This assignment presents a comprehensive solution to a financial accounting problem for Ajay Ltd. It begins with the preparation of the Statement of Profit or Loss (Income Statement) and the Statement of Financial Position (Balance Sheet) for the year ending March 31, 2019, based on the provided trial balance. The solution meticulously calculates revenues, cost of goods sold, expenses, and ultimately, the net profit, along with the preparation of the balance sheet. Furthermore, the assignment addresses the limitations of both the income statement and the balance sheet, identifying key drawbacks related to accrual accounting, valuation methods, and the representation of a company's financial situation. Finally, the assignment includes a list of references.
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