Trial Balance and Balance Sheet-Session Accounting Equation- Sums for Session.pptx
1. Example 1: Ajit set up Green Shoots company, a farming consultancy, in October 20XX.
The transactions in the first month were as follows:
a) Ajit invested cash in the company’s share capital Rs.10,000
b) Took an interest free loan from a friend Rs.2000
c) Bought equipment for cash Rs.9000
d) Paid insurance for one year Rs.480
e) Bought supplies on credit Rs.700
f) Billed customers for services Rs.1400
g) Provided services for cash Rs.3200
h) Received advance from a customer Rs.150
i) Paid for supplies in (e) on account Rs.300
j) Paid salary for the month Rs.800. Note: Ajit is also an employee of the
company
k) Collected receivables Rs.1,100
Required: 1. Record the transactions directly in the accounts
2. Prepare the October 31 trial balance
2. A + E L + Owner’s Equity + Rev
Sr.
No.
Cash Equip. Supplies A/c Rec Insu.
Prem
Sal
Exp
F. Loan A/P
Sup.
Share
Cap
Adv
Recvd
Reven
ue
a 10000 10000
b 2000 2000
c -9000 9000
d -480 480
e 700 700
f 1400 1400
g 3200 3200
h 150 150
i -300 -300
j -800 800
k 1100 -1100
5870 9000 700 300 480 800 2000 400 10000 150 4600
ANSWERS:
3. A + E L + Owner’s Equity + Rev
Sr.
No.
Cash Equip. Supplies A/c Rec Insu.
Prem
Sal
Exp
F. Loan A/P
Sup.
Share
Cap
Adv
Recvd
Reven
ue
a 10000 10000
b 2000 2000
c -9000 9000
d -480 480
e 700 700
f 1400 1400
g 3200 3200
h 150 150
i -300 -300
j -800 800
k 1100 -1100
ANSWERS:
17. Example 2
• a ) Mahesh started business with cash Rs. 60,000 and Goods Rs. 30,000.
• b) Purchased goods for cash Rs. 40,000 and on Credit Rs. 25,000.
• c) Purchased goods from Ram of Rs. 20,000. Paid the amount in Cash and received 2 % cash discount.
• d) Goods costing Rs. 33000 sold at a profit of 33*1/3 %. Three fourth payment received in cash.
• e) Sold goods to Gopal for Rs. 20000. Received cash from Gopal Rs. 18000 and discount allowed to him 2000.
• f) Paid telephone bill amounting to Rs. 800.
• g) Goods Sold to Harish on credit Rs. 2000
• h) Harish returned goods 500.
• i) Closing inventory Rs 50000 (Use only for estimating COGS and Balance Sheet purpose, no need to make entries).
18. A + E L + Owner’s Equity + Rev
Sr.
No.
Cash Open.
invent
Purchase
s
A/R Dist
Allow
Tel.
bill
Sales
Ret.
Capital A/P Dist.
Rece.
Sales
a 60000 30000 60000+
30000
b -40000 40000+
25000
25000
c -19600 20000 400
d 33000 11000 44000
e 18000 2000 20000
f -800 800
g 2000 2000
h -500 500
50600 30000 85000 12500 2000 800 500 90000 25000 400 66000
ANSWERS:
19. a) Mahesh started business with cash Rs. 60,000 and Goods Rs.
30,000.
CASH DR 60000
opening inventory DR 30000
CAPITAL CR 90000
20. b) Purchased goods for cash Rs. 40,000 and on Credit Rs. 25,000
purchase a/c DR 40000
purchase a/c DR 25000
CASH CR 40000
A/P OR CREDITORS CR 25000
21. c) Purchased goods from Ram of Rs. 20,000. Paid the amount in Cash
and received 2 % cash discount.
purchase a/c DR 20000
CASH CR 19600
DISCOUNT RECEIVED CR 400
22. d) Goods costing Rs. 33000 sold at a profit of 33*1/3 %. Three fourth payment
received in cash
CASH DR 33000
A/R DR 11000
Sales A/C CR 44000
23. e) Sold goods to Gopal for Rs. 20000. Received cash from
Gopal Rs. 18000 and discount allowed to him 2000.
CASH DR 18000
DISCOUNT ALLOWED DR 2000
Sales A/C CR 20000
24. f) Paid telephone bill amounting to Rs. 800.
Telephone bill dr 800
cash cr 800
25. g) Goods Sold to Harish on credit Rs. 2000
Aa/r dr 2000
Sales a/c cr 2000
30. Example: 3 Pradeep and Selvam set up Venus Photoshop Company in December 20XX. The
transactions in the first month were as follows:
a) Pradeep and Selvam invested cash in the company’s share capital Rs.2500 each
b) Took a bank loan Rs.1000
c) Paid insurance for the month Rs.60
d) Bought supplies on credit Rs.350
e) Billed customers for services Rs.2300
f) Used supplies Rs.270
g) Paid equipment rent for the month Rs.500
h) Collected receivables Rs.1900
i) Repaid bank loan Rs.700
j) Paid interest on bank loan Rs.100
k) Paid a dividend Rs.200
Required: 1. Record the transactions directly in the accounts
2. Prepare the December 31 trial balance
31. A + E L + O equity + Rev
Sr.
No.
Cash Supplies A/c
Rec
Div. Bank
Int
Insu.
Exp
Sup.
Exp.
Euip
Rent
B.
Loan
A/P
Supp
.
Partner’s
Capital
Reven
ue
P S
a
b
c
d
e
f
g
h
i
j
k
32. A + E L + O equity + Rev
Sr.
No.
Cash Supplies A/c
Rec
Div. Bank
Int
Insu.
Exp
Sup.
Exp.
Euip
Rent
B.
Loan
A/P
Supp
.
Partner’s
Capital
Reven
ue
P S
a 5000 2500 2500
b 1000 1000
c -60 60
d 350 350
e 2300 2300
f -270 270
g -500 500
h 1900 -1900
i -700 -700
j -100 100
k -200 200
34. Income & Expenditure Statement
Particulars Amount
Sales 2300
Less:
Bank Interest
Supply Expense
Insurance Expense
Equipment Rent
100
270
60
500
Profit/(Loss) 1370
Dividend Expense 200
Reserve and Surplus 1170
Balance Sheet
Equity & Liabilities:
Owner’s fund
Reserves & Surplus
Non – Current Liabilities:
Bank Loan
Current Liabilities :
Account payable (Supplies)
5000
1170
300
350
Total 6820
Assets:
Current Assets:
Supplies
Cash
Account Rec.
Receivable
80
6340
400
Total 6820
35. Example : 3.3 Rhetorica Company conducts public speaking classes. The following are the account
balances om March 31, 20XX
Building Rs. 10,000
Supplies Rs. 900
Trade Receivables Rs. 2100
Prepaid Insurance Rs.600
Trade Payables Rs.1700
Share Capital Rs.10,000
Revenue from Services ?
Salaries Expense Rs. 5800
Electricity Expense Rs. 350
Insurance Expense Rs. 50
36. Particulars Debit Credit
Building 10000
Supplies 900
Trade Receivables 2100
Prepaid Insurance 600
Trade Payables 1700
Share Capital 10000
Revenue From Services 8100
Salaries Expense 5800
Electricity Expense 350
Insurance Expense 50
Total 19800 19800
ANSWER
37. Income Statement:
Revenue from Services: 8100
Less: Salaries Expenses: 5800
Electricity Expenses: 350
Insurance Expenses 50 6200
Net Profit 1900
Liabilities Amount Assets Amount
Share Capital 10000 Building 10000
+Profit 1900 11900 Supplies 900
Trade Payables 1700 Trade Receivables 2100
Prepaid Insurance 600
13600 13600
Balance-sheet