Sum 1

Journalise the following transactions. Also state the nature of each account involved in the Journal
entry.

1 2005 March 1 Kaumil started business with cash Rs.65000

2 March 2 He received a loan from Avani of Rs. 6000 at 12% interest
3 March 3 He paid into the bank Rs.12000
4 March 5 He purchased goods for cash Rs.12000
5 March 8 He sold goods for cash Rs.20000
6 March 10 He purchased machinery and paid by cheque Rs 9000
7 March 12 He sold goods to Aagam Rs 5000
8 March 14 He purchased goods from Nikita Rs 12000
9 March 15 He returned goods to Nikita Rs 2000
10 March 16 He received from Aagam Rs 4950 in full settlement
11 March 18 He withdrew goods for personal use Rs 500
12 March 20 He withdrew cash from business for personal use Rs 1500
13 March 24 He paid advertisement charges Rs 1000
14 March 25 He gave a loan of Rs 3000 to an employee
15 March 26 Cash paid to Nikita in full settlement Rs 9900
16 March 31 Paid for stationery Rs 500 , rent Rs 1500 and salaries to staff Rs 5000
17 March 31 Goods distributed by way of free samples Rs 500
18 March 31 He paid interest of Rs 60 To Avani

Analysis of the transactions –

Analyse the above given transaction in the way is has been done in table below

Date Analysis (Break Accounts Type of Rule – Accounts Accounts

the given affected Account – Apply to be to be
statement into PRN golden rule debited credited
individual of
transactions) accounting
March 1 Cash comes in Cash A/c Real Debit what Cash A/c
the business comes in with Rs.
65000
Owner(Kaumil)
is the giver Capital A/c Personal Credit the Capital A/c
giver with Rs
65000

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On the basis of the above table and after analyzing all the transactions write the JOURNAL ENTRIES

Business of Mr.Kaumil or Kaumil’s Business LEDGER FOLIO – PAGE NUMBER

Journal Entries

Date Particulars LF Debit (Rs) Credit (Rs)

2005 Cash A/c…………………..Dr 65,000
March 1 To Capital A/c 65,000

(Being owner investing on commencement

of business)

March 2 Cash A/c…………………..Dr 6,000

To Loan from Avani A/c 6,000

(Being loan from Avani)

March 3 Bank A/c…………………..Dr 12,000

To Cash A/c 12,000

(Being cash deposited into the bank)

March 5 Purchases A/c…………………..Dr 12,000

To Cash A/c 12,000

(Being purchase of goods for cash)

March 8 Cash A/c…………………..Dr 20,000

To Sales A/c 20,000

(Being purchase of goods for cash)

March 10 Machinery A/c…………………..Dr 9,000

To Bank A/c 9,000

(Being purchase of machinery , payment

by cheque)

March 12 Aagam A/c…………………..Dr 5,000

To Sales A/c 5,000

(Being sale of goods to Aagam)

March 14 Purchases A/c…………………..Dr 12,000 12,000

To Nikita A/c

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 (Being purchase of goods from Nikita)

March 15 Nikita A/c…………………..Dr 2,000

To Purchase Return A/c 2,000

COMPOUND JOURNAL ENTRY (Being goods returned to Nikita)

March 16 Cash A/c…………………..Dr 4,950

Discount A/c…………….Dr 50
To Aagam A/c 5,000

(Being cash received from Aagam in full

and final settlement and allowed him Rs. 50
as discount )

March 18 Drawings A/c…………………..Dr 500

To Purchases A/c 500

(Being withdrawal of goods for personal

use)

March 20 Drawings A/c…………………..Dr 1,500

To Cash A/c 1,500

(Being withdrawal of cash from business for

personal use)

March 24 Advertisement A/c…………………..Dr 1,000

To Cash A/c 1,000

(Being advertisement expenses paid )

March 25 Loan to employee A/c…………………..Dr 3,000

To Cash A/c 3,000

(Being cash paid to employee as loan)

March 26 Nikita A/c…………………..Dr 10,000

To Cash A/c 9,900
To Discount A/c 100

(Being cash paid to Nikita and she allowed

Rs. 100 as discount)

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March 31 Stationery A/c…………………..Dr 500
Rent A/c…………….Dr 1,500
Salary A/c…………….Dr 5,000
To Cash A/c 7,000

(Being expenses paid)

March 31 Advertisement A/c…………………..Dr 500

To Purchases A/c 500

(Being distribution of goods by way of free

samples)

March 31 Interest A/c…………………..Dr 60

To Cash A/c 60

(Being interest paid on loan for one month)

TOTAL 1,71,560 1,71,560

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POSTING THE ENTRIES TO THE LEDGER

Dr. CASH Cr.

Date Particulars JF Amount Date Particulars JF Amount
March (Rs) March (Rs)
2005 2005
1 To Capital A/c 65,000 3 By Bank A/c 12,000
2 To Loan from 6,000 5 By Purchases A/c 12,000
Avani’s A/c 20 By Drawings A/c 1,500
8 To Sales A/c 20,000 24 By Advertisement 1,000
16 To Aagam’s A/c 4,950 A/c
25 By Loan to 3,000
employee A/c
26 By Nikita’s A/c 9,900
31 By Stationery A/c 500
31 By Rent A/c 1,500
31 By Salary A/c 5,000
31 By Interest A/c 60
31 By Balance c/d 49,490
TOTAL 95,950 TOTAL 95,950

Dr. CAPITAL Cr.

Date Particulars JF Amount Date Particulars JF Amount
March (Rs) March (Rs)
2005 2005
31 To Balance c/d 65,000 1 By Cash A/c 65,000

TOTAL 65,000 TOTAL 65,000

Dr. Loan from Avani’s Account Cr.

Date Particulars JF Amount Date Particulars JF Amount
March (Rs) March (Rs)
2005 2005
31 To Balance c/d 6,000 By Cash A/c 6,000

TOTAL 6,000 TOTAL 6,000

Dr. Bank Account Cr.

Date Particulars JF Amount Date Particulars JF Amount
March (Rs) March (Rs)
2005 2005
3 To Cash A/c 12,000 10 By Machinery 9000
31 By Balance c/d 3000
TOTAL 12,000 TOTAL 12,000

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Dr. Purchase Account Cr.
Date Particulars JF Amount Date Particulars JF Amount
March (Rs) March (Rs)
2005 2005
5 To Cash A/c 12,000 18 By Drawing 500
14 To Nikita’s A/c 12,000 31 By Advertisement 500
31 By Balance c/d 23,000
TOTAL 24,000 TOTAL 24,000

Dr. Sales Account Cr.

Date Particulars JF Amount Date Particulars JF Amount
March (Rs) March (Rs)
2005 2005
31 To Balance c/d 25,000 8 By Cash A/c 20,000
12 By Aagam’s A/c 5,000
TOTAL 25,000 TOTAL 25,000

Dr. Machinery Account Cr.

Date Particulars JF Amount Date Particulars JF Amount
March (Rs) March (Rs)
2005 2005
10 To Bank 9,000 31 By Balance c/d 9,000

TOTAL 9,000 TOTAL 9,000

Dr. Aagam’s Account Cr.

Date Particulars JF Amount Date Particulars JF Amount
March (Rs) March (Rs)
2005 2005
12 To Sales 5,000 16 By Cash 4,950
16 By Discount 50
Allowed

TOTAL 5,000 TOTAL 5,000

Dr. Nikita’s Account Cr.

Date Particulars JF Amount Date Particulars JF Amount
March (Rs) March (Rs)
2005 2005
15 To Purchase 2,000 14 By Purchases 12,000
Return A/c 9,900

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 26 To Cash A/c
26 To Discount 100
Received A/c
TOTAL 12000 TOTAL 12,000

Dr. Purchase Return Account Cr.

Date Particulars JF Amount Date Particulars JF Amount
March (Rs) March (Rs)
2005 2005
31 To Balance c/d 2,000 15 By Nikita’s A/c 2,000

TOTAL 2,000 TOTAL 2,000

Dr. Discount Allowed Account Cr.

Date Particulars JF Amount Date Particulars JF Amount
March (Rs) March (Rs)
2005 2005
16 To Aagam’s A/c 50 31 By Balance c/d 50

TOTAL 2,000 TOTAL 2,000

Dr. Drawings Account Cr.

Date Particulars JF Amount Date Particulars JF Amount
March (Rs) March (Rs)
2005 2005
20 To Cash A/c 1,500 31 By Balance c/d 2000
18 To Purchase A/c 500
TOTAL 2,000 TOTAL 2,000

Dr. Advertisement Account Cr.

Date Particulars JF Amount Date Particulars JF Amount
March (Rs) March (Rs)
2005 2005
24 To Cash A/c 1,000 By Balance c/d 1,500
31 To Purchase A/c 500
TOTAL 1,500 TOTAL 1,500

Dr. Loan to Employee Account Cr.

Date Particulars JF Amount Date Particulars JF Amount
March (Rs) March (Rs)
2005 2005
25 To Cash A/c 3,000 31 By Balance c/d 3,000

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 TOTAL 3,000 TOTAL 3,000

Dr. Discount Received Account Cr.

Date Particulars JF Amount Date Particulars JF Amount
March (Rs) March (Rs)
2005 2005
31 To Balance c/d 100 26 By Nikita’s A/c 100
TOTAL 100 TOTAL 100

Dr. Stationery Account Cr.

Date Particulars JF Amount Date Particulars JF Amount
March (Rs) March (Rs)
2005 2005
31 To Cash 500 31 By Balance c/d 500
TOTAL 500 TOTAL 500

Dr. Rent Account Cr.

Date Particulars JF Amount Date Particulars JF Amount
March (Rs) March (Rs)
2005 2005
31 To Cash 1,500 31 By Balance c/d 1,500
TOTAL 1,500 TOTAL 1,500

Dr. Salary Account Cr.

Date Particulars JF Amount Date Particulars JF Amount
March (Rs) March (Rs)
2005 2005
31 To Cash 5,000 By Balance c/d 5,000
TOTAL 5,000 TOTAL 5,000

Dr. Interest Account Cr.

Date Particulars JF Amount Date Particulars JF Amount
March (Rs) March (Rs)
2005 2005
31 To Cash 60 By Balance c/d 60
TOTAL 60 TOTAL 60

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Trial Balance – Based on the above ledger accounts

Trial Balance as on March 31 , 2005 (Balance Method )

Sr. Particulars LF Debit (Rs) Credit (Rs)

No
1 Cash A/c 49,490
2 Capital A/c 65,000
3 Avani’s Loan A/c 6,000
4 Bank A/c 3,000
5 Purchases A/c 23,000
6 Sales A/c 25,000
7 Machinery A/c 9,000
8 Purchase Return A/c 2,000
9 Discount Allowed A/c 50
10 Drawings A/c 2,000
11 Advertisement A/c 1,500
12 Loan to Employee A/c 3,000
13 Discount Received A/c 100
14 Stationery A/c 500
15 Rent A/c 1,500
16 Salary A/c 5,000
17 Interest A/c 60

TOTAL 98,100 98,100

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Final Accounts – On the basis of the trial balance

Profit and Loss Account for the period 1st March 2005 to 31st March 2005

Particulars Amount Particulars Amount (Rs)

(Rs)
To Purchases 23,000 By Sales 25,000
Less Purchase Return (2,000) 21,000 By Discount Received 100
To Discount Allowed 50
To Advertisement 1,500
To Stationery A/c 500
To Rent A/c 1,500
To Salary A/c 5,000
To Interest A/c 60
To Loss transferred to Balance 4,510
Sheet

TOTAL 25,100 TOTAL 25,100

Balance Sheet As on 31st March 2005

Liabilities Amount Assets Amount (Rs)

(Rs)
Capital 65,000 Cash 49,490
Less Drawings (2,000) 63,000 Bank 3,000
Loss transferred to Balance (4,510) Machinery 9,000
Sheet Loan to Employee Account 3,000
Avani’s Loan Account 6,000

TOTAL 64,490 TOTAL 64,490

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