Question

Case 2:

National Bank of Oman SAOG “NBO” was the first incorporated bank in the Sultanate of Oman(“Oman”) established in 1973 as a joint-stock company, providing conventional and Islamic banking services. The Bank’s shares are listed on the Muscat Securities Market (“MSM”). The Bank operates via five main segments, namely, retail banking, corporate banking, investment banking, treasury and international banking, and Islamic banking.

You are provided with the ledger balances of the National Bank of Oman as of 31st March 2018 and asked to prepare its final accounts. You are also required to consider the following the year-end adjustments - It was decided that the bank to create a provision for doubtful debts OMR 2,000 and provide 5% deprecation on Computers; Bank has not included the locker rent OMR 1,000 that was received in advance, and law charges are still outstanding for OMR 2,500; Bills purchased and discounted during the year was OMR 21,000 and at the end of the period when they calculated the rebate on bills discounted it was OMR 2,500.

Particulars	Amount OMR	Particulars	Amount OMR
Salaries paid	25,000	Computers	20,000
Auditor fees	12,500	Interest on Cash credit	75,000
Bills discounted and purchased	21,000	Cash at Central bank	60,000
Interest on balances with central bank	90,000	Printing and postage	500
Profit on investment	2,000	Interest on savings account	22,000
Discount on bills discounted	11,000	Law charges	1,000
Rent and taxes	10,000	Government securities	253,000
Share Capital 10,000 @ RO 30 each	300,000	Maintenance and repairs	16,000
Locker Rent	6,000	Share Premium	25,000
Cash credits	100,000	Interest on current account	38,000
Borrowings from other banks	14,000	Insurance	1,000
Investment in mutual funds	100,000	Non-Banking assets	10,000
Transfer fees paid	2,000	Motor vehicle	20,000
Money at call and short notice	35,000	Cash in hand	26,000
Saving Deposits	150,000	Current Deposits	100,000

You are asked to prepare:

1. Income statement for NBO as on 31st March 2018                        
2. Balance Sheet with necessary notes as on 31st March 2018          

Answer 1