Illustration 1.

Pass the Journal entries for the following transactions of Gurman Traders:
2025 `
May 1 Paid cash to Maira against dues 9,750
Received cash discount 250
May 3 Sold goods to Hemant of List Price ` 20,000 less 10% Trade Discount
May 7 Sold goods in cash 2,500
May 10 Goods returned by Hemant of List Price ` 2,000
May 20 Received cash from Hemant in settlement of his account 15,700
May 20 Bought goods from Nihar of List Price ` 30,000 less 15% Trade Discount
May 22 Goods returned to Nihar of List Price ` 5,000, not being as per specifications
May 25 Paid to Nihar on account 9,800
Received cash discount 200
May 30 Paid salary to Jiten 14,000
Solution: JOURNAL OF GURMAN TRADERS
Date Particulars L.F. Dr. (`) Cr. (`)
2025
May 1 Maira ...Dr. 10,000
To Cash A/c 9,750
To Discount Received A/c 250
(Amount paid to Maira, availed Cash Discount)
May 3 Hemant ...Dr. 18,000
To Sales A/c 18,000
(Goods sold on credit allowing 10% Trade Discount)
May 7 Cash A/c ...Dr. 2,500
To Sales A/c 2,500
(Goods sold against cash)
May 10 Sales Return A/c ...Dr. 1,800
To Hemant 1,800
(Goods returned by Hemant of ` 1,800 (i.e., ` 2,000 – ` 200))
May 20 Cash A/c ...Dr. 15,700
Discount Allowed A/c ...Dr. 500
To Hemant 16,200
(Cash received from Hemant in Settlement)
May 20 Purchases A/c ...Dr. 25,500
To Nihar 25,500
(Goods purchased from Nihar of List Price ` 30,000 less 15% Trade Discount)
May 22 Nihar ...Dr. 4,250
To Purchases Return A/c 4,250
(Goods returned, being not as specified)
May 25 Nihar ...Dr. 10,000
To Cash A/c 9,800
To Discount Received A/c 200
(Part payment made, Cash Discount received)
May 30 Salaries A/c ...Dr. 14,000
To Cash A/c 14,000
(Salary paid to Jiten)

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Illustration 2.
Journalise the following transactions:
(i) ` 5,000 due from Ramesh are irrecoverable.
(ii) Sohan is declared insolvent. Received from his Official Receiver 60 paise in a
rupee on a debt of ` 10,000.
(iii) Received cash for a bad debt written off last year ` 700.
Solution: JOURNAL
Date Particulars L.F. Dr. (`) Cr. (`)
(i) Bad Debts A/c ...Dr. 5,000
To Ramesh 5,000
(Bad debts written off)
(ii) Cash A/c ...Dr. 6,000
Bad Debts A/c ...Dr. 4,000
To Sohan 10,000
(Cash dividend of 60 paise in a rupee out of his debt of
` 10,000 received from Sohan on his insolvency)
(iii) Cash A/c ...Dr. 700
To Bad Debts Recovered A/c* 700
(Cash received on account of recovery of a bad debt
which was previously written off)
* Recovery of bad debts written off last year is a gain, therefore, it is credited to the Bad Debts
Recovered Account.