 Dear students, we are going to take up a practical question that how we prepare the financial statements. Now, the question I read here, we got the revenue, we got the cost of goods sold, we got marketing expense, we got the financial expense, we have other income, we have share capital, we have loan, we have retained earnings and we have land cost, building cost, these are the details of basically it's a trial balance, financial fittings, administrative expense, accumulative depreciation and then inventory, trade receivable, deferred tax, all details are there and see the trial balance is there and I am sure in your earlier courses you have studied these how to come up with the trial balance. In fact, if you look into the accounting cycle, we need start from the journal entries, then leisure and balancing the leisure, we prepare the trial balance. So, in fact, in a limited companies also, now this trial balance is ready. Now, after this trial balance, we have some adjustments. Now, these adjustments are basically items which needs to be taken care before we go to prepare the financial statements, because they are afterwards. For example, you are using the light today at 31st December, let's say. The bill is not there, bill will come after 15 days. So, it doesn't mean that you can wait till 15 days and then prepare the account. Now, you can estimate that how much units you have consumed, what is going to be approximate amount of bill. So, we can record those. So, adjustments are there and there are no single way that I can give you all the details of adjustment. Any of the question which we are talking about today, there are few adjustments, but that is not enough. In fact, there are number of adjustments, accrual adjustment, prepaid existence, all that depreciation, bill, the main change, depreciation, how to calculate depreciation, what amount depreciation should be charged, so all these adjustments are there. So, let me just read out these adjustments and explain you exactly how it will be taken into the accounts. The company sold one of the products on 1st July 19, 10 million. The company has agreed to provide after-sale service. Now, this is not the total sales, one of the customer for a period of 4 years, till June 30, 2023, any 4 years, without any extra charge and you are selling goods and giving a service is providing through and you charge for those services extra, like you said. The estimated cost of servicing is 300,000 per annum, 10 million sales you make and your service charges are 300,000 per annum and for 4 years, it comes to 1.2 million, which is included in the sale price. The company charged 25% gross profit margin on services. Now, this is again something to need explanation, there is a markup and there is a margin. Markup is when we are adding to cost. For example, if a goods cost you 100 and you add 25%, so we may say our markup is 25%. But margin is on the sales, if we are making a sales and we want to earn profit of 20%, so it means our cost is 80. So, this thing I am sure in your basic course you have understand this markup and margin thing. Now the accountant of the company is confused as to accounting treatment of this transaction, he has recorded 10 million as a suspense account. Now look here, he is not aware how these service charges, which we are going to serve, which we are going to pay, serve the company for 4 years, how this can be recorded. So what we do, we can do the adjustments later on, I will show you how these will be adjusted. Similarly, loan notes were issued on July 1st, 2019 and issue cost amounting to 1 million have been charged to administrative expense. Now you are not supposed to charge to administrative expense, you know when we are issuing notes and you are not getting the whole amount you are incurring expense, so that expense should be reduced from your notes, because the cash you received is different and expense is different. Now land has been revalued, again it depends, land has been revalued and many assets we do revaluation, technically the land is also very important thing, he says independent value of land 12 million, the resultant gain is not to be recorded in the above trial balance, because it is just done, the revaluation is done and the end of the year, so we need to incorporate it, because the assets value at that particular point of time, so if the management decided to revalue the assets, then the revaluation is done through a proper person, professional, only professional, do remember anybody can not do it, for example if you want to get the valuation of machinery, you have to go the person who manufactured those machines, similarly land value or professionals are different, now depreciation, very careful here, depreciation is 2% on building, it means building life is 50 years, 15% of plant and machinery, 10% furniture and fixtures, however the depreciation for the year has not been recorded in the trial balance, the company charge entire depreciation expense to cost of sales, so these three assets are going to be depreciated, but do remember again, it is a straight line method, if it is not mentioned which method, so it is a straight line method, otherwise we will study data on their different methods of charging depreciation, so here simple whatever is the amount of building cost take 2%, then similarly 15% or machinery and 10% of furniture, then current taxation provided at the rate of 35% of taxable profit, now unless you know the taxable profit, only then you can take 30%, the tax advisor of the company has calculated current year's taxable profits, he has given you the figure that this is going to be your taxable profit, so you charge 35% of that and make a provision, similarly the temporary differences are increased by 10 million, now this is again a standard that if there are temporary differences like the depreciation to charge and the depreciation allowed by the government, by the tax laws, so if there is a difference, we call it temporary difference, if there are temporary differences, on that difference we work out the different tax account and one thing which is important about the tax, it is not going to be paid there and then, it is going to be adjusted in future, now requirement is simple, we need to prepare all those 3 statements, we are not preparing the cash flow statement in this particular question because cash flow statement is another topic we will discuss later, now income statement and change in equity statement and statement of financial positions of the 3 statements we are going to produce out of these questions one by one, thank you very much.