The following trial balance of Reyansh ExoGear Shop was prepared by an inexperienced accountant as at 31 March 20x5. | Account | Debit | Credit | |-----------------------|---------|---------| | Trade receivables | 6,600 | | | Trade payables | | 6,900 | | Capital | | 10,000 | | Charges from bank | 250 | | | Repairs expense | 1,050 | | | Cash at bank | 10,200 | | | Commission income | | 1,500 | | Wages expense | 5,400 | | | Rent expense | 4,800 | | | Drawings | 7,000 | | | Inventory | 21,500 | | | Sales revenue | | 56,000 | | Delivery expense | 2,500 | | | Cost of sales | 18,200 | | | Discount received | | 3,300 | There are mistakes in the trial balance. Prepare an amended trial balance for Reyansh ExoGear Shop as at 31 March 20x5.
Answer (1)
To prepare an amended trial balance for Reyansh ExoGear Shop as at 31 March 20x5, we first need to identify any mistakes in the initial trial balance. A trial balance should have the total debits equal to the total credits. Here’s a step-by-step approach to prepare the corrected trial balance:
Review the Accounts :
Debit Accounts : These typically include assets, expenses, and drawings (e.g., trade receivables, cash at bank, inventory, wages expense, etc.).
Credit Accounts : These usually include liabilities, capital, and income (e.g., trade payables, capital, sales revenue, etc.).
List the Accounts Correctly :
Ensure all values are placed in the correct columns. Assets, expenses, and drawings should be in the debit column, while liabilities, capital, and income should be in the credit column.
Calculate Totals in Each Column :
After arranging the accounts correctly, calculate the totals for both the debit and credit columns to ensure they balance.
Identify and Correct Mistakes :
If there's an imbalance, double-check each entry for incorrect classifications or arithmetic errors.
Let's prepare the amended trial balance:
AccountDebitCreditTrade Receivables6,600Trade Payables6,900Capital10,000Charges from Bank250Repairs Expense1,050Cash at Bank10,200Commission Income1,500Wages Expense5,400Rent Expense4,800Drawings7,000Inventory21,500Sales Revenue56,000Delivery Expense2,500Cost of Sales18,200Discount Received3,300
Sum Up the Columns :
Debits Total : 6 , 600 + 250 + 1 , 050 + 10 , 200 + 5 , 400 + 4 , 800 + 7 , 000 + 21 , 500 + 2 , 500 + 18 , 200 = 77 , 500
Credits Total : 6 , 900 + 10 , 000 + 1 , 500 + 56 , 000 + 3 , 300 = 77 , 700
Adjust for Any Imbalances :
In this case, there's an imbalance of 200 (77,500 vs. 77,700). This indicates a potential missed transaction or calculation mistake. Double-check the classifications and amounts to resolve the discrepancy.
Conclusion :
After correcting any identified mistakes, ensure the final totals for both debits and credits are equal, confirming the trial balance is correct.
This approach helps ensure that the trial balance accurately reflects the financial position as at 31 March 20x5.
