Practice Problems

a. Journalize the following transactions. Also state the nature of each account involved in the journal entry: 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. Dec 1, 2000 Dec 3 Dec 5 Dec 8 Dec 10 Dec 12 Dec 14, Dec 15 Dec 16 Dec 17 Dec 18 Dec 19 Dec 20 Dec 21 Ajith started business with cash Rs 40,000 Paid into the bank Rs 2000 Purchased goods for cash for Rs 15000 Sold goods for cash Rs 6000 Purchased furniture and paid cheque Rs 5000 Sold goods to Aravind Rs 4000 Purchased goods from Amit Rs 10000 Returned goods to Amit Rs 5000 Received from Aravind in full settlement Rs 3960 Withdrew money for personal use Rs 2000 Paid telephone charges Rs 1000 Cash paid to Amit in full settlement Rs 4900 Paid for stationery Rs 200, rent Rs 500, and salaries to staff Rs 2000 Goods distributed by way of free samples Rs 1000

b. Journalize the following transactions: 1 Goods worth Rs 5000 given as charity 2 Received Rs 9750 from Ramakrishnan in full settlement of his account for Rs 10,000 3 Received a first and final dividend of 60 paisa in the rupee from the official receiver of Mr Rajesh, who owed in Rs 10,000 4 Sold to Mohan goods worth 10,000 with 3% cash discount and received Rs 9700 net on account by cheque 5 Bought from Raman and Co. goods worth Rs 50,000 at 10% trade discount and 2% cash discount terms and paid them half the amount in cash 6 Paid Rs 500 in cash as wages on installation of machine 7 Supplied goods costing Rs 1000 to Mohan issued invoice at 20% above cost less 5% trade discount 8 Good worth Rs 2000 were used by the proprietor for personal use 9 Goods un-insured worth Rs 8000 were destroyed by fire

c. Enter the following transactions in the journal of Company Arun & Co for the month of December 2000.

Dec 10 Dec 11

Arun commenced his business with a capital of Bought machinery

10,000 300

Dec Dec Dec Dec Dec Dec Dec Dec Dec Dec Dec Dec Dec

12 13 14 15 16 17 18 19 20 21 22 23 24

Bought goods for cash from Ram Sold goods for cash to Hari Purchased goods from Jai on credit Cash sales to Hari Bought goods from Sunder on credit Credit sales to Hari Bought goods from jai on credit Bought office furniture for cash from A Ltd Received interest from Anil Deposited cash into bank Paid Rent Paid insurance premium Paid to salary

500 4000 2200 2000 1920 3200 3050 700 150 300 1500 1300 800

d. Journalize the following transactions which took place in the business of Mr Ayush

1 2 3 4 5 6 7

M Sundarsanam who owes Rs 2850 pays Rs 2775 in full settlement M/s Adarkar & Co who owe Rs 6000 become insolvent. Only 30% of the amount due is realized Received a cheque from Peterson Rs 5450. Allowed him discount Rs 150 Withdrew for domestic use Rs 900 Issues cheque in favor of M/s Kurshid Ali and Sons on account of purchase of a machinery Rs 7500 Paid Rao and Co Rs 490 in full settlement of a debt of Rs 500 Returned goods to Vardhaman Spinning Mills Ltd of value of Rs 3500