Question

The clerk of firm has incorrectly drafted the following trail balance. Draft the correct trail balance from the details

1. Capital Cr 60,000
2. Opening stock Dr 5000
3. Discount allowed Cr 500
4. Commission received Cr 700
5. Fixed assets Cr 60,000
6. Sales Dr 85,000
7. Purchases Cr 45,000
8. Return outward Cr 1000
9. Return inward Dr 2000
10. Carriage inward Cr 600
11. Carriage outward Cr 700
12. Wages and salary Dr 25000
13. Bills receivable Dr 7000
14. Debtors Dr 9000
15. Bills payable Cr 7000
16. Rent Dr 3000
17. Interest paid cr 2000
18. Cash Dr 800
19. Creditors Dr 6,900
20. Closing stock 33,800

Answer 1

Imbalance found: credits exceed debits by 190,500. Analyze credit accounts for double entries, miscalculations, or missing debits. Correct error and adjust entries to balance trail balance (debits = credits).

The provided information indicates an imbalance in the trial balance as the total debits and credits do not match. Here's how to draft the correct trail balance:

Step 1: Calculate the total debits and credits.

Debits:

Opening Stock (3) + Purchases (7) + Return Inward (9) + Carriage Inward (10) + Wages and Salary (12) + Rent (16) = 5,000 + 45,000 + 2,000 + 600 + 25,000 + 3,000 = 80,600

Credits:

Capital (1) + Discount Allowed (3) + Commission Received (4) + Fixed Assets (5) + Sales (6) + Return Outward (8) + Carriage Outward (11) + Bills Receivable (13) + Debtors (14) + Bills Payable (15) + Interest Paid (17) + Cash (18) + Closing Stock (20) = 60,000 + 500 + 700 + 60,000 + 85,000 + 1,000 + 700 + 7,000 + 9,000 + 7,000 + 2,000 + 800 + 33,800 = 271,100

Step 2: Identify the difference and adjust accordingly.

The total credits exceed the total debits by 190,500 (271,100 - 80,600). This suggests an error somewhere in the credit column.

Step 3: Analyze the credit accounts for potential errors.

Several possibilities exist for the error:

Double entry: An account might be wrongly listed twice in the credit column.

Miscalculation: A mathematical error might have inflated a credit amount.

Missing debit: A debit entry corresponding to a credit entry might be missing.

Step 4: Investigate and correct the error.

Without further information or the video of the classroom discussion, it's impossible to pinpoint the exact error. However, you can analyze the accounts mentioned in the video about Daniel and Bob to see if any entries match the potential error descriptions.

Once you identify the incorrect entry, adjust it accordingly to ensure the total debits and credits match. This will give you the correct trail balance for the firm.