1. Trial Balance As On January 31, 20--
Lecture 1
Ali Traders
Trial Balance As On January 31, 20--
Title of Account
Code
Dr. Rs.
Cr. Rs.
Cash Account 01
35,000
Bank Account 02
130,000
Capital Account 03
200,000
Furniture Account 04
15,000
Vehicle Account 05
50,000
Purchases Account 06
60,000
Mr. A (Creditor) 07
Sales 08
95,000
Mr. B (Debtor) 09
Salaries 10
5,000
Expenses 11
20,000
Expenses Payable 12
Total
330,000

2. Accounting Equation Assets = Capital + Liabilities
Lecture 1
Accounting Equation
Assets = Capital + Liabilities
Assets = 35, ,000+15,000+50,000+15,000= 245,000
Capital = 200,000
Liabilities = 15, ,000 = 35,000
Capital + Liabilities = 235,000

3. Trial Balance As On January 31, 20--
Lecture 1
Ali Traders
Trial Balance As On January 31, 20--
Title of Account
Code
Dr. Rs.
Cr. Rs.
Cash Account 01
35,000
Bank Account 02
130,000
Capital Account 03
200,000
Furniture Account 04
15,000
Vehicle Account 05
50,000
Purchases Account 06
60,000
Mr. A (Creditor) 07
Sales 08
95,000
Mr. B (Debtor) 09
Salaries 10
5,000
Expenses 11
20,000
Expenses Payable 12
Total
330,000

4. Balance Sheet of Ali Traders
Lecture 1
Balance Sheet of Ali Traders
Name of the Entity (Ali traders)
Balance Sheet As At (January 31, 20--)
Liabilities
Assets
Particulars
Amount Rs.
Capital
Fixed Assets
65,000
Profit and Loss Account
10,000
Furniture 15,000
Current Liabilities
Mr. A 15,000
Exp. payable 20,000
210,000
35,000
Vehicle 50,000
Current Assets
Mr. B 15,000
Bank 130,000
Cash 35,000
180,000
Total
245,000

5. Balance Sheet of Ali Traders
Lecture 1
Balance Sheet of Ali Traders
Ali traders
Balance Sheet As At January 31, 20--
Particulars
Amount Rs.
Assets
Fixed Assets
Current Assets
65,000
180,000
Total
245,000
Liabilities
Capital
Profit and Loss Account
200,000
10,000
210,000
Current Liabilities
35,000

6. Working Capital Working Capital = Current Assets – Current Liabilities
Lecture 1
Working Capital
Working Capital = Current Assets – Current Liabilities

7. Cost of Sales & Closing Stock
Lecture 1
Cost of Sales & Closing Stock
Closing Stock – The Value of goods unsold at the end of the accounting period.
Cost of Sales = Purchases – Closing Stock.

8. Treatment of Closing Stock
Lecture 1
Treatment of Closing Stock
Closing Stock = 1,000
Cost of goods sold => 60, ,000 = 59,000

9. Ali Traders Profit and Loss Account
Lecture 1
Ali Traders Profit and Loss Account
Name of the Entity (Ali Traders)
Profit and Loss Account for the Month Ending January 31, 20--
Particulars
Amount
Rs.
Income / Sales / Revenue
Less: Cost of Goods Sold ( 60, ,000 )
(59,000)
95,000
Gross Profit
Less: Administrative Expenses
(25,000)
36,000
Net Profit
11,000

10. Treatment of Closing Stock
Lecture 1
Treatment of Closing Stock
Closing Stock = 1,000
Current assets => 180, ,000 = 181,000

11. Value of Stock Used = Opening Stock + Purchases - Closing Stock
Lecture 1
Value of Stock Used =
Opening Stock
+ Purchases
- Closing Stock

12. Balance Sheet of Ali Traders
Lecture 1
Balance Sheet of Ali Traders
Ali traders
Balance Sheet As At January 31, 20--
Particulars
Amount Rs.
Assets
Fixed Assets
Current Assets (180, ,000)
65,000
181,000
Total
246,000
Liabilities
Capital
Profit and Loss Account
200,000
11,000
210,000
Current Liabilities
35,000

13. Utilization of Fixed Assets
Lecture 1
Utilization of Fixed Assets
Dividing total cost by life of the asset.
Rs. 65,000 / 50 months = Rs. 1,300 monthly charge

14. Treatment of Depreciation
Lecture 1
Treatment of Depreciation
Rs. 1,300 is treated as expense.
Fixed assets => 65, ,300 = 63,700
This net amount of Rs. 63,700 is referred to as Book Value OR Written Down Value (WDV)

15. Ali Traders Profit and Loss Account
Lecture 1
Ali Traders Profit and Loss Account
Name of the Entity (Ali Traders)
Profit and Loss Account for the Month Ending January 31, 20--
Particulars
Amount
Rs.
Income / Sales / Revenue
Less: Cost of Goods Sold ( 60,000-1,000 )
(59,000)
95,000
Gross Profit
Less: Administrative Expenses
Depreciation
(25,000)
(1,300)
36,000
(26,300)
Net Profit
9,700

16. Balance Sheet of Ali Traders
Lecture 1
Balance Sheet of Ali Traders
Ali traders
Balance Sheet As At January 31, 20--
Particulars
Amount Rs.
Assets
Fixed Assets (65,000 – 1,300)
Current Assets (180, ,000)
63,700
181,000
Total
244,700
Liabilities
Capital
Profit and Loss Account
200,000
9,700
209,700
Current Liabilities
35,000

17. Distribution of Profits / Drawing
Lecture 1
Distribution of Profits / Drawing

18. Balance Sheet of Ali Traders
Lecture 1
Balance Sheet of Ali Traders
Ali traders
Balance Sheet As At January 31, 20--
Particulars
Amount Rs.
Assets
Fixed Assets (65,000 – 1300)
Current Assets (181, ,000)
63,700
176,000
Total
239,700
Liabilities
Capital
Profit and Loss Account
Drawing
200,000
9,700
(5,000)
204,700
Current Liabilities
35,000