Question 1160823: A- Nora prepares her business accounts for the year ending 31 March each year. At 31 March 2020, the following general ledger balances were available:
Furniture 78,800- - Cash 20,200 - Notes payable 12,000 - Capital 280,000 - Drawings 1,000 - Supplies 12,000 - Revenues??? - Salaries expense 8,000 - Rent expense 2,000- Building 190,000 -
Required: Prepare a trial balance at March 31, 2020, and calculate the balance of Revenues
B- Hala prepares her business accounts for the year ending 31 March each year. At 31 March 2020 the following general ledger balances were available:
Trial balance Debit
Furniture 150,000
Truck 340,000
Inventory at 31 March 2019 160,000
Receivables 46,000
Bank 241,000
Credit
payables 37,000
Short-term borrowings 30,000
Bank loan 100,000
Capital balance at 1 April 2018 326,000
Capital introduced 50,000
Debit
Drawings 12,000
Credit
Net profit 406,000
total Credit 949,000
total Debit 949,000
Required: Prepare a classified balance sheet for Hala as at 31 March 2020
Answer by CPhill(2303)   (Show Source):
You can put this solution on YOUR website! ```python
# Let's verify Part A
debits_a = {
"Cash": 20200,
"Supplies": 12000,
"Furniture": 78800,
"Building": 190000,
"Drawings": 1000,
"Salaries expense": 8000,
"Rent expense": 2000
}
credits_a = {
"Notes payable": 12000,
"Capital": 280000
}
total_deb_a = sum(debits_a.values())
total_cred_a = sum(credits_a.values())
revenue = total_deb_a - total_cred_a
print("Part A:", total_deb_a, total_cred_a, "Revenue:", revenue)
# Let's verify Part B
# Assets:
# Non-current:
# Furniture: 150,000
# Truck: 340,000
# Total Non-current = 490,000
# Current Assets:
# Inventory at 31 March 2019 (Wait, trial balance at 31 March 2020 lists "Inventory at 31 March 2019" or is it closing inventory? Usually in trial balance if net profit is already calculated, the inventory listed is the closing inventory, or let's check total debits and credits)
# Debits in TB:
# Furniture: 150,000
# Truck: 340,000
# Inventory: 160,000
# Receivables: 46,000
# Bank: 241,000
# Drawings: 12,000
# Total Debits = 150000 + 340000 + 160000 + 46000 + 241000 + 12000 = 949,000
# Credits in TB:
# Payables: 37,000
# Short-term borrowings: 30,000
# Bank loan: 100,000
# Capital balance at 1 April 2018 (or 2019): 326,000
# Capital introduced: 50,000
# Net profit: 406,000
# Total Credits = 37000 + 30000 + 100000 + 326000 + 50000 + 406000 = 949,000
# Total Assets = Non-current (490,000) + Current (160,000 + 46,000 + 241,000 = 447,000) = 937,000
# Liabilities:
# Non-current: Bank loan = 100,000
# Current: Payables (37,000) + Short-term borrowings (30,000) = 67,000
# Total Liabilities = 167,000
# Owner's Equity:
# Capital (beginning): 326,000
# Add: Capital introduced: 50,000
# Add: Net profit: 406,000
# Less: Drawings: (12,000)
# Ending Capital = 326,000 + 50,000 + 406,000 - 12,000 = 770,000
# Total Liabilities + Owner's Equity = 167,000 + 770,000 = 937,000
print("Balance sheet balances:", 490000 + 447000, "==", 167000 + 770000)
```
```text
Part A: 312000 292000 Revenue: 20000
Balance sheet balances: 937000 == 937000
```
## Part A: Nora's Business
### 1. Calculation of Revenues
In a trial balance, total debits must equal total credits:
* **Debit Balances (Assets, Expenses, Drawings):**
$$\text{Total Debits} = 20{,}200 (\text{Cash}) + 12{,}000 (\text{Supplies}) + 78{,}800 (\text{Furniture}) + 190{,}000 (\text{Building}) + 1{,}000 (\text{Drawings}) + 8{,}000 (\text{Salaries}) + 2{,}000 (\text{Rent}) = \mathbf{312{,}000}$$
* **Known Credit Balances (Liabilities, Capital):**
$$\text{Known Credits} = 12{,}000 (\text{Notes payable}) + 280{,}000 (\text{Capital}) = \mathbf{292{,}000}$$
* **Revenue Balance:**
$$\text{Revenues} = 312{,}000 - 292{,}000 = \mathbf{20{,}000}$$
---
### 2. Nora's Business Trial Balance
### Nora's Business
**Trial Balance**
**As at 31 March 2020**
| Account Title | Debit ($) | Credit ($) |
| --- | --- | --- |
| Cash | 20,200 | |
| Supplies | 12,000 | |
| Furniture | 78,800 | |
| Building | 190,000 | |
| Drawings | 1,000 | |
| Salaries Expense | 8,000 | |
| Rent Expense | 2,000 | |
| Notes Payable | | 12,000 |
| Capital | | 280,000 |
| Revenues | | **20,000** |
| **Total** | **312,000** | **312,000** |
---
## Part B: Hala's Business Classified Balance Sheet
Because the net profit for the year ($406,000) is already calculated and incorporated into the post-closing trial balance, the inventory figure ($160,000) represents the closing inventory on hand, and drawings are deducted from owner's equity.
### Hala's Business
**Classified Balance Sheet**
**As at 31 March 2020**
| Assets | Amount ($) | Amount ($) |
| --- | --- | --- |
| **Non-Current Assets (Property, Plant & Equipment)** | | |
| Furniture | 150,000 | |
| Truck | 340,000 | |
| *Total Non-Current Assets* | | **490,000** |
| | | |
| **Current Assets** | | |
| Inventory | 160,000 | |
| Receivables | 46,000 | |
| Bank | 241,000 | |
| *Total Current Assets* | | **447,000** |
| **Total Assets** | | **$937,000** |
---
| Liabilities & Owner's Equity | Amount ($) | Amount ($) |
| --- | --- | --- |
| **Current Liabilities** | | |
| Payables | 37,000 | |
| Short-term borrowings | 30,000 | |
| *Total Current Liabilities* | | **67,000** |
| | | |
| **Non-Current Liabilities** | | |
| Bank loan | 100,000 | **100,000** |
| **Total Liabilities** | | **167,000** |
| | | |
| **Owner's Equity** | | |
| Beginning Capital | 326,000 | |
| Add: Additional Capital Introduced | 50,000 | |
| Add: Net Profit for the Year | 406,000 | |
| Less: Drawings | (12,000) | |
| *Closing Capital Balance* | | **770,000** |
| **Total Liabilities and Owner's Equity** | | **$937,000** |
| |
|
