FA – May 2015 – L1 – Q4b – Trial Balance: Usefulness and Limitations

Prepare a trial balance from the extracted balances of Omoba Enterprises and recompute the entity’s capital for the period under review.

Question

The following balances were extracted from the books of Omoba Enterprises as at 31 December 2013:

Details	N’000
Accumulated depreciation	85,000
Administrative expenses	775,000
Accounts payables	585,000
Subscription	15,000
Rent and rates	130,000
Accounts receivables	475,000
Postage and stationery	125,000
Newspapers & periodicals	40,000
Utility	35,000
Allowances for Bad debt	85,000
Property, plant and equipment	925,000
Retained earnings	575,000
Audit fees	85,000
Revenue	2,500,000
Cost of sales	800,000
Other income	82,000
Cash and bank balances	882,000
Capital	375,000

Required:
i. Use the information above to extract a trial balance of Omoba Enterprises as at 31 December, 2013. (12 Marks)
ii. Use the information below to recompute the entity’s capital for the period under review:

Drawings: N250,000
Profit for the period: N315,000

Answer

(i) Trial Balance of Omoba Enterprises as at 31 December 2013:

Details	Debit (N’000)	Credit (N’000)
Accumulated depreciation		85,000
Administrative expenses	775,000
Accounts payables		585,000
Subscription		15,000
Rent and rates	130,000
Accounts receivables	475,000
Postage and stationery	125,000
Newspapers & periodicals	40,000
Utility	35,000
Allowances for Bad debt		85,000
Property, plant, and equipment	925,000
Retained earnings		575,000
Audit fees	85,000
Revenue		2,500,000
Cost of sales	800,000
Other income		82,000
Cash and bank balances	882,000
Capital		375,000
Total	4,287,000	4,287,000