A newly appointed financial accountant prepared the following profit and loss account and balance sheet of Tulip Ltd:

His efforts made the balance to tally but it has been challenged by the Assessing Officer for the purpose of income assessment.

Discussion Question
Assuming that you are an accounting expert, analyse Profit & Loss Account and balance sheet and comment on it.

Transcribed Image Text:

Particulars To Purchase of Raw Material To Direct Wages To Manufacturing Expenses To Administrative Expenses To Outstanding Expenses To Preliminary expenses Written off To Selling and Distribution Expenses To Loss on Sale of Plant To Interest on Debentures To Net Profit Profit and Loss Account for the year ending March 31, 2010 Particulars 50,000 40,000 2,00,000 1,10,000 30,000 10,000 80,000 5,000 1,40,000 5,000 13,45,000 20,15,000 By Sales By Closing Stock Finished Goods Raw Material 20,00,000 10,000 5,000 20,15,000