Accounting for Managers
Content
Accounting for Managers
(1st Semester, MBA)
Rules of Accounting:
The three types of accounting rules are there to maintained for transactions are: 1. Personal Accounts 2. Real Accounts 3. Nominal Accounts
Personal Accounts
Personal accounts are the accounts of persons with whom the business is required to deal with. These include accounts of natural and artificial persons such as : Krishna’s A/c, Tata co. A/c, Canara Bank A/c, Sundry debtors A/c etc. the rule of personal account is:“Debit the Receiver Credit the Giver” For example: ‘Mr. Krishna received money from Canara Bank.’ Here the money receiver is Mr. Krishna so, Mr.Krishna is debited. And the money giver is Canara Bank so, Canara Bank is credited. Here Krishna receiver and Canara Bank is giver. Krishna’s A/c - Dr Canara Bank A/c - Cr
Real Accounts
Real accounts are maintained for assets or properties of the business. For example: Building A/c, Machinery A/c, Cash A/c, Furniture A/c, Goodwill, Patent etc. the rules of real account is:“Debit What comes in Credit What goes out” For example: ‘Building purchased by cash’. Here Building comes in to the business so, Building is debited. And Cash goes out or cash given for the purchase of Building so, Cash is credited. Here Building comes in and Cash goes out therefore: “Building A/c - Dr Cash A/c - Cr”
Nominal Accounts
Nominal accounts are accounts where incomes and expenses are recorded. For example: Salaries A/c, Wages A/c, Rent paid A/c, Commission Received A/c, Discount Allowed A/c, Discount Received A/c etc. the rule of nominal account is:“Debit All Expense and Losses Credit All Incomes and Gains” For example: ‘Building Rent paid’ and ‘Commission Received’ Here Building rent is expenses and Commission received is income therefore: Rent A/c - Debit Commission received - Credit
1
I. Problems 1. Classify the following into Personal, Real and Nominal Account:
a) b) c) d) e) f) Sales account Bank account Drawings account Stock account Discount received account Carriage account g) h) i) j) k) l) Royal college account Capital account Purchases account Cash account Stationary account Vijay’s account
2. Classify the following into Personal, Real and Nominal Account:
1) 2) 3) 4) 5) 6) 7) 8) Purchases return account Wages outstanding account Salary account Rent prepaid account Arjun’s account Nanda’s drawings account Sales return account Furniture account 9) Interst paid account 10) Bank of India’s account 11) Goodwill account 12) Advertisement account 13) Bank loan account 14) Postage account 15) Commission received account 16) Insurance premium paid account
3. Classify the following into Personal, Real and Nominal Account:
a) b) c) d) e) f) Buildings account National trading company account Prepaid insurance account Cash account Repairs to machinery account Motor van account g) Basavanugudi sports club account h) Bank deposit account i) Commission received in advance account j) Stationery account
4. Classify the following into Personal, Real and Nominal Account:
1) Investment account 2) Bank Overdraft account 3) Goods account 4) Electricity charges account 5) Copyright account 6) Sales tax account 7) Rani’s account 8) Interest payable account 9) Plant and machinery account 10) Repairs to computer account 11) Bad debts account 12) Depreciation on furniture account 13) Loss by theft account 14) Bangalore city corp. account 15) Mumbai stock exchange account 16) Rahul’s account 17) Premium company account 18) Telephone expenses account 19) Bills receivable account 20) Bank deposit account 21) Loose tools account 22) Bad debts recovered account 23) Charity account 24) Bills payable account 25) Provision for discount on debtors account 26) Provision for discount on creditors account 27) Loss of goods by fire account 28) Provision for bad and doubtful debts account 29) Provision for depreciation account
2
II. Problems: 1. Identify the two accounts involved in the following transactions and identify the type of account:
1) Pavan commenced business with cash Rs.50,000/2) Withdrawn cash from business for personal use Rs.8,000/3) Purchased machinery from H.M.T Rs.8,000/4) Purchased furniture from furniture mart for cash Rs.2,000/5) Received communication Rs.4,000/6) Paid wages Rs.3,000/7) Sold goods Rs.6,000/8) Received loan from Indian Bank Rs.40,000/9) Paid electricity charges Rs.1,000/10) Purchased paper, pen, etc for Rs.200/-
2. Identify the two accounts involved and classify them into following transactions.
1) Opened a current account with Bank of India Rs.20,000/2) Cash purchasesRs.10,000/3) Commission due to Raj Rs.100/4) Commission received from Ramya Rs.400/5) Commission charged to Amar Rs. 250/6) Received loan from Raghu Rs.10,000/7) Withdrawn from Bank of India for office use Rs.12,000/8) Paid rent for building in advance Rs.2,000/9) Salary due to office clerk Rs.1,800/10) Sold furniture for Rs.500/-
III. Problems: 1. Pass Journal entries for the following
a) 1-08-2005: Ganesh started business with cash Rs. 40,000/b) 2-08-2005: Purchased furniture worth Rs.10, 000/c) 3-08-2005: Purchased goods Rs.20, 000/d) 4-08-2005: Sold goods for Rs.10, 000/e) 5-08-2005: Opened a bank A/C with Vijaya bank by depositing Rs.1000/f) 6-08-2005: Received loan from Mr. X Rs.10, 000/-.
2. Journalize the following transactions in the books of Ravi (for Jan 2004)
3
a) 01-01-2004: Commenced business with Rs.25,000/- by selling his bike. b) 02-01-2004: Purchased office furniture for cash Rs. 2000/c) 03-01-2004: Paid for office stationery Rs. 100/d) 04-01-2004: Bought goods from Raju on credit Rs. 3000/e) 06-01-2004: Purchased goods for cash from Vijay Rs.1000/f) 07-01-2004: Sold goods to Sundar on credit Rs.1500/g) 09-01-2004: Sold goods to manohar for cash Rs.500/h) 10-01-2004: Paid cash to raju on A/C Rs.1200/i) 12-01-2004: Received cash from Sundar on a/c Rs.800/j) 15-01-2004: Return goods to Raj Rs 300/k) 18-01-2004: Sunder returns goods to Ravi Rs.200/k) 19-01-2004: Cash sales Rs.600/l) 22-01-2004: Cash purchases Rs.900/m) 23-01-2004: Paid for sundry expenses Rs.50/n) 25-01-2004: Received commission from Singh Rs.550/o) 27-01-2004: Paid office rent of Rs.250/- to land lord p) 28-01-2004: Gave loan to Shankar trading company Rs.4,000/q) 29-01-2004: Paid Salary to manager Rs.700/r) 30-01-2004: Paid Advertisement charges of Rs.100/s) 31-01-2004: Cash withdrawn for personal purpose Rs.100/-
3. Pass the journal for following transactions:
a) 1st April 2004: Anil commenced business with cash Rs.30,000/b) 2nd April 2004: Purchased furniture and paid by cheque Rs.4,000/-
4
c) 3rd April 2004: Deposited cash into bank Rs.10,000/d) 5th April 2004: Bought goods from Arun for Rs.3,000/e) 8th April 2004: Sold goods to Rajesh Rs.2,000/f) 10th April 2004: Bought goods from Santhosh for Rs.800/g) 14th April 2004: Sold goods to Ranga for cash Rs.600/h) 16th April 2004: Paid Arun by cheque in full settlement. i) 19th April 2004: Goods purchased from happy traders Rs.900/j) 20th April 2004: Paid happy traders in cash. k) 21st April 2004: Received interest Rs.60/l) 22nd April 2004: Received commission Rs.40/m) 24th April 2004: Received cheque from Rajesh n) 26th April 2004: Returned goods to Arun Rs.100/o) 28th April 2004: Rajesh returned goods to us Rs.40/p) 29th April 2004: Paid office rent Rs.300/q) 30th April 2004: Paid Manager salary of Rs.700/- by cheque
4. Journalize the following transaction in books of Bhaskar.
a) 1-4-2005: Started business by investing Rs.80,000 in Bank b) 2-4-2005: Purchased goods from X company for Rs.40,000 c) 3-4-2005: Sold goods to Y company for Rs.60,000 d) 4-4-2005: Received a cheque from Y company for Rs.35,000 in part settlement e) 5-4-2005: Received a cheque from Y company in full settlement f) 7-4-2005: A cheque for Rs.25,000 received from Y company was endorsed to Ajay g) 8-4-2005: Banker charged Rs.100 for services h) 9-4-2005: Banker allowed Rs.300 as inertest on bank deposits
5
i) 10-4-2005: As per our instruction banker paid electricity bill of Rs.300/j) 11-4-2005: Banker received Rs.1,000 by way of interest on investments from TATA chemicals Ltd. On behalf of business k) 12-4-2005: Mr. Harish a customer deposited Rs.1,000 directly to our bank A/c l) 13-4-2005: Cheque for Rs.35,000 received from Y Co. was deposited into bank for collection
5. Journalize the following transaction in books of Ajay.
1) 1-3-2006: Mr. Ajay started business with cash Rs. 70,000 2) 5-3-2006: He introduced building worth Rs.2,00,000 as additional capital 3) 11-3-2006: He introduced debtors worth Rs.10,000 into the business 4) 18-3-2006: Furniture has been introduced worth Rs.1,000 as capital 5) 21-3-2006: Introduced creditors worth Rs.20,000 into business
IV. Problems: Opening Entry:
1. Mr. X commenced a business with Rs.1,00,000 cash of his own and Rs.20,000 borrowed from his wife. Pass journal entry. 2. Mr, Y commenced business with Rs.2,00,000 of which Rs.40,000 borrowed from a friend and Rs.60,000 from Canara bank. Pass journal entry. 3. Mr. Z commenced business with following assets and liabilities: Cash in hand – Rs.20,000 Cash at Bank – Rs.30,000 Stock in hand – Rs.40,000 Machinery – Rs.1,00,000 Furniture – Rs.60,000 Buildings – Rs.2,00,000 Due by Ganesh – Rs.20,000 Due to Arjun – Rs.70,000 Pass an opening entry Pass an opening entry. Murali commenced business on 1st Jan 2007. Cash in hand – Rs.20,000 Cash at bank – Rs.5,000
6
4.
Sundry debtors – Rs.40,000 Stock of goods – Rs.1,20,000 Furniture – Rs.40,000 Buildings Rs.2,00,000 Sundry Creditors – Rs.20,000 Bills payable – Rs.10,000
5.
Mr. Vijay started business with Rs.5,00,000 of which 1,50,000 borrowed from ICICI Bank, Rs.2,00,000 borrowed from his friend, and Rs.1,50,000 is his own cash.
V. Problems: 1. Journalise the following transaction in the books of Shaker.
a) 1-04-2007 Started business with following assets: Cash Rs.5,000, Vehicle Rs.3,000, Furniture Rs.1,000, Stock Rs.7,000, Debtors Rs.3,000. b) 2-04-2007 Sold goods to Rajesh Rs.5,000 and received 50% in cash c) 3-04-2007 Purchased goods from Ramesh Rs.10,000 out of which Rs.6,000 was on credit d) 4-04-2007 Paid salaries Rs.500 and wages Rs.200 e) 5-04-2007 Received Rs.800 out of which Rs.500 as commission and Rs.300 as interest f) 6-04-2007 Paid Rs.300 as commission and Rs.200 as interest paid by cheque g) 8-04-2007 Purchased goods from Ganesh for Rs.10,000 at a trade discount of 10% h) 9-04-2007 Returned 50% of the above purchases i) 10-4-2007 Settled the account of Ganesh who allowed as a discount of Rs.100 j) 11-4-2007 Borrowed Rs.5,000 as loan from Mr.Raj k) 12-4-2007 Sold goods to Gopal Rs.600 l) 14-4-2007 Received Rs.590 from Gopal in full settlement m) 16-4-2007 Repaid Raj’s loan with interest of Rs.50
2. Pass journal entries in books of Ganesh:
a) b) c) d) Commenced business with cash Rs.10,000 and goods Rs.8,000 Goods given away as samples Rs.900 Paid salary by cheque Rs.600 Received commission Rs.2,000
7
e) Purchased a building from Amar for Rs.1,00,000
3. Journalise the following transaction in books of Venkatesh
1) 1-2-2008 Started business with following assets and liabilities: i) Cash Rs.3,000 ii) Goods in hand Rs.10,000 iii) Furniture Rs.6,000 iv) Building Rs.2,00,000 v) Due by Narayan Rs.6,000 vi) Due to Krishna and Damodar Rs.8,000 and Rs.17,000 2) 2-02-2008 Purchased goods from Anil subject to a trade discount of 5% for Rs.10,000 3) 3-02-2008 Sold goods to Manoj subject to trade discount of 3% for Rs.5,000 4) 8-02-2008 Received from Narayan Rs.5,800 in full settlement of his account 5) 12-2-2008 Received from Manoj Rs.4,500 in full settlement of his account 6) 15-2-2008 Paid Anil Rs.9,000 in full settlement 7) 25-2-2008 Sold gods for cash Rs.20,000 8) 26-2-2008 Paid Krishna Rs.8,000 ---------------------- o ------------------------
1. Pass compound journal entry for the following: a) 1-7-2006 George commenced business with cash Rs.10,000, stock Rs.2,000 and furniture Rs. 8,000, machinery Rs.10,000. b) 2-7-2006 Purchased goods for cash Rs.2,000, from ‘C’ Rs. 1,000 and ‘D’ on credit Rs.3,000 c) 4-7-2006 Sold goods to ‘Z’ for cash Rs.4,000 and on credit Rs.6,000 d) 6-7-2006 Sold goods to ‘M’ Rs.4,000 and to ‘N’ Rs.6,000
8
e) 8-7-2006 Received cash from ‘Z’ Rs.5,000 and allowed him discount of Rs.50 f) 10-7-2006 Paid ‘C’ Rs.980 in full settlement of his account g) 11-7-2006 Paid salaries Rs.1,000, rent Rs.800, postage Rs.100 h) 13-7-2006 Received commission Rs.600 and rent Rs.1,500 i) 15-7-2006 Proprietor took cash of Rs.500 and goods of Rs.300 from business for personal use. j) 18-7-2006 Sold goods to Amar Rs.5,000 and received Rs.2,000 k) 20-7-2006 Purchased goods from Arjun Rs. 8,000 and paid him Rs.4,000 l) 22-7-2006 Brought goods worth Rs.2,000 and paid carriage Rs.100 2. Pass compound journal entry for the following: a) 1-1-2005 Madhu started business with cash Rs.24,000 a. Loan from Mr. Jain Rs.12,000 b. Furniture Rs.16,000 c. Stock of stationery Rs.800 b) 2-1-2005 Opened a bank account and deposited Rs.5,000 c) 3-1-2005 Bought stationary for cash Rs.1,400 d) 5-1-2005 Purchased from Shanti traders, furniture Rs.1,200 a. Instruments Rs.1,000 b. Stationery Rs.900 c. A cheque was sent to them in full settlement of their bill e) 8-1-2005 Cash sales Rs2,000 f) 10-1-2005 Cash sales Rs.2,000 g) 15-1-2005 Goods worth Rs.500 were defective and returned to Shanti traders h) 20-1-2005 Sold old furniture for cash Rs.1,000 i) 25-1-2005 Cash purchases Rs.1,100 j) 28-1-2005 Credit sales to Shanti traders Rs.500 k) 31-1-2005 Received amount due from Shanti traders. 3.
9
(1st Semester, MBA)
Rules of Accounting:
The three types of accounting rules are there to maintained for transactions are: 1. Personal Accounts 2. Real Accounts 3. Nominal Accounts
Personal Accounts
Personal accounts are the accounts of persons with whom the business is required to deal with. These include accounts of natural and artificial persons such as : Krishna’s A/c, Tata co. A/c, Canara Bank A/c, Sundry debtors A/c etc. the rule of personal account is:“Debit the Receiver Credit the Giver” For example: ‘Mr. Krishna received money from Canara Bank.’ Here the money receiver is Mr. Krishna so, Mr.Krishna is debited. And the money giver is Canara Bank so, Canara Bank is credited. Here Krishna receiver and Canara Bank is giver. Krishna’s A/c - Dr Canara Bank A/c - Cr
Real Accounts
Real accounts are maintained for assets or properties of the business. For example: Building A/c, Machinery A/c, Cash A/c, Furniture A/c, Goodwill, Patent etc. the rules of real account is:“Debit What comes in Credit What goes out” For example: ‘Building purchased by cash’. Here Building comes in to the business so, Building is debited. And Cash goes out or cash given for the purchase of Building so, Cash is credited. Here Building comes in and Cash goes out therefore: “Building A/c - Dr Cash A/c - Cr”
Nominal Accounts
Nominal accounts are accounts where incomes and expenses are recorded. For example: Salaries A/c, Wages A/c, Rent paid A/c, Commission Received A/c, Discount Allowed A/c, Discount Received A/c etc. the rule of nominal account is:“Debit All Expense and Losses Credit All Incomes and Gains” For example: ‘Building Rent paid’ and ‘Commission Received’ Here Building rent is expenses and Commission received is income therefore: Rent A/c - Debit Commission received - Credit
1
I. Problems 1. Classify the following into Personal, Real and Nominal Account:
a) b) c) d) e) f) Sales account Bank account Drawings account Stock account Discount received account Carriage account g) h) i) j) k) l) Royal college account Capital account Purchases account Cash account Stationary account Vijay’s account
2. Classify the following into Personal, Real and Nominal Account:
1) 2) 3) 4) 5) 6) 7) 8) Purchases return account Wages outstanding account Salary account Rent prepaid account Arjun’s account Nanda’s drawings account Sales return account Furniture account 9) Interst paid account 10) Bank of India’s account 11) Goodwill account 12) Advertisement account 13) Bank loan account 14) Postage account 15) Commission received account 16) Insurance premium paid account
3. Classify the following into Personal, Real and Nominal Account:
a) b) c) d) e) f) Buildings account National trading company account Prepaid insurance account Cash account Repairs to machinery account Motor van account g) Basavanugudi sports club account h) Bank deposit account i) Commission received in advance account j) Stationery account
4. Classify the following into Personal, Real and Nominal Account:
1) Investment account 2) Bank Overdraft account 3) Goods account 4) Electricity charges account 5) Copyright account 6) Sales tax account 7) Rani’s account 8) Interest payable account 9) Plant and machinery account 10) Repairs to computer account 11) Bad debts account 12) Depreciation on furniture account 13) Loss by theft account 14) Bangalore city corp. account 15) Mumbai stock exchange account 16) Rahul’s account 17) Premium company account 18) Telephone expenses account 19) Bills receivable account 20) Bank deposit account 21) Loose tools account 22) Bad debts recovered account 23) Charity account 24) Bills payable account 25) Provision for discount on debtors account 26) Provision for discount on creditors account 27) Loss of goods by fire account 28) Provision for bad and doubtful debts account 29) Provision for depreciation account
2
II. Problems: 1. Identify the two accounts involved in the following transactions and identify the type of account:
1) Pavan commenced business with cash Rs.50,000/2) Withdrawn cash from business for personal use Rs.8,000/3) Purchased machinery from H.M.T Rs.8,000/4) Purchased furniture from furniture mart for cash Rs.2,000/5) Received communication Rs.4,000/6) Paid wages Rs.3,000/7) Sold goods Rs.6,000/8) Received loan from Indian Bank Rs.40,000/9) Paid electricity charges Rs.1,000/10) Purchased paper, pen, etc for Rs.200/-
2. Identify the two accounts involved and classify them into following transactions.
1) Opened a current account with Bank of India Rs.20,000/2) Cash purchasesRs.10,000/3) Commission due to Raj Rs.100/4) Commission received from Ramya Rs.400/5) Commission charged to Amar Rs. 250/6) Received loan from Raghu Rs.10,000/7) Withdrawn from Bank of India for office use Rs.12,000/8) Paid rent for building in advance Rs.2,000/9) Salary due to office clerk Rs.1,800/10) Sold furniture for Rs.500/-
III. Problems: 1. Pass Journal entries for the following
a) 1-08-2005: Ganesh started business with cash Rs. 40,000/b) 2-08-2005: Purchased furniture worth Rs.10, 000/c) 3-08-2005: Purchased goods Rs.20, 000/d) 4-08-2005: Sold goods for Rs.10, 000/e) 5-08-2005: Opened a bank A/C with Vijaya bank by depositing Rs.1000/f) 6-08-2005: Received loan from Mr. X Rs.10, 000/-.
2. Journalize the following transactions in the books of Ravi (for Jan 2004)
3
a) 01-01-2004: Commenced business with Rs.25,000/- by selling his bike. b) 02-01-2004: Purchased office furniture for cash Rs. 2000/c) 03-01-2004: Paid for office stationery Rs. 100/d) 04-01-2004: Bought goods from Raju on credit Rs. 3000/e) 06-01-2004: Purchased goods for cash from Vijay Rs.1000/f) 07-01-2004: Sold goods to Sundar on credit Rs.1500/g) 09-01-2004: Sold goods to manohar for cash Rs.500/h) 10-01-2004: Paid cash to raju on A/C Rs.1200/i) 12-01-2004: Received cash from Sundar on a/c Rs.800/j) 15-01-2004: Return goods to Raj Rs 300/k) 18-01-2004: Sunder returns goods to Ravi Rs.200/k) 19-01-2004: Cash sales Rs.600/l) 22-01-2004: Cash purchases Rs.900/m) 23-01-2004: Paid for sundry expenses Rs.50/n) 25-01-2004: Received commission from Singh Rs.550/o) 27-01-2004: Paid office rent of Rs.250/- to land lord p) 28-01-2004: Gave loan to Shankar trading company Rs.4,000/q) 29-01-2004: Paid Salary to manager Rs.700/r) 30-01-2004: Paid Advertisement charges of Rs.100/s) 31-01-2004: Cash withdrawn for personal purpose Rs.100/-
3. Pass the journal for following transactions:
a) 1st April 2004: Anil commenced business with cash Rs.30,000/b) 2nd April 2004: Purchased furniture and paid by cheque Rs.4,000/-
4
c) 3rd April 2004: Deposited cash into bank Rs.10,000/d) 5th April 2004: Bought goods from Arun for Rs.3,000/e) 8th April 2004: Sold goods to Rajesh Rs.2,000/f) 10th April 2004: Bought goods from Santhosh for Rs.800/g) 14th April 2004: Sold goods to Ranga for cash Rs.600/h) 16th April 2004: Paid Arun by cheque in full settlement. i) 19th April 2004: Goods purchased from happy traders Rs.900/j) 20th April 2004: Paid happy traders in cash. k) 21st April 2004: Received interest Rs.60/l) 22nd April 2004: Received commission Rs.40/m) 24th April 2004: Received cheque from Rajesh n) 26th April 2004: Returned goods to Arun Rs.100/o) 28th April 2004: Rajesh returned goods to us Rs.40/p) 29th April 2004: Paid office rent Rs.300/q) 30th April 2004: Paid Manager salary of Rs.700/- by cheque
4. Journalize the following transaction in books of Bhaskar.
a) 1-4-2005: Started business by investing Rs.80,000 in Bank b) 2-4-2005: Purchased goods from X company for Rs.40,000 c) 3-4-2005: Sold goods to Y company for Rs.60,000 d) 4-4-2005: Received a cheque from Y company for Rs.35,000 in part settlement e) 5-4-2005: Received a cheque from Y company in full settlement f) 7-4-2005: A cheque for Rs.25,000 received from Y company was endorsed to Ajay g) 8-4-2005: Banker charged Rs.100 for services h) 9-4-2005: Banker allowed Rs.300 as inertest on bank deposits
5
i) 10-4-2005: As per our instruction banker paid electricity bill of Rs.300/j) 11-4-2005: Banker received Rs.1,000 by way of interest on investments from TATA chemicals Ltd. On behalf of business k) 12-4-2005: Mr. Harish a customer deposited Rs.1,000 directly to our bank A/c l) 13-4-2005: Cheque for Rs.35,000 received from Y Co. was deposited into bank for collection
5. Journalize the following transaction in books of Ajay.
1) 1-3-2006: Mr. Ajay started business with cash Rs. 70,000 2) 5-3-2006: He introduced building worth Rs.2,00,000 as additional capital 3) 11-3-2006: He introduced debtors worth Rs.10,000 into the business 4) 18-3-2006: Furniture has been introduced worth Rs.1,000 as capital 5) 21-3-2006: Introduced creditors worth Rs.20,000 into business
IV. Problems: Opening Entry:
1. Mr. X commenced a business with Rs.1,00,000 cash of his own and Rs.20,000 borrowed from his wife. Pass journal entry. 2. Mr, Y commenced business with Rs.2,00,000 of which Rs.40,000 borrowed from a friend and Rs.60,000 from Canara bank. Pass journal entry. 3. Mr. Z commenced business with following assets and liabilities: Cash in hand – Rs.20,000 Cash at Bank – Rs.30,000 Stock in hand – Rs.40,000 Machinery – Rs.1,00,000 Furniture – Rs.60,000 Buildings – Rs.2,00,000 Due by Ganesh – Rs.20,000 Due to Arjun – Rs.70,000 Pass an opening entry Pass an opening entry. Murali commenced business on 1st Jan 2007. Cash in hand – Rs.20,000 Cash at bank – Rs.5,000
6
4.
Sundry debtors – Rs.40,000 Stock of goods – Rs.1,20,000 Furniture – Rs.40,000 Buildings Rs.2,00,000 Sundry Creditors – Rs.20,000 Bills payable – Rs.10,000
5.
Mr. Vijay started business with Rs.5,00,000 of which 1,50,000 borrowed from ICICI Bank, Rs.2,00,000 borrowed from his friend, and Rs.1,50,000 is his own cash.
V. Problems: 1. Journalise the following transaction in the books of Shaker.
a) 1-04-2007 Started business with following assets: Cash Rs.5,000, Vehicle Rs.3,000, Furniture Rs.1,000, Stock Rs.7,000, Debtors Rs.3,000. b) 2-04-2007 Sold goods to Rajesh Rs.5,000 and received 50% in cash c) 3-04-2007 Purchased goods from Ramesh Rs.10,000 out of which Rs.6,000 was on credit d) 4-04-2007 Paid salaries Rs.500 and wages Rs.200 e) 5-04-2007 Received Rs.800 out of which Rs.500 as commission and Rs.300 as interest f) 6-04-2007 Paid Rs.300 as commission and Rs.200 as interest paid by cheque g) 8-04-2007 Purchased goods from Ganesh for Rs.10,000 at a trade discount of 10% h) 9-04-2007 Returned 50% of the above purchases i) 10-4-2007 Settled the account of Ganesh who allowed as a discount of Rs.100 j) 11-4-2007 Borrowed Rs.5,000 as loan from Mr.Raj k) 12-4-2007 Sold goods to Gopal Rs.600 l) 14-4-2007 Received Rs.590 from Gopal in full settlement m) 16-4-2007 Repaid Raj’s loan with interest of Rs.50
2. Pass journal entries in books of Ganesh:
a) b) c) d) Commenced business with cash Rs.10,000 and goods Rs.8,000 Goods given away as samples Rs.900 Paid salary by cheque Rs.600 Received commission Rs.2,000
7
e) Purchased a building from Amar for Rs.1,00,000
3. Journalise the following transaction in books of Venkatesh
1) 1-2-2008 Started business with following assets and liabilities: i) Cash Rs.3,000 ii) Goods in hand Rs.10,000 iii) Furniture Rs.6,000 iv) Building Rs.2,00,000 v) Due by Narayan Rs.6,000 vi) Due to Krishna and Damodar Rs.8,000 and Rs.17,000 2) 2-02-2008 Purchased goods from Anil subject to a trade discount of 5% for Rs.10,000 3) 3-02-2008 Sold goods to Manoj subject to trade discount of 3% for Rs.5,000 4) 8-02-2008 Received from Narayan Rs.5,800 in full settlement of his account 5) 12-2-2008 Received from Manoj Rs.4,500 in full settlement of his account 6) 15-2-2008 Paid Anil Rs.9,000 in full settlement 7) 25-2-2008 Sold gods for cash Rs.20,000 8) 26-2-2008 Paid Krishna Rs.8,000 ---------------------- o ------------------------
1. Pass compound journal entry for the following: a) 1-7-2006 George commenced business with cash Rs.10,000, stock Rs.2,000 and furniture Rs. 8,000, machinery Rs.10,000. b) 2-7-2006 Purchased goods for cash Rs.2,000, from ‘C’ Rs. 1,000 and ‘D’ on credit Rs.3,000 c) 4-7-2006 Sold goods to ‘Z’ for cash Rs.4,000 and on credit Rs.6,000 d) 6-7-2006 Sold goods to ‘M’ Rs.4,000 and to ‘N’ Rs.6,000
8
e) 8-7-2006 Received cash from ‘Z’ Rs.5,000 and allowed him discount of Rs.50 f) 10-7-2006 Paid ‘C’ Rs.980 in full settlement of his account g) 11-7-2006 Paid salaries Rs.1,000, rent Rs.800, postage Rs.100 h) 13-7-2006 Received commission Rs.600 and rent Rs.1,500 i) 15-7-2006 Proprietor took cash of Rs.500 and goods of Rs.300 from business for personal use. j) 18-7-2006 Sold goods to Amar Rs.5,000 and received Rs.2,000 k) 20-7-2006 Purchased goods from Arjun Rs. 8,000 and paid him Rs.4,000 l) 22-7-2006 Brought goods worth Rs.2,000 and paid carriage Rs.100 2. Pass compound journal entry for the following: a) 1-1-2005 Madhu started business with cash Rs.24,000 a. Loan from Mr. Jain Rs.12,000 b. Furniture Rs.16,000 c. Stock of stationery Rs.800 b) 2-1-2005 Opened a bank account and deposited Rs.5,000 c) 3-1-2005 Bought stationary for cash Rs.1,400 d) 5-1-2005 Purchased from Shanti traders, furniture Rs.1,200 a. Instruments Rs.1,000 b. Stationery Rs.900 c. A cheque was sent to them in full settlement of their bill e) 8-1-2005 Cash sales Rs2,000 f) 10-1-2005 Cash sales Rs.2,000 g) 15-1-2005 Goods worth Rs.500 were defective and returned to Shanti traders h) 20-1-2005 Sold old furniture for cash Rs.1,000 i) 25-1-2005 Cash purchases Rs.1,100 j) 28-1-2005 Credit sales to Shanti traders Rs.500 k) 31-1-2005 Received amount due from Shanti traders. 3.
9
