Mr. Tariq Mehmood wants to prepare his balance sheet as on 31st march, 2019 1. Cash in hand 80,600 2. Creditors 420,000 3. Capital 1600,000 4. Building 1700,000 5. Debtors 200,000 6. Cash at bank 100,000 7. Closing balance 100,000 8. Machinery 400,000 9. Drawings 34,000 10. Net profit 446,000 11. Bills payable 280,000 12. Expenses payable 20,000 13. Good will 100,000 14. Investment 51,400

Net Total Assets = Owner's Equity = $2,012,000

Explanation:

Note: The requirement is to prepare the balance sheet of Mr. Tariq Mehmood as on 31st march, 2019.

This can be prepared as follows:

                             MR. TARIQ MEHMOOD

                                    Balance sheet

                             As on 31st march, 2019

Particulars                                            $                         $                

Intangible Assets

Good will                                        100,000

Investment                                       51,400

Total intangible assets                                              151,400

Fixed Assets

Building                                       1,700,000

Machinery                                     400,000

Total fixed assets                                                     2,100,00

Current Assets

Cash in hand                                  80,600

Cash at bank                                 100,000

Debtors                                         200,000

Closing balance                           100,000    

Total current assets                     480,600

Current Liabilities

Creditors                                      (420,000)

Bills payable                                (280,000)

Expenses payable                        (20,000)  

Negative working capital                                         (239,400)  

Net Total Assets                                                      2,012,000  

Financed by:

Capital                                                                      1,600,000

Drawings                                                                     (34,000)

Net profit                                                                    446,000  

Owner's Equity                                                       2,012,000  

Note:

As it can be seen in the balance sheet above, Net Total Assets is equal to Owner's Equity at $2,012,000 as required for a balance sheet in financial accounting. This shows that the balance sheet has been prepared accurately.

Also, the negative working capital indicates that Current Liabilities of Mr. Tariq is greater than his Current Assets. Therefore, Mr. Tariq does not have enough capital to run the day-to-day operations of his business. It also indicates that his business is being run efficiently and it is unable to cover its current debt adequately.