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1. • CommentAuthorjahanzaib
   • CommentTimeApr 21st 2008

    
   Friends I have question. Please help me
   Question
   United Chemical is one of the leading organizations in the fertilizer sector. The company presents its financial statements every year on December 31. The company wants to open its new office in new jersey, for this the owner of the company has purchased a new office costing Rs. 90,000 half of it was paid in cash and half was purchased on credit. The management of the company is also interested in the expansion of the plant. The company has a spare piece of land that was purchased several years ago costing Rs. 150,000. Another company has offered the business to purchase that piece of land at its current market price Rs. 200,000. The company is running its business successfully. Its sales stand at Rs. 500,000 for the year ended December 2006. The accounts receivables are Rs. 100,000 and cash
   balance is Rs. 500,000 for the year ended December 2006.
   The owner also draws an amount of Rs. 20, 000 for the personal use. The company pays the wages of the employees at the end of each month. The total balance of the wages for the year ended December 2006 was Rs. 100,000. The capital of the company was Rs. 270,000 for the year ended December 2006.
   
   Requirements:
   1. What is the accounting period of the company? (2)
   2. Prepare a Trial Balance of the company for the year ended December 31 2007. (6)
   3. According to the rules of the GAAP, what will be the cost of land in the Balance
   Sheet of the company? (2)