Trial Balance Exercise 1

James Darmody is the owner of Bootlegger Trader, a business that sells alcoholic beverages. The following is his business’ trial balance at 31st December 2014:

Trial Balance for the 12 months ended on 31st December 2014AccountsMortgage loanSalesCarriage inwardsBad DebtCapitalInventoryDrawingsOffice expenseDebtorsUtility expenseOffice BuildingCost of Goods SoldSales wagesSales returnCreditor Advertising expenseCashOffice equipmentInterest expensePrepaid rent revenueAccrued Interest Revenue

$

1100900

6950240030004760560

592004465064601030

2900

166001750

800

$2005064000

55800

8400

1810

3000

Additional information occuring on 31 st December 1) The business earned service revenue $1800 but has not received it.2) It also received $4000 of consultation revenue, although it has not provided any services so far.3) It has earned $500 of rent (per month) for the last 6 months.4) It received $800 of the interest revenue owed from a borrower.

Requirements1) Adjust the trial balance based on the additional information.2) Prepare a P&L statement and Balance Sheet based on the adjusted trial balance.

Sample Balance Sheet (Vertical Format)

McGarrigle’s Shop of HorrorBalance Sheet as at 31 st December 2013

Owner’s EquityCapital Add: Net ProfitLess: DrawingsTotal O/E

Represented by:Current Assets Cash at BankDebtorsPrepaid Rent ExpenseAccrued Service RevenueInventory

Non – Current Assets Delivery VehiclesLess: Acc DepreciationFurnitureLess: Acc Depreciation

Total Assets

Current LiabilitiesCreditorsAccrued Sales Staff Salaries

Non-Current Liabilities Mortgage Loan

Total Liabilities

Net Assets

$

1714018400

1003800

41810

62000(29375)37000

(13200)

168001750

$

81250

56425

18550

32000

$

7495024575

(12400)87125

137675

50550

87125