AccountancyNEB 2080
The trial balance of a company as on 31st December last year is given below. Particulars Dr. (Rs.) Cr. (Rs.) : : : Sales 320,000 Purchase 160,000 Opening stock 20,000 Prepaid insurance 12,000…
5The trial balance of a company as on 31st December last year is given below.
| Particulars | Dr. (Rs.) | Cr. (Rs.) |
|---|---|---|
| Sales | - | 320,000 |
| Purchase | 160,000 | - |
| Opening stock | 20,000 | - |
| Prepaid insurance | 12,000 | - |
| Capital | - | 150,000 |
| Creditors | - | 30,000 |
| Debtors | 40,000 | - |
| Salary | 96,000 | - |
| Cash | 22,000 | - |
| Fixed assets | 150,000 | - |
| Total | 5,00,000 | 5,00,000 |
Additional information: i) Prepaid insurance was expired : Rs. 8,000 ii) Depreciation charged on fixed assets : Rs. 12,000
Required: Work sheet [5]
Answer
Worksheet for the Company as on 31st December
| Particulars | Trial Balance (Dr.) | Adjustments (Dr.) | Adjustments (Cr.) | Adjusted Trial Balance (Dr.) | Income Statement (Dr.) | Balance Sheet (Dr.) | Income Statement (Cr.) | Balance Sheet (Cr.) |
|---|---|---|---|---|---|---|---|---|
| Sales | - | - | - | - | - | - | 320,000 | - |
| Purchase | 160,000 | - | - | 160,000 | 160,000 | - | - | - |
| Opening Stock | 20,000 | - | - | 20,000 | - | 20,000 | - | - |
| Prepaid Insurance | 12,000 | - | 8,000 | 4,000 | - | 4,000 | - | - |
| Insurance Expense | - | 8,000 | - | - | 8,000 | - | - | - |
| Capital | - | - | - | - | - | - | - | 150,000 |
| Creditors | - | - | - | - | - | - | - | 30,000 |
| Debtors | 40,000 | - | - | 40,000 | - | 40,000 | - | - |
| Salary | 96,000 | - | - | 96,000 | 96,000 | - | - | - |
| Cash | 22,000 | - | - | 22,000 | - | 22,000 | - | - |
| Fixed Assets | 150,000 | - | - | 138,000 | - | 138,000 | - | - |
| Depreciation on Fixed Assets | - | 12,000 | - | - | 12,000 | - | - | - |
| Total | 500,000 | 20,000 | 8,000 | 500,000 | 276,000 | 224,000 | 320,000 | 200,000 |
Explanation of Adjustments:
- Prepaid Insurance Expired (Rs. 8,000):
- Dr. Insurance Expense (Income Statement)
- Cr. Prepaid Insurance (Balance Sheet)
- Depreciation on Fixed Assets (Rs. 12,000):
- Dr. Depreciation Expense (Income Statement)
- Cr. Fixed Assets (Balance Sheet)
Final Adjusted Trial Balance Totals:
- Income Statement (Dr.): Rs. 276,000
- Income Statement (Cr.): Rs. 320,000
- Balance Sheet (Dr.): Rs. 224,000
- Balance Sheet (Cr.): Rs. 200,000
Note: The worksheet ensures that all adjustments are properly recorded before preparing the final financial statements. The Income Statement will show Gross Profit = Rs. 160,000 (Sales - Purchase) and Net Profit = Rs. 44,000 (Total Income - Total Expenses). The Balance Sheet will reflect the adjusted values of assets, liabilities, and capital.
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