The Dharma Initiative Ltd. sells books on religion and spirituality. Their trial balance for the 6-month period ending June 30, 2014 shows revenues of $32830 from sales and $32500 from consultation revenue. Expenses include $76900 for promotional expenses, $42000 for salaries, $49000 for general expenses, and depreciation of $2400 for computer equipment and building. The balance sheet will show $74800 in bank loans and $6330 in creditors, with $87900 in capital and $13700 in bank overdraft.

1. Trial Balance Exercise 6
Walt and Mike are the owners of the Dharma Initiative Ltd., a business that sells books
on religion, philosophy and spirituality. The following is their trial balance for the 6-
month period that ended on 30th
June 2014:
Accounts
Sales
Bad debt
Capital
Inventory
Drawings
Promotional expense
Debtors
Stationery expenses
Computer Equipments
Acc. Depreciation – C.E.
Cost of Goods Sold
Sales assistant’s wages
Sales Return
General expenses
Bank Overdraft
Interest expense
Bank Loan
Custom Duty
Creditor
Consultation revenue
Prepaid rent revenue
Building
Acc. Depreciation - Building
$
550
32830
12040
3080
37400
3810
76900
42000
7400
1200
1790
960
640
49000
$
74800
87900
13700
6330
32500
20700
2670
7000
24000
Additional information
1) The business earned monthly rent revenue of $1000 during the 6-month period.
2) Utility expense incurred is $4000, which remains unpaid.
3) The business earned another $1330 of consultation revenue, which is yet to be
received.
4) Computer equipments are depreciated under the RB method at 30% p.a. The building
is depreciated under SL method with a scrap value of $1000 and useful life of 40 years.
Prepare the P&L statement and balance sheet for the partners.