P3.6 Ambassadors Private Limited is a public relations firm.

rm. On July 31, 1997, the company’s trial balance was as shown
below:

AMBASSADORS (PVT) LTD

Trial Balance
July 31, 1997
Cash in hand (110) Rs. 2,000
Bank (111) 100,000
Debtors (113) 55,000
Supplies (115) 6,100
Office equipment (141) 42,000
Creditors (211) Rs. 26,000
Kamran’s capital (311) 179,100
Rs. 205,100 Rs. 205,100

During the month of August, the company completed the following transactions:
Aug 2 Paid rent for August, Rs. 6,500 by cheque.
3 Received cash from customers on account, Rs. 23,000 out of which Rs. 20,000 were immediately deposited
in bank.
7 Ordered supplies, Rs. 3,800.
10 Billed customers for services provided, Rs. 28,000.
12 Made payment to creditors, Rs. 11,000 by cheque.
15 Paid salaries for first half of August, Rs. 19,000 by cheque.
16 Received the supplies ordered on August 7 and agreed to pay for them in 30 days.
17 Discovered some of the supplies were not as ordered and returned them for full credit, Rs. 800.
19 Received cash from a customer for services provided, Rs. 48,000.
24 Paid utility bill for August, Rs. 4,600 by cash.
25 Paid telephone bill for August, Rs. 2,200 by cash.
26 Received a bill, to be paid in September, for advertisements placed during the month of August in the local
newspaper Rs. 7,000.
29 Billed customer for services provided, Rs. 27,000.
30 Paid salaries for last half of August, Rs. 19,000 in cash.
31 Withdrew cash for personal use, Rs. 12,000 from bank.

Required
i Enter the above transactions in the general journal.
ii Open accounts in the ledger for the accounts in the trial balance plus the following accounts: Kamran’s
withdrawals (312); public relations fees (411); salaries expense (511); rent expense (512); utility expense (513);
telephone expense (514); and advertising expense (515).
iii Enter the July 31 account balances from the trial balance to the appropriate ledger account.
iv Post the entries to the ledger accounts. Be sure to make the appropriate posting references in the journal and ledger
as you post.
v Prepare a trial balance as of August 31, 1997.
 GENERAL JOURNAL

Date Description Debit Credit

Rent Expense 6500
Aug 2 Bank 6500
Paid rent for August, Rs. 6,500 by cheque.
Cash Revenue 23000
Bank 20000
Aug 3 Cash in hand 3000
Received cash from customers on account, Rs. 23,000 out of which Rs. 20,000 were immediately
deposited in bank.
No Entry Required as only ordered
Aug 7
Ordered supplies, Rs. 3,800.
Debtors 28000
Aug 10 Services Revenue 28000
Billed customers for services provided, Rs. 28,000.
Creditors 11000
Aug 12 Bank 11000
Made payment to creditors, Rs. 11,000 by cheque.
Salaries Expense 19000
Aug 15 Bank 19000
Paid salaries for first half of August, Rs. 19,000 by cheque.
Creditors 3800
Aug 16 Supplies 3800
Received the supplies ordered on August 7 and agreed to pay for them in 30 days.
Creditors 800
Aug 17 Supplies Returned 800
Discovered some of the supplies were not as ordered and returned them for full credit, Rs. 800.
Services revenue 48000
Aug 19 Cash 48000
Received cash from a customer for services provided, Rs. 48,000.
Utility bill expense 4600
Aug 24 Cash 4600
Paid utility bill for August, Rs. 4,600 by cash.
Tel bill expense 2200
Aug 25 Cash 2200
Paid telephone bill for August, Rs. 2,200 by cash.
Bill 7000
Creditors 7000
Aug 26
Received a bill, to be paid in September, for advertisements placed during the month of August in
the local newspaper Rs. 7,000.
Debtors 27000
Aug 29 Services Revenue 27000
Billed customer for services provided, Rs. 27,000.
Salaries Expense 19000
Aug 30 Cash 19000
Paid salaries for last half of August, Rs. 19,000 in cash.
Personal Drawings 12000
Aug 31 Bank 12000
Withdrew cash for personal use, Rs. 12,000 from bank.

Ledger Account
 AMBASSADORS (PVT) LTD
Trial Balance
July 31, 1997
Cash in hand (110) Rs. 2,000
Bank (111) 100,000
Debtors (113) 55,000
Supplies (115) 6,100
Office equipment (141) 42,000
Creditors (211) Rs. 26,000
Kamran’s capital (311) 179,100
Rs. 205,100 Rs. 205,100

Kamran’s withdrawals (312); public relations fees (411); salaries expense (511); rent expense (512); utility expense (513);
telephone expense (514); and advertising expense (515) added in august bill

Ambassador Private Limited

Trial Balance
as at August 31, 1997
Dr. Cr.
CASH 29400
BANK 71500
DEBTORS 110800
CREDITORS 25800
SUPPLIES 9100
UTITLITY BILL (513) 4600
TELEPHONE BILL (514) 7000
REVENUE 123000
SALARIES (511) 38000
DRAWINGS (312) 12000
RENT (512) 6500
OFFICE EQPT 42000
Advertising expense (515) ? ?
KAMRAN CAPITAL 179100

Rs 330900 Rs 327900