SPJIMR|PGDM|2021|FINANCIAL ACCOUNTING AND ANALYSIS

Trial Balance and Financial Statements

1. (2.10) In June 2021, Prasanna set up a debt rating services as a sole proprietorship. At the end of the
month, the business had the following balances: Cash – Rs. 3,000, Trade Receivables – Rs. 2,000,
Office Supplies – Rs. 1,000, Office Equipment – Rs. 5,000, Trade Payables – Rs. 1,000 and
Prasanna’s Capital – Rs. 10,000. The following transactions took place in July:
i. Paid June Salaries – Rs. 400
ii. Billed clients for services – Rs. 2,000
iii. Bought office equipment for cash – Rs. 1,000
iv. Bought office supplies on credit – Rs. 100
v. Withdrew cash for personal use – Rs. 1,000
vi. Provided services for cash – Rs. 18,000
vii. Prasanna invested in the business – Rs. 15,000
viii. Collected payments for past invoices – Rs. 1,500
ix. Paid electricity expense – Rs. 300
x. Paid for past purchases of office supplies – Rs. 500
xi. Paid July salaries – Rs. 400

a. Prepare an Opening Balance Sheet

b. Prepare a Trial Balance giving effect to the transactions above

2. (2.11) In November 20XX, Asif Mandiwala set up a weather forecasting service. At the end of the
month he had the following balances: Cash Rs. 4,100; Trade Receivables Rs. 3,400; Office supplies
Rs. 1,100; Office Equipment Rs. 10,000; Bank Loan Payable Rs. 1,900; Mandiwala’s Capital
Rs.16700. The following transactions took place in December:
i. Provided services on credit Rs. 6,100
ii. Took a bank loan Rs. 6,000
iii. Collected payments from clients billed in November, Rs. 2,800
iv. Paid interest on bank loan, Rs.100
v. Bought office supplies for cash, Rs.800
vi. Billed customers for services Rs. 1,700
vii. Cancelled a bill in (i) because of customer complaint, Rs. 100
viii. Paid staff salaries for November, Rs.1,600

a. Prepare an Opening Balance Sheet

b. Prepare a Trial Balance giving effect to the transactions above
SPJIMR|PGDM|2021|FINANCIAL ACCOUNTING AND ANALYSIS
Financial Statements
1. The trial balance of Navin Packaging Ltd. for the current reporting period is as follows:
Trial balance as on 31.12.20X1 (Amount in Rs.)
Packaging Equipment 30,000
Accumulated Depreciation on 9,000
Packaging Equipment
Office equipment 10,000
Accumulated Depreciation on 3,000
Office Equipment
Packaging supplies 6,280
Office supplies 2,650
Trade receivables 2,170
Cash 8,820
Prepaid rent 9,600
Bills payable 2,500
Trade payable 1,360
Advance received from clients 1,800
Share capital 35,000
Retained earnings 1,350
Dividends 2,500
Revenue from services 41,260
Salaries expense 14,910
Electricity expense 2,340
Advertisement expense 4,800
Telephone expense 1,200
Total 95,270 95,270

Following additional information is available:

a. Estimated depreciation on packaging equipment, Rs. 3,000
b. Estimated depreciation on office equipment, Rs. 1,000
c. Inventory of packaging supplies, Rs. 2,360
d. Inventory of office supplies, Rs. 1,190
e. Prepaid rent includes rent for Jan to March 20X2 at Rs. 840 per month.
f. Accrued interest on the bill payable at 15% p.a. from September 20X1
g. Services provided to clients that had been paid for in advance but not taken as revenue, Rs. 1040.
h. Revenue receivable, Rs. 1,390
i. Unpaid salaries, Rs. 970
j. Prepaid advertisement , Rs. 400
k. Unpaid telephone expenses, Rs. 200
l. Estimated income tax expenses, Rs. 1,600

Prepare a statement of profit and loss, a statement of retained earnings and a balance sheet