Chapter 3 JOURNAL LEDGER AND TRIAL BALANCE

1 Chapter 3 JOURNAL LEDGER AND TRIAL BALANCE Concept Capsule 1 Classify the following a/c under traditional approach. Account Name Personal Account Real Account Nominal Account Capital Introduced Drawing A/c Cash Received Interest Paid Discount Received Bank a/c Bank O/D Bad debts written off Outstanding Salaries Prepaid Rent Purchase A/c Sales A/c Carriage Inwards Bad debt Recovered Interest Accrued A/c Goodwill Plant and Machinery Leasehold Property Concept Capsule 2 State the nature of account (Personal, Real, or Nominal) and show which will be debited and which will be credited. Account Name Nature of Account Debited Credited Rent Paid A/c Rent Received A/c Interest Received A/c Machinery A/c Building A/c Purchases A/c Discount Allowed A/c Capital A/c Sales A/c Concept Capsule 3 From the following transactions, Journalised it 1. Mr. Pabitra Das started business with Rs 5,00,000 in cash

2 2. Purchased goods for cash Rs 1,00,000 3. Sold goods for cash Rs 1,50,000 4. Received interest from Ram in cash Rs 500 5. Sold goods to Ashok for Rs 60,000 6. Purchased furniture for cash Rs 50,000 7. Paid wages Rs 20,000 Concept Capsule 4 On which side will increase in following accounts be recorded? Also mention the nature of the account on the basis of Modern Classification of Accounts. Account Name Nature of Account Debited Credited Machinery A/c Creditor A/c Mohan (Proprietor) Sales A/c Carriage Outwards A/c Cash A/c Debtor s A/c Carriage Outwards A/c Cash A/c Bills Payable A/c Rent A/c Interest Payable A/c Freight A/c Cartage A/c Bank A/c Furniture A/c Machinery A/c Salary Outstanding A/c Pabitra (supplier) Sohan (customer) Concept Capsule 5 Journalise the following transactions. 1. Pabitra started business with cash Rs 5,00,000 2. Borrowed from Naresh Rs 1,00,000 3. Purchased furniture for Rs 20,000 in cash for R. Furniture Houses 4. Purchased furniture from Delhi Safe for Rs 40,000 5. Purchased goods for cash Rs 15,000 6. Purchased goods from Mahesh Rs 30,000 7. Sold goods for cash to karim Rs 25,000 8. Sold goods to Shyam on credit Rs 30,000 9. Cash received from shyam Rs 20,000 10. Cash paid to Mahesh Rs 10,000 11. Deposited cash into bank Rs 50,000 for opening an account.

3 12. Withdrew cash for personal use Rs 5,000 13. Withdrew cash from bank for office use Rs 10,000 14. Received a cheque from shyam Rs 5,000 15. Deposited Shyam s cheque next day. 16. Paid Mahes by cheque Rs 10,000 17. Paid salary to staff Rs 20,000 18. Paid rent by cheque Rs 6,000 19. Paid interest on loan Rs 5,000 Note. When cheque received is not deposited into the Bank on the same day, the cheque is debited on an account titled Cheques in Hand. Afterwards, when the cheque is deposited into the bank, the account is credited. When a cheque received from a customer is deposited on the same day, the Bank Account is debited directly and the Customer Account is credited. Concept Capsule 6 of Pabitra for April are given below. Journalise them. April 1 Pabitra started business and bought capital in cash 1,00,000 2 Paid into bank 70,000 3 Bought goods for cash 5,000 4 Drew cash from bank for office 1,000 13 Sold to Krishna goods on credit 1,500 20 Bought from shyam goods on credit 2,250 24 Received from Krishna 1,500 28 Paid shyam cash Discount allowed by him 2,150 100 30 Cash sales for the month 8,000 30 Paid rent 500 30 Paid salary to Ram 3,000 Concept Capsule 7 Record the following transactions in a Journal: Jan 1 Paid to Mohan Rs 9,500 in full settlement of his account of Rs 10,000 5 Received from Ram Rs 12,000 in cash and allowed him discount 100 7 Paid salaries 5,000 7 Paid wages 3,000 10 Purchased goods worth Rs 20,000 out of which goods worth Rs 12,000 was on credit from Shyam lal. 15 Goods sold to Rakesh for Rs 2,000. He paid Rs 1,000 immediately.

4 Concept Capsule 8 (Bad Debt, Bad debt Recovery) Journalise the following transactions. Rs500 due from Ramesh has become bad/ irrecoverable. Sohan is declared insolvent. Received from his Official Receiver 60 paise in the rupee on a debt of Rs 1,000 Mohan who owed Rs 2,000 has become insolvent, only 50% received from his estate of 50 paise in the rupee. Received cash for a bad debt written off last year Rs 700 Note. *Recovery of bad debts written off last year is a gain, therefore, it is credited to the Bad Debts Recovered Account. Concept Capsule 9 Journalise the following transactions. Jan 1 Paid into bank for opening a current account 20,000 2 Withdrawn for private expenses 1,000 3 Withdrawn from bank 3,000 4 Withdrawn from bank for private use 2,000 5 Placed on fixed deposit account at bank by transfer from current account 5,000 10 Goods purchased for Rs 2,500 and amount paid by cheque Concept Capsule 10 Record the following transactions in a journal: (i) Withdrawn goods for personal use ( Cost Rs 500, Sales Price Rs 700) (ii) Goods worth Rs 500 given as charity. (iii) A cheque for Rs 5000 received from Rajib deposited into bank was returned dishonoured. Concept Capsule 11 Pass the journal entries for the following transactions: Case 1: Purchased goods from sanjiv worth Rs 40,000 at terms 10% Trade discount and 5% cash discount. Paid amount at the time of purchase itself. Case 2: Purchased goods from Vijay Rs 40,000 on 10% Trade Discount and 5% cash discount. Half of the amount paid at the time of purchase. Concept Capsule 12 Pass the journal entries for the following transactions: Case 1: Sale goods to Anil for Rs 20,000 allowed him 10% Trade discount and 10% cash discount. Received half of the amount by cash and balance half by cheque within specified times. Case 2: Sold goods to Ajay for Rs 50,000 at terms 5% Cash discount and 10% Trade Discount. Half of the amount received by cheque within specified time.

5 Concept Capsule 13 Record the following transactions in a journal: (a) Received cash from Ram for a bad debt written off last year Rs 100 (b) Paid Rs 980 to Sohan on his account for Rs 1000 in settlement. (c) Received Rs 975 from Hari in full settlement of his account for Rs 1000 (d) Bought goods at the list price of Rs 25,000 from Mohan less 20% Trade Discount and 2% Cash discount and paid 40% by cheque. (e) Sold goods to Rakesh at the list price of Rs 50,000 less 20% trade discount and 2% cash discount and paid 50% by cheque. (f) Sold goods to James for Rs 10,000, allowing him a trade discount of 5% and a cash discount of 10%. He paid 1/4 th of the amount in cash at the time of purchase. Concept Capsule 14 Journalise the following: (i) Goods worth Rs 500 were used by the proprietor for domestic purpose. (ii) Rs 200 due from Hari are bad debts. (iii) Goods uninsured worth Rs 3,000 were destroyed by fire. (iv) Goods damaged by fire Rs 1,000 and Insurance Co. accepted claim of Rs 800. (v) Goods costing Rs 500 given as Charity ( sale price Rs 600) (vi) Paid landlord Rs 1500 for rent. 1/3 rd of the premises is occupied by the proprietor for his own residence. (vii) Sold household furniture for Rs 5000 and paid the money into business cash. Concept Capsule 15 Journalise the following transactions in the books of Pabitra Das a trader: May 1 Purchased building and issued cheque 15,00,000 10 Purchased machinery from Remson on credit 2,00,000 15 Bought furniture from Hind Traders for cash 10,000 20 Bought a motor van and issued cheque 10,000 21 Paid Rs 2500 in cash on installation of machinery 5,00,000 25 Bricks, cement, etc. for Rs 1,50,000 and Timber for Rs 2,00,000 purchased for the construction of building. Payment was made by cheque. Concept Capsule 16 Journalise the following transactions in the books of Pabitra Das: (i) (ii) (iii) Paid Rs 5,000 in cash as wages on installation of machinery. Sold goods to Krishna at the list price Rs 20,000, trade discount 10% and cash discount 5%. He paid the amount on the same day and availed the cash discount. Supplied goods costing Rs 6,000 to Mohan, issued invoice at 10% above cost less 5% trade discount.

6 (iv) (v) Goods were distributed from stock as free samples, values Rs 2,500 as part of an advertising campaign. Anjan a customer, returned goods invoiced at Rs 2000 because they were unsuitable. Concept Capsule 17 Pass journal entries for the following: Number 1 Interest due but not received 4000 2 Salaries due to clerks 7500 3 Out of the rent paid this year Rs 2000 relates to the next year. 4 Provide 10% depreciation on furniture costing Rs 5000 5 Provide 10% interest on capital amounting to Rs 1,00,000 6 Goods used in making Furniture ( sale price Rs 2000, cost price Rs 1500) 7 Charge interest on drawings 1000 Concept Capsule 18 Journalise the following transactions: (i) Mr. P. Das started business with cash Rs 1,00,000 and building valued at Rs 5,00,000. (ii) Purchased goods amounting to Rs 2,00,000 out of which goods of Rs 1,80,000 were purchased on credit from D.Lal. (iii) Sold goods on credit to Ramesh Rs 1,60,000. (iv) Received Rs 1,56,000 from Ramesh in full settlement of his account. (v) Paid Rs 1,78,000 to D.lal in full settlement of Rs 1,80,000 due to him. (vi) An old machine with the book value of Rs 80,000 is exchanged for a new machine of Rs 2,40,000. The old machine is valued at Rs 50,000 for exchange purpose by Machine Tools Ltd. (vii) Purchased a machinery from Pele and Sons for Rs 50,000 on credit. (viii) Depreciation of Rs 5000 was provided n the machinery at the end of the year. (ix) Paid income tax Rs 5000 (x) A cheque amounting to Rs 5000 deposited in the bank returned dishonoured. Note: The old machine should be credited with the book value and not the exchange value in order to cancel the old machine account. Concept Capsule 19 Journalise the following transactions in the books of Pabitra Das Bros. March 1 Started business with cash Rs 30,000, goods worth Rs 15,000 and furniture worth Rs 20,000 2 Paid into bank 20,000 3 Bought goods from Mohan bros. on credit 7,000 4 Sold goods to Goyel Bros. on credit 6000 5 Bought an old delivery van for Rs 10,000 for delivering goods to customers 7 Received from travelling salesman for goods sold by him after 3000

7 deducting travelling expenses Rs 150 9 Drawn a cheque for Rs 800 for personal use. 10 Goyel Bros. gave cheque, deposited in the bank 6000 11 Paid to Mohan Bros. by cheque Discount allowed by him 6700 300 13 Paid repairs of furniture 200 13 Received an order for goods from Mahesh* 5000 14 Sold old newspapers 80 15 Interest received from bank 400 16 Paid Rs 300 for expenses on goods sold to Goyel Bros. This amount to be realized from Goyel Bros. 19 Bought goods from Sohan Lal & Sons Paid cartage on these goods 20 Bank intimates that the cheque of Goyal Bros. has been returned dishonored 21 The delivery van bought on March 5 met with accident and salvage was sold for Rs 500 22 Paid rent by cheque 600 23 Salaries for the month of February remain unpaid 300 25 Paid Municipal Taxes in cash 800 31 Depreciation charged on furniture @ 10% p.a Received an order for goods Rs 5000 from Shyam and received Rs 1,000 as advance.* 400 50