9. SELF BALANCING LEDGERS

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1 9. SELF BALANCING LEDGERS SOLUTIONS TO ASSIGNMENT PROBLEMS PROBLEM NO.1 In the Debtors Ledger General Ledger Adjustment Account Cr. Particulars 2011 Particulars Debtors Ledger Adjustment Account Returns Inwards Balance c/d 7, Feb 1 Debtor Ledger Dishonoured 16,000 9, Feb 1 Feb 1 In the Creditors Ledger General Ledger Adjustment Account 2011 Particulars 2011 Particulars Balance b/d 18,500 Creditors Ledger Creditors Adjustment Ledger Account : Adjustment Account : Purchases 4,500 Bills Payable Return outwards Balance b/d 10,550 In General Ledger Debtors Ledger Adjustment Account Balance c/d 9, , , Particulars 2011 Particulars Balance b/d Nominal Ledger 16,000 : 9,800 Dishonoured 375 Balance b/d Nominal Ledger Adjustment Account: Returns inwards Balance c/d 7, IPCC_33e_Accounts_Group-I_ Self Balancing Ledgers_Assignment Solutions 1

2 Ph: /26 Creditors Ledger Adjustment Account 2011 Particulars 2011 Particulars Nominal Ledger : Bills Payable Return Outwards Balance c/d 9, , ,550 Nominal Ledger : Purchases 18,500 4,500 Note: 1. Cash sales 2. Provision for doubtful debts will not appear in the adjustment accounts. Because these will not affect debtors A/c. PROBLEM NO.2 Journal of Exe. Ltd. Self-Balancing System (a) Ledger Adjustment Account (In General Ledger) General Ledger Adjustment Account(In Ledger) (The error because of the under-casting of Books, rectified) Suspense Account (In Ledger) Account(in general ledger) (Rectification of the error resulting from under casting of the Book) (b) (c) Suspense Account (In Ledger) Rao (In Ledger) (Rectification of the error by which Rao was not credited, accounts in the general ledger are not affected) Murty (In Purchase Ledger) Murty (In Ledger) (Transfer of Murty s credit balance in the Purchase Ledger to his account in the Ledger) Bought Ledger Adjustment Account (In General Ledger) General Ledger (In Bought Ledger) (Correction of the adjustment accounts relating to the Bought Ledger because of the transfer of Murty s account, in the Purchase Ledger) General Ledger Adjustment Account (In Ledger) Ledger (In General Ledger) (Corrections of the adjustment account relating to the sales Ledger because of the transfer of Murty s account) Note: It is assumed that if a ledger is not balanced, a Suspense Account has been opened. IPCC_33e_Accounts_Group-I_ Self Balancing Ledgers_Assignment Solutions 2

3 Sectional Balancing System (a) tal Debtors Account Account (Rectification of the consequence of the under- casting the Book) (b) Credit with 50 (In Ledger) to Mr.Rao A/c. (c) Murty (In Purchase Ledger) Murty (In Ledger) (Transfer of Murty s credit balance in the Purchase Ledger to his account in the Ledger) tal Creditors A/c tal Debtors A/c (Adjustment of total accounts because of the transfer of Murty s account, in the Purchase Ledger to the Ledger) PROBLEM NO.3 General Ledger (In Ledger) Jan. to Dec. 31 Dec 31 Ledger in General Ledger: Return Inward Transfer Balance c/d ,000 5,000 1,290 64,000 1,39,990 Jan. 1 st st to to dec 31 st 2011 Jan. 1 Ledger in General Ledger B/R Dishonoured Sundry Charges General Ledger (In Purchase Ledger) 91,500 45,400 2, ,39, st st to dec 31 st Balance b/d Purchases Ledger (in General Ledger) Purchases Bills Payable dishonoured 1,09, ,000 1,56,800 to Dec 31 Purchases Ledger in General Ledger Bills Payable Return Outward Allowance Transfer Balance c/d 64,000 61,400 24,000 1,200 1, ,290 67,020 1,56, Balance b/d 67,020 IPCC_33e_Accounts_Group-I_ Self Balancing Ledgers_Assignment Solutions 3

4 Ph: /26 PROBLEM NO.4 Ledger General Ledger Adjustment Account April 1 Balance b/d 400 April 1 3,500 April 2 Ledger 300 April 3 Ledger April 30 (P, X & Y) 3,250 () 700 (A, B, C) 3,750 April 30 Ledger R(advance) 2,000 4,500 April 30 Balance c/d April 30 Balance c/d 2,000 (A,B & P) May 1 Balance b/d 10,700 2,000 May 1 10,700 Working Notes: (i) Opening balance includes the following debts : X 500 Copy Rights Reserved Y 2,000, Guntur P 3,500 (ii) Opening debit balance 400, is advance from T. (iii) Closing debit balance represents advance from R 2,000 (iv) Closing balance of includes the following debts A 250( ) B 500( ) P 250 (v) Cash collected from debtors: Debtor name Amount X 475 Y 2000 T 300 P 750 A 750 B 1000 C 2000 tal 7275 allowed 25 tal 7300 (vi) made: Debtor name Amount T 700 A 1000 B 1500 C 2000 tal 5200 IPCC_33e_Accounts_Group-I_ Self Balancing Ledgers_Assignment Solutions 4

5 PROBLEM NO.5 In the books of Self Ltd. tal debtors Account Particulars Particulars Balance b/d (Cheque dishonoured) B/R (Dishonoured) Interest Sundry Creditors (Endorsed Bill dishonoured with noting Charges) 78,000 7,500 2,500 1,200 4,90,000 5,575 5,84,775 Cash Allowed B/R Returns Inward Balance c/d 4,25,000 20,000 8,500 1,27,275 5,84,775 tal Creditors Account Particulars Particulars Cash B/R (endorsed) received Bills Payable Return outward Balance c/d 1,62,000 7,900 2,500 16,000 3,700 1,79,075 Purchases Sundry Debtors A/c (endorsed B/R dishonoured with noting charges) Cash (over payments refunded) 85,000 2,80,000 5, ,71,175 3,71,175 Note: Transactions relating to cash sales or purchases; honour of bills receivable or payable; and discount or endorsement of bill will not be entered in tal Debtors and tal Creditors A/c. PROBLEM NO.6 General Ledger Debtor Ledger Adjustment Account Date Particulars Amount Date Particulars Amount 2011 Mar 31 Balance b/d General Ledger Adj A/c: [100/120 x(1,80,000 4,800)] Creditors B/R Dishonoured Cheques dishonoured 50,000 1,46,000 6,000 8, Mar 31 General ledger Adj A/c: Collection cash and Bills receivables Bad debts (6, ) Balance c/d 1,37,200 20,000 30,000 8,000 14,800 2,10,000 2,10,000 Note: 1. Cash collected from debtors (50,000+1,46,000) x70%=1,37, Cash sales,bad debts recovered will not appear. IPCC_33e_Accounts_Group-I_ Self Balancing Ledgers_Assignment Solutions 5

6 Ph: /26 PROBLEM NO.7 tal debtors account in the general ledger of M/s. Zee Ltd. Date Particulars Amount Date Particulars Amount balance c/d 77, general ledger Adj. A/c: to general ledger Adj. A/c: (84,000-14,000) Bills receivables * (bills dishonored) (noting charges) * 70,000 8, to Cash Collected Bills receivables allowed return 38,000 26,000 2,550 Interest 1,250 1,57,500 Balance c/d 89,950 1,57,500 Working note: 1. of the year recovered in will not appear in the total debtors account, it will be credited to Profit & Loss account. * Note: That information is missing in the problem. PROBLEM NO.8 Date 2010 Apr 1 to 30 May 1 Particulars Balance b/d (15, ,56,000) (credit) A/c (5,55,000 1,14,000) A/c -Dishonored of X Cash A/c Noting Charges Balance c/d D Balance b/d tal debtors account Amount Date Particulars 2010 Apr 1 to Advanced by P 4,10,000 Cash A/c (W.N.1) 4, ,78,150 4,06,150 Working Notes: 1. Amount received from Customers: Particulars From Y D (advance) Add: From other customers before April 1 From sales during the month of April 30 May 1 Allowed A/c (W.N.2) A/c (2 4,500) Returns Inward A/c by X Bill Receivable A/c - by X Transfer to tal Creditors A/c - Z s Balance Balance c/d X 9,150 B Others 3,7 - D 4,500 2,7 97,500 3,9 Amount 20,000 3,9 9,500 16,500 6,000 4,06,150 8,78,150 IPCC_33e_Accounts_Group-I_ Self Balancing Ledgers_Assignment Solutions 6

7 2. 2½ % on gross amount: Then net value in % = 97½ (100-2½) So, discount on 3,70,500 (i.e. 2,7 + 97,500) will be = 3,70,500 x NOTE: In the problem, a sum of 4,500 was received from T should be read as Y. = 9,500 PROBLEM NO.9 In General Ledger Customer Ledger Control A/c Particulars ` Particulars ` Balance b/d General Ledger Control A/c: (Credit) Cheque dishonour Bills receivable dishonoured Balance c/d 2,35,000 7,65,000 5,000 7,000 GLA A/c: returns Cash / Cheque received Bills receivable allowed Bad debts Transfer to suppliers A/c Transfer to suppliers A/c Balance c/d 3,500 15,000 5,90,000 1,10, ,75,400 10,15,000 10,15,000 Balance b/d 2,75,400 PROBLEM NO.10 Journal Entries In the books of M/s Big Systematic Ltd. Particulars L.F. Debit Credit (i) Mehta (In / Debtors Ledger) Mehra (In / Debtors Ledger) (Being amount received from Mehra was wrongly credited to Mehta, now rectified) (ii) (a) Suspense Account (In / Debtors Ledger) Account (In General Ledger) (b) /Debtors Ledger Adjustment Account (In General Ledger) General Ledger Adjustment Account (In / Debtors Ledger) (Being rectification of the error resulting from under casting of the Book) (iii) (a) M/s. Mega Ltd. A/c (In Creditors/Bought Ledger) Purchase Returns A/c (In General Ledger) (b) Creditors/Bought Ledger (In General Ledger) General Ledger (In Creditors/Bought Ledger) (Being goods returned to supplier not recorded earlier, now recorded) THE END 8,700 IPCC_33e_Accounts_Group-I_ Self Balancing Ledgers_Assignment Solutions 7 8,700

8 Self-Balancing Ledgers

8 Self-Balancing Ledgers BASIC CONCEPTS System Ledger keeping of Self Balancing Ledger System implies a system of ledger keeping which classifies ledgers as per nature of transactions. In this system,