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    kmatlhaga's Avatar
    kmatlhaga Posts: 1, Reputation: 1
    New Member

    Oct 18, 2009, 01:23 AM
    Preparing a balance sheeet and income statement from a trial balance
    Trial balance of Mahendra Traders as at 28 feb 2007
    Capital R320 000
    Drawings 40 000
    Land and buildings 440 000
    Motor vehicles 360 000
    Accumulated depreciation on vehicles 108 000
    Furniture & Equipment 60 000
    Accumulated depreciation on furniture and Equipment 18 000
    Debtors control 24 000
    Provision for bad debts 1 200
    Creditors control 46 800
    Inventories 60 000
    Bank 46 000
    Prepaid expenses 1 200
    Accrued income 800
    Loan from citi bank 400 000
    Accrued expenses 24 000
    Revenue 800 000
    Cost of sales 240 000
    Discount received 1 200
    Commission income 1 800
    Rent expense 96 000
    Salaries and wages 80 000
    Water and electricity 36 000
    Telephone 34 000
    Depreciation (18 000 + 3 000) 42 000
    Interest on loan 64 000
    Consumable stores 8 000
    Repairs 32 000
    Municipal rates 55 400
    Bad debts 1 600
    diwanrayan's Avatar
    diwanrayan Posts: 10, Reputation: 1
    New Member

    Oct 18, 2009, 03:05 AM

    you just need to grasp the concept in making Income Statement and Balance sheet. In Income statement you need to figure out the net income of the company, so you add all the revenues find to total for that and then from it less the total expenses will give you the Net Income. You need this net income to find out the Owner's Equity which comes from Owner's Equity Statement. In OES you you add the net income to the owner's equity and less(subtract) the owners withdrawals from it. This Owners equity is used in Balance sheet. Balance sheet as the name suggests Balances the Accounting Equation(Assets=Liabilities + Equity). Here you add all the assets on one side. Add all the liabilities and make addition to it with the output of equity statement. The totals should be equal
    morgaine300's Avatar
    morgaine300 Posts: 6,561, Reputation: 276
    Uber Member

    Oct 18, 2009, 03:24 PM

    You need to be able to classify all of these accounts. Meaning your first step really is to sit down and put them in order, with assets first, etc. (They're already sorta organized, but not quite there.) I would hope your text has examples of the statements, but here are some different examples for you:

    Principles of Accounting Chapter 4
    Multiple-Step Income Statement |
    Sample Balance Sheet |

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