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Sum all Debit Balances

Accounting

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Answer

Total Debits

GH¢2,088,600\text{GH¢2,088,600}

Total Credits

GH¢1,156,800\text{GH¢1,156,800}

Difference

GH¢931,800\text{GH¢931,800}

Step-by-step solution

3 steps

Here's the analysis of the provided trial balance for QUESTION TWO:

To verify the trial balance, we sum the debit and credit balances.

  1. Sum all Debit Balances

    • Receivables: GH¢300,000
    • Land and Buildings: GH¢420,000
    • Returns (Debit - Sales Returns): GH¢8,400
    • Plant and Equipment: GH¢180,000
    • Carriage Inwards: GH¢2,400
    • Motor Vehicles: GH¢540,000
    • Carriage Outwards: GH¢5,400
    • Furniture and Fittings: GH¢60,000
    • Purchases: GH¢540,000
    • Cash Box: GH¢14,400
    • Inventory: GH¢10,800
    • Rent and Rates: GH¢7,200

    Total Debits = 300,000+420,000+8,400+180,000+2,400+540,000+5,400+60,000+540,000+14,400+10,800+7,200300,000 + 420,000 + 8,400 + 180,000 + 2,400 + 540,000 + 5,400 + 60,000 + 540,000 + 14,400 + 10,800 + 7,200
    Total Debits = GH¢2,088,600\boxed{\text{GH¢2,088,600}}

  2. Sum all Credit Balances

    • Payables: GH¢192,000
    • Returns (Credit - Purchase Returns): GH¢4,800
    • Sales: GH¢960,000

    Total Credits = 192,000+4,800+960,000192,000 + 4,800 + 960,000
    Total Credits = GH¢1,156,800\boxed{\text{GH¢1,156,800}}

  3. Compare Totals

    The total debits (GH¢2,088,600) do not equal the total credits (GH¢1,156,800).
    Difference = Total Debits - Total Credits
    Difference = 2,088,600−1,156,8002,088,600 - 1,156,800
    Difference = GH¢931,800\boxed{\text{GH¢931,800}}

    The trial balance does not balance, with total debits exceeding total credits by GH¢931,800.

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