One of your clients Mr. Srikant asked you to finalize his account for the year ended 31st March, 2026. As a basis for audit, Mr. Srikant furnished…

Corrected Trial Balance of Mr. Srikant as on 31 st March, 2026 Particulars Dr. Amount ₹ Cr. Amount ₹ Srikant’s Capital 23,340 Srikant’s Drawings 8,460 Leasehold premises 11,250 Sales 41,250 Due from customers 7,950 Purchases 18,885 Purchases returns 3,960 Loan from Bank 3,840 Trade expenses 10,500 Trade Payable 7,920 Bills payable 1,500 Salaries and Wages 9,000 Cash at Bank 3,390 Inventory (1.4.2025) 3,960 Rent and rates 6,945 Sales return 1,470 81,810 81,810 Reasons: 1. Due from customers is an asset, so its balance will be a debit balance. 2. Purchases return account always shows a credit balance because assets goes out. 3. Trade Payable is a liability, so its balance will be a credit balance. 4. Bills payable is a liability, so its balance will be a credit balance. 5. Inventory (opening) represents assets, so it will have a debit balance. 6. Sales return account always shows a debit balance because assets come in. OR / Alternative Solution: In the Books of Mr. Jamie Manufacturing Account for the Year ended 31.03.2026 Particulars Units Amount ₹ Particulars Units Amount ₹ To Opening Work-in-Process 81,000 2,34,000 By Closing Work-in-Process 1,26,000 4,32,000 To Raw Materials Consumed: By Trading A/c – Cost of finished goods transferred 45,00,000 1,74,02,400 Opening Inventory 23,40,000 Add: Purchases 73,80,000 97,20,000 Less: Closing Inventory (₹ 28,80,000) 68,40,000 To Direct Wages – W.N. (1) 36,50,400 To Direct expenses: Hire charges on Machinery – W.N. (2) 31,50,000 To Indirect expenses: Hire charges of Factory 23,40,000 Repairs & Maintenance 16,20,000 1,78,34,400 1,78,34,400 Working Notes: (1) Direct Wages - 45,00,000 units @0.80 = 36,00,000 1,26,000 units @0.40 = 50,400 36,50,400 (2) Hire charges on Machinery - 45,00,000 units @0.70 = 31,50,000