Q1. Journalise the following transactions in the books of Mr.

Kumar, post them in the Ledger

and prepare trial balance.
2018 March1 Bought goods for cash Rs. 25,000
March 2 Sold goods for cash Rs. 50,000
March 3 Bought goods for credit from Gopal Rs.19,000
March 5 Sold goods on credit to Milton Rs.8,000
March 7 Received from Milton Rs. 6,000
March 9 Paid to Gopal Rs.5,000
March 20 Bought furniture for cash Rs. 7,000

Solution 1: JOURNAL ENTRY IN THE BOOKS OF MR. KUMAR

Ledger
Date Particulars Folio Dr Cr
2018        
1-Mar Purchase a/c Dr ## 25000  
  To Cash a/c ##   25000
  (Being goods bought for cash)      
         
2-Mar Cash a/c Dr ## 50000  
  To Sales a/c ##   50000
  (Being goods sold for cash)      
         
3-Mar Purchase a/c Dr ## 19000  
  To Gopal's a/c ##   19000
  (Being goods bought for credit from Gopal)      
         
5-Mar Milton's a/c Dr ## 8000  
  To Sales a/c ##   8000
  (Being goods sold on credit to Milton)      
         
7-Mar Cash a/c Dr ## 6000  
  To Milton's a/c ##   6000
  (Being received cash from Milton)      
         
9-Mar Gopal's a/c Dr ## 5000  
   To Cash a/c ##   5000
  (Being cash paid to Gopal)      
         
20-Mar Furniture a/c Dr ## 7000  
  To Cash a/c ##   7000
  (Being furniture bought for cash)      
         

LEDGERS

1. CASH A/C

Dr Cr
Date Particulars J.F. Amount Date Particulars J.F. Amount
2-Mar-18 To Sales a/c 50000 1-Mar-18 By Purchase a/c 25000
7-Mar-18 To Milton a/c 6000 9-Mar-18 By Gopal's a/c 5000
20-Mar-18 By Furniture a/c 7000
31-Mar-18 By Balance c/d 19000

56000 56000
1-Apr-18 To Balance b/d 19000

2. SALES A/C

Dr Cr
Date Particulars J.F. Amount Date Particulars J.F. Amount
31-Mar-18 To Balance c/d 58000 2-Mar-18 By Cash a/c 50000
5-Mar-18 By Milton's a/c 8000

58000 58000
1-Apr-18 By Balance b/d 58000

3. PURCHASE A/C

Dr Cr
 Date Particulars J.F. Amount Date Particulars J.F. Amount
1-Mar-18 To Cash 25000 31-Mar-18 By Balance c/d 44000
3-Mar-18 To Gopal 19000

44000 44000
1-Apr-18 To Balance b/d 44000

4. GOPAL'S A/C

Dr Cr
Date Particulars J.F. Amount Date Particulars J.F. Amount
9-Mar-18 To Cash 5000 3-Mar-18 By Purchase 19000
31-Mar-18 To Balance c/d 14000

19000 19000
1-Apr-18 By Balance b/d 14000

5. MILTON'S A/C

Dr Cr
Date Particulars J.F. Amount Date Particulars J.F. Amount
5-Mar-18 To Sales 8000 7-Mar-18 By Cash 6000
31-Mar-18 By Balance 2000

8000 8000
1-Apr-18 To Balance 2000

6. FURNITURE A/C

Dr Cr
Date Particulars J.F. Amount Date Particulars J.F. Amount
20-Mar-18 To Cash 7000 31-Mar-18 By Balance 7000

7000 7000
1-Apr-18 To Balance 7000

TRIAL BALANCE
S.No
. LEDGER A/C DEBIT (IN Rs.) Credit (in Rs.)
 1 Cash a/c 19000
2 Sales a/c 58000
3 Purchase a/c 44000
4 Gopal's a/c 14000
5 Milton's a/c 2000
6 Furniture a/c 7000
  TOTAL 72000 72000

Problem 2 (10 marks)

Enter the following transactions in journal and post them in the ledger of Mr.Albert and balance
them.
2018, Aug 1 Govindarajan commenced his business with the following assets and liabilities.
Plant and Machinery Rs.2,50,000.
Stock Rs.90,000.
Furniture Rs.7,000.
Cash Rs.50,000.
Sundry creditors Rs.1,50,000.
Aug 2 Sold goods to Sundar Rs. 1,50,000.
Aug 3 Bought goods from Natarajan Rs.65,000.
Aug 4 Sundar paid cash Rs.1,25,000.
Aug 6 Returned damaged goods to Natarajan Rs.2,000.
Aug 10 Paid to Natarajan Rs.28,000.
Aug 31 Paid rent Rs. 5,000. Paid salaries Rs.9,000.

Solution 2: JOURNAL ENTRY

Ledger
Date Particulars Folio Dr Cr
2018        
1-Aug Plant and Machinary a/c Dr 250000
Stock a/c Dr 90000
Furniture a/c Dr 7000
 Cash a/c Dr 50000
To Sundry Creditors 150000
To Capital a/c (Balancing figure) 247000
(Being amount brought in by Govindarajan; Capital found by
deducting liabilities from assets)

2-Aug Sundar's a/c Dr 150000

To Stock a/c 150000
(Being goods sold to Sundar)

3-Aug Stock a/c Dr 65000

To Natarajan's a/c 65000
(Being goods bought from Natarajan)

4-Aug Cash a/c Dr 125000

To Sundar's a/c 125000
(Being cash paid by Sundar)

6-Aug Natarajan a/c Dr 2000

To Stock a/c 2000
(Being damaged goods returned to Natarajan)

10-Aug Natarajan's a/c Dr 28000

To Cash a/c 28000
(Being cash paid to Natarajan)

31-Aug Rent a/c Dr 5000

To Cash a/c 5000
(Being rent paid)

31-Aug Salary a/c Dr 9000

To cash a/c 9000
(Being salary paid)
LEDGERS

1. PLANT AND MACHINARY A/C

Dr Cr
J.F Amoun J.F
Date Particulars . t Date Particulars . Amount
1-Aug-18 To Balance b/d 250000 31-Aug-18 To Balance c/d 250000
 250000 250000
1-Sep-18 By Balance b/d 250000

2. STOCK A/C

Dr Cr
Date Particulars J.F. Amount Date Particulars J.F. Amount
1-Aug-18 To Balance b/d 90000 31-Aug-18 To Balance c/d 90000

90000 90000

1-Sep-18 By Balance b/d 90000

3. FURNITURE A/C

Dr Cr
Amoun
Date Particulars J.F. t Date Particulars J.F. Amount
1-Aug-18 To Balance b/d 7000 31-Aug-18 To Balance c/d 7000

7000 7000

1-Sep-18 By Balance b/d 7000

4. CASH A/C

Dr Cr
Amoun
Date Particulars J.F. t Date Particulars J.F. Amount
1-Aug-18 To Balance b/d 50000 10-Aug-18 By Natarajan 28000
4-Aug-18 To Sundar's a/c 125000 31-Aug-18 By Rent 5000
By Salary 9000
 31-Aug-18 To Balance c/d 133000
175000 175000
1-Sep-18 By Balance b/d 133000

5. SUNDRY CREDITORS A/C

Dr Cr
Amoun
Date Particulars J.F. t Date Particulars J.F. Amount
31-Aug-18 By Balance c/d 150000 1-Aug-18 To Balance c/d 150000

150000 150000

1-Sep-18 To Balance b/d 150000

6. CAPITAL A/C

Dr Cr
Amoun
Date Particulars J.F. t Date Particulars J.F. Amount
31-Aug-18 By Balance c/d 247000 1-Aug-18 To Balance c/d 247000

247000 247000

1-Sep-18 To Balance b/d 247000

7. SUNDAR'S A/C

Dr Cr
Amoun
Date Particulars J.F. t Date Particulars J.F. Amount
2-Aug-18 To Stock a/c 150000 4-Aug-18 By Cash 125000
31-Aug-18 By Balance 25000
150000 150000
 1-Sep-18 By Balance b/d 25000

8. SALES A/C

Dr Cr
Amoun
Date Particulars J.F. t Date Particulars J.F. Amount
31-Aug-18 To Balance c/d 150000 2-Aug-18 By Stock a/c 150000

150000 150000

1-Sep-18 By Balance b/d 150000

9. PURCHASE A/C

Dr Cr
Amoun
Date Particulars J.F. t Date Particulars J.F. Amount
3-Aug-18 To Natarajan a/c 65000 31-Aug-18 By Balance c/d 65000

65000 65000

1-Sep-18 To Balance b/d 65000

10. NATARAJAN'S A/C

Dr Cr
Amoun
Date Particulars J.F. t Date Particulars J.F. Amount
6-Aug-18 To Purchase return 2000 3-Aug-18 By Purchase 65000
10-Aug-18 To Cash 28000  
 31-Aug-18 To Balance c/d 35000

  65000 65000

        1-Sep-18 By Balance b/d   35000

11. RENT A/C

Dr Cr
Amoun
Date Particulars J.F. t Date Particulars J.F. Amount
31-Aug-18 To Cash 5000 31-Aug-18 By Balance c/d 5000

5000 5000

1-Sep-18 To Balance b/d 5000

12. SALARY A/C

Dr Cr
Amoun
Date Particulars J.F. t Date Particulars J.F. Amount
31-Aug-18 To Cash 9000 31-Aug-18 By Balance c/d 9000

9000 9000

1-Sep-18 To Balance b/d 9000

13. PURCHASE RETURN A/C

Dr Cr
Date Particulars J.F. Amount Date Particulars J.F. Amount
31-Aug-18 To Balance c/d 2000 6-Aug-18 By Natarajan 2000
    
  2000 2000
     
        1-Sep-18 By Balance b/d   2000

TRIAL BALANCE
S.No DEBIT (IN Credit (in
. LEDGER A/C Rs.) Rs.)
1 Plant and Machinery a/c 250000
2 Stock a/c 90000
3 Furniture a/c 7000
4 Cash a/c 133000
5 Sundry Creditors a/c 150000
6 Capital a/c 247000
7 Sundar's a/c 25000
8 Sales a/c 150000
9 Purchase 65000
10 Natarajan's a/c 35000
11 Rent a/c 5000
12 Salary a/c 9000
13 Purchase return 2000
  TOTAL 584000 584000

Problem 3 (5 marks)
Prepare accounting equation and balance sheet on the basis of the following :
i. Pandiyan started business with cash Rs.60,000
ii. He purchased furniture Rs.10,000
iii. He paid rent Rs.2,000
iv. He purchased goods on credit from Mr.Mahesh Rs.30,000
v. He sold goods (cost price Rs.20,000) for cash Rs.25,000
Solution 3:
Assets = Capital + Liabilities
Transactions
  Cash + Furniture + Goods = Capital + Creditors
Started
1 business 60000 + 0 + 0 = 60000 + 0
with cash
Rs. 60000
New
60000 + 0 + 0 = 60000 + 0
  balance
Purchased
2 furniture for -10000 + 10000 + 0 = 0 + 0
cash Rs.
10000
New
50000 + 10000 + 0 = 60000 + 0
  balance

3 Paid rent Rs. -2000 + 0 + 0 = -2000 + 0

2000
New
48000 + 10000 + 0 = 58000 + 0
  balance

Purchased
goods on
4 credit from 0 + 0 + 30000 = 58000 + 30000
Mr. Mahesh
Rs. 30000
New
48000 + 10000 + 30000 = 58000 + 30000
  balance
Sold goods
5 costing 25000 + 0 - 20000 = 5000 + 0
20000 for
cash 25000
New
73000 + 10000 + 10000 = 63000 + 30000
  balance
Final
=
  balance 93000 93000

Problem 4 (5 marks)
Hindustan company has incurred the following expenditure and you are required to identify the
capital, revenue and deferred revenue expenses.
i. Rs.60,000 travelling expenses of their sales manager who travelled to Japan to
attend a meeting in order to increase sales – trip was quite successful.
ii. Rs.500 spent for installing machinery.
 iii. Rs.6,00,000 spent on research and development.
iv. Rs.500 paid for fuel.
v. Rs.600 was spent on alteration of a machinery in order to reduce power
consumption.

Solution 4:
Hindustan company has incurred the following expenditure and you are required to identify the
capital, revenue and deferred revenue expenses.

vi. Rs.60,000 travelling expenses of their sales manager who travelled to Japan to
attend a meeting in order to increase sales – trip was quite successful.
Ans i. Deferred revenue expense
vii. Rs.500 spent for installing machinery.
Ans ii. Capital expense
viii. Rs.6,00,000 spent on research and development.
Ans iii. Deferred revenue expense
ix. Rs.500 paid for fuel.
Ans iv. Revenue expense
x. Rs.600 was spent on alteration of a machinery in order to reduce power
consumption.
Ans v. Capital expense