To prepare a correct Trial Balance, we need to identify the nature of each account (asset, liability, equity, revenue, expense) and ensure its balance is on the correct side (Debit for assets and expe

To prepare a correct Trial Balance, we need to identify the nature of each account (asset, liability, equity, revenue, expense) and ensure its balance is on the correct side (Debit for assets and expenses, Credit for liabilities, equity, and revenue). We will also incorporate the correct values provided in the preamble. Step 1: Analyze the given information and correct account balances. Land and Building: Asset. Correct value from preamble: Rs 1,00,000. Should be Debit. Sundry Creditors: Liability. Correct value from preamble: Rs 1,00,000. Should be Credit. (The table shows Creditors Cr 1,600, which is incorrect based on the preamble). Stock of Goods (Opening Stock): Asset. Correct value from preamble: Rs 40,000. Should be Debit. (The table shows Opening Stock Cr 4,000, which is incorrect in both value and side). Plant (Plant and Machinery): Asset. Correct value from preamble: Rs 50,000. Should be Debit. (The table shows Plant and Machinery Cr 4,000, which is incorrect in both value and side). Now, let's correct the accounts from the "wrongly prepared" Trial Balance table: Bank overdraft: Liability. Table shows Dr 2,800. Correct side is Credit. So, Cr 2,800. Cash-in-hand: Asset. Table shows Cr 400. Correct side is Debit. So, Dr 400. Purchases Returns: Contra-expense (reduces purchases). Table shows Dr 800. Correct side is Credit. So, Cr 800. Sundry Expenditures: Expense. Table shows Dr 2,400. Correct side is Debit. So, Dr 2,400. (Already on correct side). Sales Returns: Contra-revenue (reduces sales). Table shows Dr 1,600. Correct side is Debit. So, Dr 1,600. (Already on correct side). Salaries: Expense. Table shows Dr 1,600. Correct side is Debit. So, Dr 1,600. (Already on correct side). Purchases: Expense. Table shows Dr 5,600. Correct side is Debit. So, Dr 5,600. (Already on correct side). Sales: Revenue. Table shows Cr 8,800. Correct side is Credit. So, Cr 8,800. (Already on correct side). Debtors: Asset. Table shows Cr 2,000. Correct side is Debit. So, Dr 2,000. Capital: Equity. No value given in the table. This will be the balancing figure. Should be Credit. Step 2: Prepare the Correct Trial Balance. We will list all accounts with their correct debit or credit balances. |l|r|r| Name of Account & Debit (Rs) & Credit (Rs) \\ Land and Building & 1,00,000 & \\ Plant and Machinery & 50,000 & \\ Opening Stock & 40,000 & \\ Debtors & 2,000 & \\ Cash-in-hand & 400 & \\ Purchases & 5,600 & \\ Sales Returns & 1,600 & \\ Sundry Expenditures & 2,400 & \\ Salaries & 1,600 & \\ Sundry Creditors & & 1,00,000 \\ Bank overdraft & & 2,800 \\ Purchases Returns & & 800 \\ Sales & & 8,800 \\ Capital (Balancing Figure) & & 91,200 \\ Total & 2,03,600 & 2,03,600 \\ Step 3: Calculate the Capital (Balancing Figure). Total Debits: 1,00,000 + 50,000 + 40,000 + 2,000 + 400 + 5,600 + 1,600 + 2,400 + 1,600 = 2,03,600 Total Credits (excluding Capital): 1,00,000 + 2,800 + 800 + 8,800 = 1,12,400 Capital = Total Debits - Total Credits (excluding Capital) Capital = 2,03,600 - 1,12,400 = 91,200 The correct Trial Balance is presented above.