Prepare Trial Balance from the following balances of Mr. Kapil 
on 31.12.2019. 
Particulars Amount Particulars Amount (Rs.) 
Opening stock 30,000 Salaries 42,000 
Purchases 3,00,000 Rent 9,000 
Closing stock 14,000 Postage 4,500 
Debtors 12,000 Taxes 1,500 
Cash 3,000 Machinery 1,20,000 
Discount allowed 3,400 Drawings 20,000 
Bank 5,600 Capital 1,52,000 
Creditors 90,000 Purchase returns 6,000 
Sales 4,20,000 Sales returns 9,000 

To prepare a Trial Balance, we need to categorize each item as either a debit or credit balance. The following Trial Balance will summarize the provided information:

| **Particulars**         | **Debit (Rs.)** | **Credit (Rs.)** |
|-------------------------|-----------------|-------------------|
| Opening Stock           | 30,000          |                   |
| Purchases               | 3,00,000        |                   |
| Closing Stock*          |                 | 14,000           |
| Debtors                 | 12,000          |                   |
| Cash                    | 3,000           |                   |
| Discount Allowed        | 3,400           |                   |
| Bank                    | 5,600           |                   |
| Salaries                | 42,000          |                   |
| Rent                    | 9,000           |                   |
| Postage                 | 4,500           |                   |
| Taxes                   | 1,500           |                   |
| Machinery               | 1,20,000        |                   |
| Drawings                | 20,000          |                   |
| Creditors               |                 | 90,000           |
| Capital                 |                 | 1,52,000         |
| Purchase Returns        |                 | 6,000            |
| Sales                   |                 | 4,20,000         |
| Sales Returns           | 9,000           |                   |
| **Total**               | **5,59,000**    | **5,59,000**     |

### Explanation:
Each entry is classified based on its nature:
- **Debits:** Assets, expenses, and losses (e.g., Purchases, Debtors, Cash, and Expenses).
- **Credits:** Liabilities, income, and gains (e.g., Creditors, Sales, and Capital).

> **Note:** The Closing Stock of Rs. 14,000 is shown on the credit side in the Trial Balance because it represents an inventory adjustment that decreases expenses.

Let me know if you want more details or have any questions!

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1. How would adjustments in closing stock affect the Trial Balance?
2. What is the impact of purchase and sales returns on the Trial Balance?
3. Why is capital listed on the credit side?
4. How are drawings treated in financial statements?
5. How would you calculate gross profit from this data?

**Tip:** Remember that all debits and credits in a Trial Balance should always balance for accurate accounting.

Prepare Trial Balance from the following balances of Mr. Kapil on 31.12.2019. Particulars Amount Particulars Amount (Rs.) Opening stock 30,000 Salaries 42,000 Purchases 3,00,000 Rent 9,000 Closing stock 14,000 Postage 4,500 Debtors 12,000 Taxes 1,500 Cash 3,000 Machinery 1,20,000 Discount allowed 3,400 Drawings 20,000 Bank 5,600 Capital 1,52,000 Creditors 90,000 Purchase returns 6,000 Sales 4,20,000 Sales returns 9,000

Learn to prepare a Trial Balance for Mr. Kapil on 31.12.2019 with step-by-step categorization of debit and credit entries, covering key accounting concepts such as assets, liabilities, income, and expenses. Perfect for accounting students at the undergraduate level.

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