The following accounts balancc have been taken from the book of Riffat Traders o
ID: 2489191 • Letter: T
Question
The following accounts balancc have been taken from the book of Riffat Traders on March 31, 2016: Cash Rs. 25,000. Drawing Rs. 20,000. Sales Rs. 100,000, Sales Returns and Allowance Rs. 5,000, Purchases Rs. 60,000, Freight-in Rs 10,000, Purchase Discount Rs. 6,000, Advertising Expense Rs. 15,000, Rent Income Rs. 24,000. Notes Receivable Rs 30,000, Accounts Receivable Rs. 50,000, Allowances for Bad Debts Rs. 6,000, Supplies Rs 15,000, Prepaid Insurance Rs. 10,000, Equipment Rs. 70,000, Allowance for Depreciation-Equipment Rs 4.000. Land Rs. 60,000, Accounts Payable Rs. 45,000, Accrued Salary Rs. 25,000, Capital Rs. ?. Required: Prepare Pre-closing trial balancc on March 31, 2016.Explanation / Answer
Capital will be a Credit item in Trial balance which will be the balancing figure for debit and credit sides, as shown below.
DR $ CR $ Cash 25,000 Sales 1,00,000 Drawings 20,000 Purchase discount 6,000 Sales Returns & Allowance 5,000 Rent income 24,000 Purchases 60,000 Allowance for bad debt 6,000 Freight-in 10,000 Allowance for depreciation 4,000 Advertising expense 15,000 Accounts payable 45,000 Notes receivable 30,000 Accrued salary 25,000 Accounts receivable 50,000 Capital (Balancing figure) 1,60,000 Supplies 15,000 Prepaid insurance 10,000 Equipment 70,000 Land 60,000 TOTAL 3,70,000 3,70,000