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Journal EntryIllustration 1. Journalize the following transactions with narration:DateParticularsAmount1 May,2019Receive cash from Ramu2,5004 May,2019Purchase goods for cash1,0005 May, 2019Sold goods to Hari4,0008 May, 2019Bought furniture from Raju50010 May, 2019Paid for office stationery150Illustration 2. Journalise the following transactions. Following figures are given in (’00)December 1, 2018, Ajit started business with capital Rs.4,00,000.December 3, He withdrew cash for business from the Bank Rs. 2,000.December 5, He purchased goods making payment through bank Rs. 15,000.December 8, He sold goods Rs. 16,000 and received payment through bank.December 10, He purchased furniture and paid by cheque Rs.2, 500.December 12, He sold goods to Arvind Rs. 2, 400.December 14, He purchased goods from Amrit Rs. 10,000.December 15, He returned goods to Amrit Rs. 500.December 16, He received from Arvind Rs.2, 300 in full settlement.December 18, He withdrew goods for personal use Rs. 1,000.December 20, He withdrew cash from business for personal use Rs. 2,000.December 24, He paid telephone charges Rs.110.December 26, Amount paid to Amrit in full settlement Rs. 9,450. December 31, Paid for stationery Rs.200, Rent Rs. 5,000 and salaries to staff Rs. 2,000.December 31, Goods distributed by way of free samples Rs. 2,000.Illustration 3. Shown the classification of the following accounts under traditional and accounting equation approach:(a)Building (b) Purchases (c) Sales (d) Bank Fixed Deposit (e) Rent (f) Rent Outstanding (g) Cash (h) Adjusted Purchases (i) Closing Inventory (j) Investments (k) Trade receivables (l) Sales Tax Payable (m) Discount Allowed (n) Bad debts (o) Capital (p)Drawings (q) Interest Receivable Account (r) Rent received in advance (s) Prepaid salary (t) Bad debts recovered (u) Depreciation (v) Personal income taxIllustration 4: Transactions of Ramesh for April are given below. Journalise them.April 2019Amount in Rs.1Ramesh started business with 10,00,0003Bought goods for cash50,0005Drew cash from bank10,00013Sold to Krishna- goods on credit1,50,00020Bought from Shyam goods on credit2,25,00024Received from Krishna1,45,000Allowed him discount5,00028Paid Shyam Cash2,15,000Discount allowed10,00030Cash Sales for the month8,00,000Paid Rent50,000Paid Salary1,00,000Illustration 5:Pass Journal Entries for the following transactions in the books of Gamma Bros.Employees had taken inventory worth Rs.1,00,000 (Cost price Rs. 75,000) on the eve of Deepawali and the same was deducted from their salaries in the subsequent month.Wages paid for erection of Machinery Rs. 18,000.Income tax liability of proprietor Rs.1,17,000 was paid out of petty cash.Purchase of goods from Naveen of the list price of Rs.2,00,000. He allowed 10% trade discount, Rs. 5,000 cash discount was also allowed for quick payment.Trial BalanceIllustration 6:Mr. Ashish furnishes the following balances as on 31st March, 2019. You have to prepare a Trial Balance with the following information:ParticularsAmount (Rs.)ParticularsAmount (Rs.)Interest on Capital24,000Salaries1,28,000Creditors6,00,000Capital8,00,000Discount Received23,000Drawings2,46,000Loan1,74,000Machinery3,00,000Purchase Returns40,000Bills Payable20,000Sales Return6,000Furniture6,00,000Advertisement1,63,000Debtors5,00,000Commission Received20,000Bank Loan2,00,000Rent10,000Patents60,000Purchases19,00,000Sales32,60,000Opening Stock12,00,000Illustration 7: From the following Ledger balances, prepare a trial balance of Anuradha Traders as on 31st March 2019.Account HeadAmount (Rs.)Capital1,00,000Sales1,66,000Purchases1,50,000Sales Return1,000Discount Allowed2,000Expenses10,000Trade Receivables75,000Trade Payables25,000Investments15,000Cash at Bank and in Hand37,000Interest received on investments1,500Insurance paid2,500Illustration 8: One of your clients, Mr. Singhania has asked you to finalise his account for the year ended 31st March,2019. Till date, he himself has recorded the transactions in books of accounts. As a basis for audit, Mr. Singhania furnished you with the following statement.Dr. BalanceCr. BalanceSinghania’s Capital1,556Singhania’s Drawings564Leasehold premises750Sales2750Due from customers530Purchases1259Purchase Return264Loan from Bank256Trade Payables528Trade expenses700Cash at bank226Bills Payable100Salaries and Wages600Inventories (1.4.2018)264Rent and rates463Sales Return98Total54545454The closing inventory on 31st March, 2019 was valued at Rs.574. Mr. Singhania claims that he has recorded every transaction correctly as the Trial Balance is tallied. Check the accuracy of the above trial balance.Triple Column Cash BookIllustration 9: Enter the following transactions in Cash Book with Discount and Bank Columns. Cheques are first treated as cash receipt.2019Amount (Rs.)Jan.1Chandrika commences business with Cash20,000“3He paid into Current A/c19,000“4He received cheque from Kirti & Co. on account600“7He pays in bank Kirty & Co.’s cheque600“10He pays Rattan & Co. by cheque and is allowed discount ` 20330“12Tripathi & Co. pays into his Bank A/c475“15He receives cheque from Warshi and allows him discount ` 35450“20He receives cash ` 75 and cheque ` 100 for cash sale“25He pays into Bank, including cheques received on 15th and 20th1,000“27He pays by cheque for cash purchase275“30He pays sundry expenses in cash50Illustration 10: From the following particulars, write up the Cash Book of M/s R.R with cash and Bank columns and bring down the final balance.2019ParticularsAmount1 AprilCash in hand1001Cash at Bank3,5005Paid salary by cheque2507Paid to K.K & Co. by Cheque2609Received a cheque from B & Co.2,50012Bought goods for cash paid by cheque75015Received cash from M/s. S Chand1,50017Deposited cash into bank1,45018Sundry creditors were paid by cheque1,25019Received from debtors by cheque which could not be sent to bank1,78020B & Co. cheque dishonored2,50022B & Co. paid Cash2,50024R & Co. issued a cheque for Rs.470 in full satisfaction of his account for50027Shyam Lal was paid Rs. 395 in full settlement of his A/c amounting to40030Deposited into the bank2,200Illustration 11. From the following particulars make cash book of Ghulam Fatima Trading Co. for the month of November, 2016:? ??? ?1????????? Cash balance (Cr) Rs. 2,000; Bank balance Rs. 40,000.4??????????Cash sales Rs. 3,700; Credit sales Rs. 1,800 would be received at near future.6?????????? Paid Ahmed & Bros. by cash Rs.? 500; Received cash by debtors Rs. 1,800.12?????????Paid to vendor by means of check worth Rs. 2,700.13???????? Paid Utility bills in cash Rs. 250; Bought goods by check Rs. 750.19???????? Drew from Bank for office use Rs. 160; Personal withdrawal of cash Rs. 1,000.20?????????Received a check from Hamid Rs. 2,700 and deposited into the bank.21?????????Received by check from Munir Rs. 1,360; Discount Rs. 140 (not deposited).25?????????Cash sales Rs. 2,100; Paid wages by bank Rs. 1,500.28?????????Deposited Munir’s check into bank.29??????????Payment by check to Anees for Rs. 175; Discount received Rs. 25.30?????????? Munir’s check has been dishonored and return by bank.Bank Reconciliation StatementIllustration 12: From the following particulars, prepare a Bank Reconciliation Statement for Jindal Offset Ltd.Balance as per Cash Book is Rs. 2,40,000.Cheques issued but not presented in the bank amounts to Rs. 1,36,000.Cheques deposited in bank but not yet cleared amounts to Rs. 90,000.Bank charges amount to Rs.300.Interest credited by bank amounts to Rs. 1,250.The balance as per Pass Book if Rs.2,86,950.Illustration 13: On 31st March 2017, the Bank Pass Book of Namrata showed a balance of Rs.1,50,000 to her credit while balance as per cash book was Rs. 1,12,050. On scrutiny of the two books, she ascertained the following causes of difference:She has issued cheques amounting to Rs. 80,000 out of which only Rs. 32,000 were presented for payment.She received a cheque of Rs. 5,000 which she recorded in her cash book but forgot to deposit in the bank.A cheque of Rs. 22,000 deposited by her has not been cleared yet. Mr. Gupta deposited an amount of Rs. 15,700 in her bank which has not been recorded by her in Cash Book yet.Bank has credit an interest of Rs. 1,500 while charging Rs.250 as bank charges.Prepare Bank Reconciliation Statement.Illustration 14: From the following information, prepare a Bank Reconciliation Statement as at 31st December, 2017 for Messers New Steel Limited:Bank overdraft as per Cash Book on 31st December, 2017 Rs. 22,45,900.Interest debited by bank on 26th December, 2017 but no advice received Rs.2,78,700.Cheque issued before 31st December, 2017 but not yet presented to Bank Rs. 6,60,000.Transport subsidy received from the State Government directly by the Bank but not advised to the company Rs. 14,25,000.Draft deposited in the Bank, but not credited till 31st December, 2017 Rs. 13,50,000.Bills for collection credited by the Bank till 31st December, 2017 but no advice received by the company Rs.8,36,000.Amount wrongly debited to company account by the Bank, for which no details are available Rs. 7,40,000.Illustration 15: When Nikki & Co. received a Bank Statement showing a favourable balance of Rs.10,39,200 for the period ended on 30th June, 2017, this did not agree with the balance in the cash book. An examination of the cash book and bank statement disclosed the following:A deposit of Rs. 3,09,200 paid on 29th June, 2017 had not been credited by the Bank until 1st July, 2017.On 30th March, 2017 the company had entered into hire purchase agreement to pay by bank order a sum of Rs. 3,00,000 on the 10th of each month, commencing from April, 2017. No entries had been made in Cash book.A customer of the firm, who received a cash discount of 4% on his account of Rs. 4,00,000 paid the firm a cheque on 12th June. The cashier erroneously entered the gross amount in the bank column of the Cash Book.Bank charges amounting to Rs. 3,000 had not been entered in Cash Book.On 28th June, a customer of the company directly deposited the amount in the bank Rs. 4,00,000 but no entry has been made in the cash book.Rs. 11,200 paid into the bank had been entered twice in the Cash Book.A debit of Rs.11,00,000 appeared in the Bank Statement for an unpaid cheque, which had been returned marked ‘out of date’. The cheque had been re- dated by the customer and paid into Bank again on 5th July, 2017.Prepare Bank Reconciliation Statement on 30th June, 2017. Illustration 16: The bank account of Mukesh was balanced on 31st March, 2017. It showed an overdraft of Rs. 5,000. This did not agree with the balance shown by bank statement of Mukesh. You are required to prepare a bank reconciliation statement taking into account:Cheques issued but not presented for payment till 31.3.2017 Rs. 12,00,000.Cheques deposited but not collected by bank till 31.3.2017 Rs. 20,00,000.Interest on term loan Rs. 10,00,000 debited by bank on 31.3.2017 but not accounted in Mukesh’s Book.Bank Charges Rs.2,500 was debited by bank during March, 2017 but accounted in the books of Mukesh on 4.4.2017.An amount of Rs.30,68,000 representing collection of Mukesh’s cheque was wrongly credited to the account of Mukesh by the bank in their bank statement. ................
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