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Prepare vertical balance sheet for the following trail balance.
| Dr. ($) | Cr. ($) | |
|---|---|---|
| Premises | 26000 | |
| Furniture | 14000 | |
| Vehicles | 7000 | |
| Inventory | 3000 | |
| Bank | 5300 | |
| Capital | 45000 | |
| Loan from bank | 8000 | |
| Trade receivables | 1500 | |
| Trades payables | 2800 | |
| Net profit | 10000 | |
| Drawings | 9000 | |
| 65800 | 65800 |
Solution
The solution is given below −
We know the equation => Assets = capital + liabilities
In vertical style, it is re written as −
Non-current assets + current assets = capital + non-current liabilities + current liabilities (Or)
Non- current assets + current assets – current liabilities = capital + non- current liabilities
| $ | $ | |
|---|---|---|
| Balance sheet As on 31st March 2015 | ||
| Non-current assets | ||
| Premises | 26000 | |
| Furniture | 14000 | |
| Vehicles | 7000 | |
| 47000 | ||
| Current assets | ||
| Inventory | 3000 | |
| Trades receivables | 1500 | |
| Bank | 5300 | |
| 9800 | ||
| Current liabilities | ||
| Trade payable | (2800) | 7000 |
| Net current asset | 54000 | |
| Non- current liabilities | ||
| Loan from bank | (8000) | |
| 46000 | ||
| Capital | 45000 | |
| Net profit | 10000 | |
| Drawings | (9000) | |
| 46000 | ||
Updated on: 13-Aug-2020
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