,516
Investment in government securities	114,734
Advertising Expense	1,716
Bad Debts	7,750
Profit and loss account	55,676
Creditors	12,563
Debtors	75,407
Equity Share Capital	200,000
Cash	75,849
Discount on shares	9,189
Discount on issue of shares	3,118
Interim Dividend	1,367
Furniture	10,442
Insurance Expense	12,318
Interest Income	32,854
Notes Payable	1,664
Notes Receivable	10,638
Office Supplies	8,527
Outstanding Expense	37,505
Prepaid Insurance	12,519
Prepaid Rent	15,277
Property and Equipment	38,523
Rent Expense	18,845
Purchases	2,326
Salaries and Wages	126,809
Sales	152,635

Additional information:

• Stock as on December 31, 2019 is OMR 29,000.
• Depreciation on property and furniture at 5%.
• Interest accrued on government securities OMR 750.
• Write off one third discount on shares.
• Provision for bad and doubtful debts OMR 800.

Question No. 4

1. You are required to prepare Trading and Profit and Loss Account of Omran Company for the year ended December 31, 2019.   

2. Discuss the disadvantages of this type of business with regard to ‘concentration of economic power’ and ‘personal interest’. [Answer in 100-150 words]  

1. iii:Using the same information in Case No. 4, prepare the balance sheet as of             

                December 31, 2019.  

Answer 1