Sadaf manufacturing store is functioning in Karachi from last ten years. They have three retail store where they provide home groceries and other relevant products. Their business is smoothly functioning in good competitive environment. Liquidity position of company is stable and have good market reputation so financial institutions are not reluctant to provide any financial assistance whenever required by the company.

Short term loan was taken at 11% rate per year and long term loan was taken at 11.5%. Marketable securities will earn 9% interest to company.

Marvi Chain Store
BALANCE SHEET
As at December 31, 2019
cash	375000	Ac payable	65000
A/c receivable	250000	short term loan	100000
Marketable sec	25000	bill payable	22,700
Inventory ending	27500	tax payable	12815
Prepaid Rent	8000	Accrued expenses	5000
Supplies	15000	total Current liabilites	160,515
Total Current Assets	700500
		Long term loan	50,000
			210515
		Owner's equities
		capital	222,300
		Net Profit	570,935
plant	80000		793,235
Less: acc. dep	13200
	66800
Machinery	325000
Less:acc. dep	21750
	303250
Assets	1003750	Equities	1,003,750

Instruction:

1. Being a business student who have completed basic finance subject, please review this Balance Sheet and suggest what errors you found in it.
2. What this company should do to improve its performance?
3. You can take necessary assumptions keeping in mind nature of business

Answer rating: 100% (QA)

a the balance sheet contains many errors and violation of IAS 1 presentation of accounting statements in several ways The following errors were identi... View the full answer