1996 year taken as base index rate 100

CPP-Final Accounts (10 Marks) Question: 1_The opening balance sheet and income statement for the year 2016 of Chand LLC., are as follows: LIABILITES OMR ASSETS OMR Share Capital 700,000 Plant & Machinery(new) 600,000 10% Debentures 200.000 Furniture 80.000 Current Liabilities 200,000 Inventory 120.000 Debtors 100.000 Cash 200.000 1,100,000 1,100,000 Income statement for the year ended 31st December 2016 OMR OMR 2.000.000 Particulars Sales Less: cost of goods sold: Opening Inventory (FIFO) Purchases 120.000 1,420.000 1,540.000 140,000 1,400.000 600,000 Closing Inventory Gross Profit Less: Operating expenses Interest on debentures Depreciation on Machinery Depreciation on furniture Net Profit 308,000 20,000 90.000 8,000 426,000 174,000 Debtors and current liabilities remained unchanged throughout the year. Interest on debentures was paid on 31.12.2016. The general price index during the year was as follows: On 1.1.2016 --- --300 On 3.12.216- -360 Average for the year-------320 You are required to prepare the final accounts for the year 1996, after adjusting for the price level changes under CPP method. Conversion method or Restatement of income method