JAIBB

ACCOUNTING FOR FINANCIAL SERVICES (AFS)

MATHEMATICS

JOURNAL, LEDGER, TRIAL BALANCE

Md. Anisur Rahman (Parvej), SO (IT), ICTD, BDBL

 Question # 1 [June-2013]
 Mr. M. Khan opened the Campus Laundry on January 1, 2013. During the first month
of operations the following transactions occur :—
Jan 1 Khan invested Tk. 20,000 cash.
Jan 2 The company paid Tk. 1,000 cash for store rent.
Jan 3 Purchased washers and dryers for Tk. 25,000, paying Tk. 10,000 in cash
and signing a Tk. 15,000, 6-month, 12% note.
Jan 4 Paid Tk. 1,200 for a one-year insurance policy.
Jan 10 Received a bill from the ‘Daily News’ for advertising the opening of the
Laundry Tk. 200.
Jan 20 Khan withdrew Tk. 700 cash for personal use.
Jan 30 The company determined that cash receipts for laundry services for the
month were Tk. 6,200.
The chart of accounts followed by M. Khan includes :—
Cash, M. Khan Capital, M. Khan Drawing, Rent Expense, Laundry Equipment, Notes
Payable, Prepaid Insurance, Advertising Expenses, Accounts Payable, Service
Revenue.
Requirements :
(i). Journalize the transactions;
(ii). Post the transactions to the Ledgers;
(iii). Prepare a Trial Balance at January 31;
Answer : 1 (i). Journal Entry
Mr. M. Khan
Journal Entry
Date Account Titles and Explanation L.F Debit (Tk.) Credit (Tk.)
2013
Jan-1 Cash 20,000
Mr. M. Khan Capital 20,000
(Cash invested as Capital)
Jan-2 Rent Expenses 1,000
Cash 1,000
(Store rent paide in Cash)
Jan-3 Laundry Equipments 25,000
Cash 10,000
Note Payable 15,000
(Purchase Laundry equipments by cash and
note)
Jan-4 Prepaid Insurance 1,200
Cash 1,200
(Insurance Premium paid in cash for 1 year)
Md. Anisur Rahman (Parvej), SO (IT), ICTD, BDBL 2
 Date Account Titles and Explanation L.F Debit (Tk.) Credit (Tk.)
Jan-10 Advertisement Expenses 200
Accounts Payable 200
(Advertisement bill paid on account)
Jan-20 Mr. M. Khan Drawings 700
Cash 700
(Withdrew cash for personal use)
Jan-30 Cash 6,200
Service Revenue 6,200
(Received cash for laundry services)
54,300 54,300

Answer : 1 (ii). Ledger Entries

Cash Account Account No. - 01

Date Explanation Ref. Debit (Tk.) Credit (Tk.) Balance (Tk.)
Jan-1 Owner’s Investment 20,000 — 20,000
Jan-2 Rent Expenses 1,000 19,000
Jan-3 Laundry Equipments 10,000 9,000
Jan-4 Prepaid Insurance 1,200 7,800
Jan-20 Mr. M. Khan Drawings 700 7,100
Jan-30 Service Revenue 6,200 13,300

M. Khan Capital Account Account No. - 02

Date Explanation Ref. Debit (Tk.) Credit (Tk.) Balance (Tk.)
Jan-1 Cash 20,000 20,000

Rent Expenses Account Account No. - 03

Date Explanation Ref. Debit (Tk.) Credit (Tk.) Balance (Tk.)
Jan-2 Cash 1,000 1,000

Laundry Equipments Account Account No. - 04

Date Explanation Ref. Debit (Tk.) Credit (Tk.) Balance (Tk.)
Jan-03 Cash 10,000 10,000
April-30 Note Payabble 15,000 25,000

Note Payable Account Account No. - 05

Date Explanation Ref. Debit (Tk.) Credit (Tk.) Balance (Tk.)
Jan-3 Laundry Equipments 15,000 15,000

Md. Anisur Rahman (Parvej), SO (IT), ICTD, BDBL 3

 Prepaid Insurance Account Account No. - 06
Date Explanation Ref. Debit (Tk.) Credit (Tk.) Balance (Tk.)
Jan-4 Cash 1,200 1,200

Advertisement Expenses Account Account No. - 07

Date Explanation Ref. Debit (Tk.) Credit (Tk.) Balance (Tk.)
Jan-10 Accounts Payable 200 200

Accounts Payable Account Account No. - 08

Date Explanation Ref. Debit (Tk.) Credit (Tk.) Balance (Tk.)
Jan-10 Advertisement Expenses 200 200

M. Khan’s Drawings Account Account No. - 09

Date Explanation Ref. Debit (Tk.) Credit (Tk.) Balance (Tk.)
Jan-20 Cash 700 700

Service Revenue Account Account No. - 10

Date Explanation Ref. Debit (Tk.) Credit (Tk.) Balance (Tk.)
Jan-30 Cash 6,200 6,200
Answer : 1 (iii). Trial Balance

Mr. M. Khan
Trial Balance
As at January 31, 2013

Debit Credit
Account No. Account Titles Ref. (Tk.) (Tk.)
# 01 Cash 13,300
# 03 Rent Expenses Account 1,000
# 04 Laundry Equipments Account 25,000
# 06 Prepaid Insurance Account 1,200
# 07 Advertisement Expenses Account 200
# 09 M. Khan’s Drawings 700
# 02 M. Khan Capital Account 20,000
# 05 Notes Payable Account 15,000
# 08 Accounts Payable Account 200
# 10 Service Revenue Account 6,200
Total 41,400 41,400


Md. Anisur Rahman (Parvej), SO (IT), ICTD, BDBL 4

 Question # 2 [December-2012]
 The Adventure Park was started on April 1 by Al Rossy. The following selected
events and transactions occured during April :—
April 1 Rossy invested Tk. 50,000 cash in the business.
April 4 Purchased land costing Tk. 30,000 for cash.
April 8 Incurred advertising expenses of Tk. 1,800 on account.
April 11 Paid salaries to employees Tk. 15,000.
April 12 Hired a park manager at a salary of Tk. 4,000 per month effective May
1.
April 13 Paid Tk. 1,500 cash for a one year insurance policy.
April 17 Withdrew Tk. 600 cash for personal use.
April 20 Received Tk. 5,700 in cash for admission fees.
April 25 Sold 100 coupon books for Tk. 25 each. Each book contains 10 coupons
that entitle the holder to one admission to the park.
April 30 Received Tk. 5,900 in cash admission fees.
April 30 Paid Tk. 700 on account for advertising incurred on April 8.
Al Rossy uses the following Accounts :—
Cash, Prepaid Insurance, Land, Accounts Payable, Unearned Admission Revenue, Al
Rossy Capital, Al Rossy Drawing, Admission Revenue, Advertising Expense and
Salaries Expense.
Requirements :
(i). Journalize the Transactions;
(ii). Post the transactions to the Ledger;
(iii). Prepare a Trial Balance;
Answer : 2 (i).
Mr. Al Rossy
Journal Entry
Date Account Titles and Explanation L.F. Debit (Tk.) Credit (Tk.)
April-1 Cash 50,000
Al Rossy Capital 50,000
(Cash invested as Capital)
April-4 Land 30,000
Cash 30,000
(Land purchased in Cash)
April-8 Advertising Exepenses 1,800
Accounts Payable 1,800
(Advertisement incurred on Account)
April-11 Salaries Expenses 15,000
Cash 15,000
(Salaries paid in Cash)
April-12 Event but no financial transaction  
Md. Anisur Rahman (Parvej), SO (IT), ICTD, BDBL 5
 Date Account Titles and Explanation L.F. Debit (Tk.) Credit (Tk.)
April-13 Prepaid Insurance 1,500
Cash 1,500
(Insurance Premium paid in cash for 1 year)
April-17 Al Rossy Drawing 600
Cash 600
(Withdrew cash for personal use)
April-20 Cash 5,700
Admission Revenue 5,700
(Cash received as Admission Revenue)
April-25 Cash 2,500 (100  25)
Un-earned Admission Revenue 2,500
(Cash Received from sale of 100 coupon
books)
April-30 Cash 5,900
Admission Revenue 5,900
(Cash Received from entrance fees)
April-30 Accounts Payable 700
Cash 700
(Cash paid to the advertising agency)
April-30 Insurance Expenses 125 (1,500  12)
Prepaid Insurance 125
(Insurance Premium for April)
1,13,825 1,13,825

Answer : 2 (ii). Ledger Entries

Cash Account Account No. - 01
Date Explanation Ref. Debit (Tk.) Credit (Tk.) Balance (Tk.)
April-1 Owner’s Investment 50,000 — 50,000
April-4 Land 30,000 20,000
April-11 Salaries Expenses 15,000 5,000
April-13 Prepaid Insurance 1,500 3,500
April-17 Al Rossy Drawings 600 2,900
April-20 Admission Revenue 5,700 8,600
April-25 Un-earned Admission Revenue 2,500 11,100
April-30 Admission Revenue 5,900 17,000
April-30 Accounts Payable 700 16,300

Md. Anisur Rahman (Parvej), SO (IT), ICTD, BDBL 6

 Capital Account Account No. - 02
Date Explanation Ref. Debit (Tk.) Credit (Tk.) Balance (Tk.)
April-1 Cash 50,000 50,000
Land Account Account No. - 03
Date Explanation Ref. Debit (Tk.) Credit (Tk.) Balance (Tk.)
April-4 Cash 30,000 30,000

Advertisement Expenses Account Account No. - 04

Date Explanation Ref. Debit (Tk.) Credit (Tk.) Balance (Tk.)
April-8 Accounts Payable 1,800 1,800

Accounts Payable Account Account No. - 05

Date Explanation Ref. Debit (Tk.) Credit (Tk.) Balance (Tk.)
April-8 Advertisement Expenses 1,800 1,800
April-30 Cash 700 1,100

Salaries Expenses Account Account No. - 06

Date Explanation Ref. Debit (Tk.) Credit (Tk.) Balance (Tk.)
April-11 Cash 15,000 15,000

Prepaid Insurance Account Account No. - 07

Date Explanation Ref. Debit (Tk.) Credit (Tk.) Balance (Tk.)
April-13 Cash 1,500 1,500
April-30 Insurance Expenses 125 1,375

Al Rossy’s Drawings Account Account No. - 08

Date Explanation Ref. Debit (Tk.) Credit (Tk.) Balance (Tk.)
April-17 Cash 600 600

Admission Revenue Account Account No. - 09

Date Explanation Ref. Debit (Tk.) Credit (Tk.) Balance (Tk.)
April-20 Cash 5,700 5,700
April-30 Cash 5,900 11,600
Un-earned Admission Revenue Account Account No. - 10
Date Explanation Ref. Debit (Tk.) Credit (Tk.) Balance (Tk.)
April-25 Cash 2,500 2,500

Insurance Expenses Account Account No. - 11

Date Explanation Ref. Debit (Tk.) Credit (Tk.) Balance (Tk.)
April-30 Prepaid Insurance 125 125

Md. Anisur Rahman (Parvej), SO (IT), ICTD, BDBL 7

 Answer : 2 (iii). Trial Balance

Mr. Al Rossy
Trial Balance
As on April-30

Account No. Account Titles Ref.Debit (Tk.) Credit (Tk.)

# 01 Cash 16,300
# 03 Land 30,000
# 04 Advertisement Expenses 1,800
# 06 Salaries Expenses 15,000
# 07 Prepaid Insurance 1,375
# 08 Al Rossy’s Drawings 600
# 11 Insurance Expenses 125
# 02 Al Rossy’s Capital 50,000
# 05 Accounts Payable 1,100
# 09 Admission Revenue 11,600
# 10 Un-earned Admission Revenue 2,500
Total 65,200 65,200


Question # 3 [May-2012]

 Jane Kent is a licensed CA. During the first month of operation of her business the
following events and transactions occured :—
May 1 Kent invested Tk. 2,50,000 in cash.
May 2 Hired a secretary-receptionist at a salary of Tk. 20,000 per month.
May 3 Purchased Tk. 25,000 of supplies on account from Red Supply
Company.
May 7 Paid office rent of Tk. 9,000 cash for the month.
May 8 Completed a tax assignment and billed customer Tk. 21,000 for services
provided.
May 12 Received Tk. 3,500 advance on a management consulting engagement.
May 17 Received cash of Tk. 10,000 for services completed for F. Arnold Co.
May 31 Pad secretary receptionist Tk. 20,000 salary for the month.
May 31 Paid 40% of balance due to Red Supply Co.
Requirements :
(i). Journalize the transactions;
(ii). Post the transactions to the Ledgers;
(iii). Prepare a Trial Balance of May 31, 2011;

Md. Anisur Rahman (Parvej), SO (IT), ICTD, BDBL 8

 Answer : 3 (i). Journal Account
Ms. Jane Kent
Journal Entry
Date Account Titles and Explanation L.F. Debit (Tk.) Credit (Tk.)
2011
May 1 Cash 2,50,000
Kent Capital 2,50,000
(Cash invested as Capital)
May 2 Event but no financial transaction  
May 3 Supplies 25,000
Accounts Payable-Red Supply Company 25,000
(Purchased supplies on accounts from Red Supply
Company
May 7 Rent Expenses 9,000
Cash 9,000
(Monthly Office Rent paid in Cash)
May 8 Accounts Receivable 21,000
Service Revenue 21,000
(Billed client for Service rendered)
May 12 Cash 3,500
Un-earned Revenue 3,500
(received cash in advance for future service)
May 17 Cash 10,000
Service Revenue 10,000
(Received cash for service completed)
May 31 Salary Expenses 20,000
Cash 20,000
(Salary of secretary paid in cash)
May 31 Accounts Payable-Red Supply Company 10,000 (25,000  40%)
Cash 10,000
(Paid 40% of Red Supply Co.)
3,48,500 3,48,500

Md. Anisur Rahman (Parvej), SO (IT), ICTD, BDBL 9

 Answer : 3 (ii). Ledger Entries
Cash Account Account No. - 01
Date Particulars Ref. Debit (Tk.) Credit (Tk.) Balance (Tk.)
May 1 Owner’s Investment 2,50,000 — 2,50,000
May 7 Rent Expenses 9,000 2,41,000
May 12 Un-earned Revenue 3,500 2,44,500
May 17 Service Revenue 10,000 2,54,500
May 31 Salary Expenses 20,000 2,34,500
May 31 Accounts Payable 10,000 2,24,500
Jane Kent Capital Account No. - 02
Date Particulars Ref. Debit (Tk.) Credit (Tk.) Balance (Tk.)
May 1 Cash 2,50,000 2,50,000
Supplies Account No. - 03
Date Particulars Ref. Debit (Tk.) Credit (Tk.) Balance (Tk.)
May 3 Accounts Payable 25,000 25,000
Accounts Payable Account No. - 04
Date Particulars Ref. Debit (Tk.) Credit (Tk.) Balance (Tk.)
May 3 Supplies 25,000 25,000
May 31 Cash 10,000 15,000
Rent Expenses Account No. - 05
Date Particulars Ref. Debit (Tk.) Credit (Tk.) Balance (Tk.)
May 7 Cash 9,000 9,000
Accounts Receivable Account No. - 06
Date Particulars Ref. Debit (Tk.) Credit (Tk.) Balance (Tk.)
May-8 Service Revenue 21,000 21,000
Service Revenue Account No. - 07
Date Particulars Ref. Debit (Tk.) Credit (Tk.) Balance (Tk.)
May-8 Accounts Receivable 21,000 21,000
May-17 Cash 10,000 31,000
Un-earned Revenue Account No. - 08
Date Particulars Ref. Debit (Tk.) Credit (Tk.) Balance (Tk.)
May-12 Cash 3,500 3,500
Salary Expenses Account No. - 09
Date Particulars Ref. Debit (Tk.) Credit (Tk.) Balance (Tk.)
May-31 Cash 20,000 20,000

Md. Anisur Rahman (Parvej), SO (IT), ICTD, BDBL 10

 Answer : 3 (iii). Trial Balance
Ms. Jane Kent
Trial Balance
May 31, 2011
Account No. Account Titles Ref. Debit (Tk.) Credit (Tk.)
# 01 Cash 2,24,500
# 03 Supplies 25,000
# 05 Rent Expenses 9,000
# 06 Accounts Receivable 21,000
# 09 Salary Expenses 20,000
# 02 Jane Kent Capital 2,50,000
# 04 Accounts Payable 15,000
# 07 Service Revenue 31,000
# 08 Un-earned Revenue 3,500
Total 2,99,500 2,99,500

Question # 4 [November-2011]
 Nandan Park was started on April-1 by M. Kamal. The following selected events and
transactions occured during April :—
April 1 Kamal invested Tk. 2,00,000 cash.
April 4 Purchased land costing Tk. 50,000 for cash.
April 8 Incurred advertising expenses of Tk. 2,000 on account.
April 11 Paid salaries to employees Tk. 15,000.
April 12 Hired a park manager at a salary of Tk. 40,000 p.m. effective May 1.
April 13 Paid Tk. 36,000 cash for a one year insurance policy.
April 17 Withdrew Tk. 10,000 cash for personal use.
April 20 Received Tk. 6,000 for admission fees.
April 25 Sold 100 coupon books for Tk. 250 each. Each book contains 10 coupons
that allow the holder to one admission to the park.
April 30 Received Tk. 8,900 in cash admission fees.
April 30 Paid Tk. 900 to the advertising agency incurred on April 8.
April 30 Paid Insurance Premium for April.
M. Kamal uses the following Accounts :—
Cash, Prepaid Insurance, Land, Accounts Payable, Unearned Admission Revenue,
M.Kamal Capital, M.Kamal Drawing, Admission Revenue, Advertising Expenses and
Salaries Expense.
Requirements :
(i). Journalize the April Transactions;
(ii). Post to the Ledger; (iii). Prepare a Trial Balance;
Md. Anisur Rahman (Parvej), SO (IT), ICTD, BDBL 11
 Answer : 4 (i). Mr. M. Kamal
Journal Entry
Date Account Titles and Explanation L.F. Debit (Tk.) Credit (Tk.)
Cash
April-1 2,00,000
M. Kamal Capital 2,00,000
(Cash invested as Capital)
April-4 Land 50,000
Cash 50,000
(Land purchased for Cash)
April-8 Advertising Exepenses 2,000
Accounts Payable 2,000
(Advertisement incurred on Account)
April-11 Salaries Expenses 15,000
Cash 15,000
(Salaries paid in Cash)
April-12 Event but no financial transaction  
April-13 Prepaid Insurance 36,000
Cash 36,000
(Insurance Premium paid in cash for 1 year)
April-17 M. Kamal Drawings 10,000
Cash 10,000
(Withdrew cash for personal use)
April-20 Cash 6,000
Admission Revenue 6,000
(Cash received as Admission Revenue)
April-25 Cash 25,000 (1 0 0 × 2 5 0 )
Un-earned Admission Revenue 25,000
(Cash Received from sale of 100 coupon books)
April-30 Cash 8,900
Admission Revenue 8,900
(Cash Received from entrance fees)
April-30 Accounts Payable 900
Cash 900
(Cash paid to the advertising agency)
April-30 Insurance Expenses 3,000 (36,000÷12)
Prepaid Insurance 3,000
(Insurance Premium for April)
3,56,800 3,56,800
Md. Anisur Rahman (Parvej), SO (IT), ICTD, BDBL 12
 Answer : 4 (ii). Ledger Entries
Cash Account Account No. - 01
Date Explanation Ref. Debit (Tk.) Credit (Tk.) Balance (Tk.)
April-1 Owner’s Investment 2,00,000 — 2,00,000
April-4 Land 50,000 150,000
April-11 Salaries Expenses 15,000 135,000
April-13 Prepaid Insurance 36,000 99,000
April-17 M. Kamal Drawings 10,000 89,000
April-20 Admission Revenue 6,000 95,000
Un-earned Admission
April-25 Revenue 25,000 1,20,000
April-30 Admission Revenue 8,900 1,28,900
April-30 Accounts Payable 900 1,28,000
Capital Account Account No. - 02
Date Explanation Ref. Debit (Tk.) Credit (Tk.)Balance (Tk.)
April-1 Cash 2,00,000 2,00,000
Land Account Account No. - 03
Date Explanation Ref. Debit (Tk.) Credit (Tk.) Balance (Tk.)
April-4 Cash 50,000 50,000
Advertisement Expenses Account Account No. - 04
Date Explanation Ref. Debit (Tk.) Credit (Tk.) Balance (Tk.)
April-8 Accounts Payable 2,000 2,000
Accounts Payable Account Account No. - 05
Date Explanation Ref. Debit (Tk.) Credit (Tk.) Balance (Tk.)
April-8 Advertisement Expenses 2,000 2,000
April-30 Cash 900 1,100
Salaries Expenses Account Account No. - 06
Date Explanation Ref. Debit (Tk.) Credit (Tk.) Balance (Tk.)
April-11 Cash 15,000 15,000
Prepaid Insurance Account Account No. - 07
Date Explanation Ref. Debit (Tk.) Credit (Tk.) Balance (Tk.)
April-13 Cash 36,000 36,000
April-30 Insurance Expenses 3,000 33,000
M. Kamal’s Drawings Account Account No. - 08
Date Explanation Ref. Debit (Tk.) Credit (Tk.) Balance (Tk.)
April-17 Cash 10,000 10,000

Md. Anisur Rahman (Parvej), SO (IT), ICTD, BDBL 13

 Admission Revenue Account Account No. - 09
Date Explanation Ref. Debit (Tk.) Credit (Tk.) Balance (Tk.)
April-20 Cash 6,000 6,000
April-30 Cash 8,900 14,900
Un-earned Admission Revenue Account Account No. - 10
Date Explanation Ref. Debit (Tk.) Credit (Tk.) Balance (Tk.)
April-25 Cash 25,000 25,000
Insurance Expenses Account Account No. - 11
Date Explanation Ref. Debit (Tk.) Credit (Tk.) Balance (Tk.)
April-30 Prepaid Insurance 3,000 3,000

Answer : 4 (iii). Trial Balance

Mr. M. Kamal
Trial Balance
As on April-30

Account No. Account Titles Ref.Debit (Tk.) Credit (Tk.)

# 01 Cash 1,28,000
# 03 Land 50,000
# 04 Advertisement Expenses 2,000
# 06 Salaries Expenses 15,000
# 07 Prepaid Insurance 33,000
# 08 M. Kamal’s Drawings 10,000
# 11 Insurance Expenses 3,000
# 02 M. Kamal’s Capital 2,00,000
# 05 Accounts Payable 1,100
# 09 Admission Revenue 14,900
# 10 Un-earned Admission Revenue 25,000
Total 2,41,000 2,41,000

Question # 5 [November-2010]

 The following selected events and transactions occured during January-2014 :—

January 1 Mr. Ruhul started business with furniture of Tk. 50,000 and a bank loan
of Tk. 50,000.
January 3 Paid Tk. 12,000 for one year insurance policy which includes Tk. 2,000
for his wife’s insurance policy.
January 5 Purchase goods for Tk. 50,000 of which Tk. 20,000 paid in cheque.
January 9 Goods sold for Tk. 1,20,000 of which Tk. 50,000 in cash, Tk. 20,000 in
Bills and Tk. 50,000 in cheque.
Md. Anisur Rahman (Parvej), SO (IT), ICTD, BDBL 14
 January 12 Rent accrued Tk. 5,000.
January 18 Commission Receive Tk. 2,000.
January 20 Money received in advance to provide goods for Tk. 5,000.
January 25 Bank loan is paid with an ineterest of 10% (Annual Rate)
January 31 Paid Insurance Premium for January, 2014.
Requirements :
(i). Journalize the January Transactions;
(ii). Prepare a Trial Balance;

Answer : 5 (i). Mr. Ruhul

Journal Entries
Date Account Titles and Explanation L.F. Debit (Tk.) Credit (Tk.)
2014
January-1 Cash 50,000
Furniture 50,000
Mr. Ruhul Capital 50,000
10% Bank Loan 50,000
(Owner’s investment of Furniture in
Business and taking Loan from Bank)
January-3 Mr. Ruhul, Drawings 2,000
Prepaid Insurance 10,000
Cash 12,000
(Paid one year insurance policy of Business
and wife’s insurance policy debited to Mr.
Ruhul Drawings)
January-5 Purchases 50,000
Cash 20,000
Accounts Payable 30,000
(For purchase goods on credit and in cash)
January-9 Cash 50,000
Accounts Receivable 50,000
Notes Receivables 20,000
Sales 1,20,000
(For Cash and Credit Sales)
January-12 Rent Expenses 5,000
Rent Payable 5,000
(For Recording of Rent Expenses)
January-18 Cash 2,000
Commission Income 2,000
(For Commission Income Recording)
Md. Anisur Rahman (Parvej), SO (IT), ICTD, BDBL 15
 Date Account Titles and Explanation L.F. Debit (Tk.) Credit (Tk.)
January-20 Cash 5,000
Advanced against Sales 5,000
(For recording Advance Sales)
January-25 10% Bank Loan 50,000
Interest Expenses 5,000 (50,000  10%)
Cash 55,000
(10% Bank Loan paid with Interest)
January-31 Insurance Expenses 833 (1 0 ,0 0 0 ÷ 1 2 )

Prepaid Insurance 833

(Insurance Premium for January-2104)
3,49,833 3,49,833
Answer : 5 (ii). Mr. Ruhul
Cash Ledger
Date Explanation Ref. Debit (Tk.) Credit (Tk.) Balance (Tk.)
2014
January-1 10% Bank Loan 50,000 — 50,000
January-3 Mr. Ruhul, Drawings 2,000 48,000
January-3 Prepaid Insurance 10,000 38,000
January-5 Purchases 20,000 18,000
January-9 Sales 50,000 68,000
January-18 Commission Income 2,000 70,000
January-20 Advanced against Sales 5,000 75,000
January-25 10% Bank Loan 50,000 25,000
January-25 Interest Expenses 5,000 20,000

Mr. Ruhul
Trial Balance
As on January 31, 2014
Account No. Account Titles Ref. Debit (Tk.) Credit (Tk.)
Cash 20,000
Furniture 50,000
Mr. Ruhul, Drawings 2,000
Prepaid Insurance 9,167 (1 0 ,0 0 0 - 8 3 3 )

Purchases 50,000
Accounts Receivable 50,000
Notes Receivables 20,000
Rent Expenses 5,000
Md. Anisur Rahman (Parvej), SO (IT), ICTD, BDBL 16
 Account No. Account Titles Ref. Debit (Tk.) Credit (Tk.)
Insurance Expenses 833
Mr. Ruhul Capital 50,000
Accounts Payable 30,000
Sales 120,000
Rent Payable 5,000
Commission Income 2,000
Total 2,07,000 2,07,000


Question # 6
 The following transactions are obtained from the books of Mr. Prime for the month of
April, 2011 :—s
April 1 Prime invested cash Tk. 2,00,000 and furniture Tk. 50,000 into the
business.
April 5 Purchased office supplies for cash Tk. 30,000 and on account Tk. 20,000.
April 15 Received cash Tk. 1,00,000 for services rendered.
April 22 Paid office rent Tk. 20,000 for the month of April.
April 24 Insurance paid in advance Tk. 5,000.
April 27 Paid salaries Tk. 25,000 for the month.
April 30 Mr. Prime withdrew Tk. 10,000 for personal use.
Requirements :
(i). Prepare Journal Entries;
(ii). Open necessary Ledger Accounts;
(iii). Prepare a Trial Balance at 30 April, 2011;

Answer : 6 (i). In the books of Mr. Prime

Journal Entries
Date Account Titles and Explanation L.F Debit (Tk.) Credit (Tk.)

April-1 Cash 2,00,000

Furniture 50,000
Prime-Capital 2,50,000
(Owner's investment of Cash and Furniture
in business)
April-5 Office Supplies 50,000
Cash 30,000
Accounts Payable 20,000
(Purchased supplies for cash and credit)
Md. Anisur Rahman (Parvej), SO (IT), ICTD, BDBL 17
 Credit
Date Account Titles and Explanation L.F Debit (Tk.) (Tk.)
April-15 Cash 1,00,000
Service Revenue 1,00,000
(Received cash for service provided)
April-22 Rent Expense 20,000
Cash 20,000
(Paid office rent for the month of April by
cash)
April-24 Prepaid Insurance 5,000
Cash 5,000
(Paid advance for insurance)
April-27 Salaries Expense 25,000
Cash 25,000
(Paid salaries for the month of April in
cash)
April-30 Prime-Drawings 10,000
Cash 10,000
(Withdrew cah for personal use)
4,60,000 4,60,000

Ans : 6 (ii). In the books of Mr. Prime

Ledger Accounts

Cash
Date Explanation Ref. Debit (Tk.) Credit (Tk.) Balance (Tk.)
April-1 Prime-Capital 2,00,000 — 2,00,000
April-5 Office Supplies 30,000 1,70,000
April-15 Service Revenue 1,00,000 2,70,000
April-22 Rent Expense 20,000 2,50,000
April-24 Prepaid Insurance 5,000 2,45,000
April-27 Salaries Expense 25,000 2,20,000
April-31 Prime-Drawings 10,000 2,10,000

Furniture
Date Explanation Ref. Debit (Tk.) Credit (Tk.) Balance (Tk.)
April-1 Cash 50,000 50,000

Md. Anisur Rahman (Parvej), SO (IT), ICTD, BDBL 18

 Prime-Capital
Date Explanation Ref. Debit (Tk.) Credit (Tk.) Balance (Tk.)
April-1 Cash 2,00,000 2,00,000
April-1 Furniture 50,000 2,50,000

Office Supplies
Date Explanation Ref. Debit (Tk.) Credit (Tk.) Balance (Tk.)
April-5 Cash 30,000 30,000
April-5 Accounts Payable 20,000 50,000

Accounts Payable
Date Explanation Ref. Debit (Tk.) Credit (Tk.) Balance (Tk.)
April-8 Office Supplies 20,000 20,000

Service Revenue
Date Explanation Ref. Debit (Tk.) Credit (Tk.) Balance (Tk.)
April-15 Cash 100,000 100,000

Rent Expense
Date Explanation Ref. Debit (Tk.) Credit (Tk.) Balance (Tk.)
April-22 Cash 20,000 20,000

Prepaid Insurance
Date Explanation Ref. Debit (Tk.) Credit (Tk.) Balance (Tk.)
April-24 Cash 5,000 5,000

Salaries Expense
Date Explanation Ref. Debit (Tk.) Credit (Tk.) Balance (Tk.)
April-27 Cash 25,000 25,000

Prime-Drawings
Date Explanation Ref. Debit (Tk.) Credit (Tk.) Balance (Tk.)
April-30 Cash 10,000 10,000

Md. Anisur Rahman (Parvej), SO (IT), ICTD, BDBL 19

 Answer : 6 (iii). Trial Balance
In the books of Mr. Prime
Trial Balance
As on April-30, 2011
Account No. Account Titles Ref. Debit (Tk.) Credit (Tk.)
Cash 2,10,000
Furniture 50,000
Office Supplies 50,000
Rent Expense 20,000
Prepaid Insurance 5,000
Salaries Expense 25,000
Prime-Drawings 10,000
Prime-Capital 2,50,000
Accounts Payable 20,000
Service Revenue 1,00,000
Total 3,70,000 3,70,000

Question # 7
 From the following transactions prepare Journal, Ledger and Trial Balance :—
(i). Mr. Rahman started business with a capital of tk. 1,00,000.
(ii). Paid Tk. 12,000 for one year insurance policy.
(iii). Purchased goods for Tk. 50,000 of which Tk. 20,000 paid in cash.
(iv). Goods sold for Tk. 1,20,000 of which Tk. 70,000 in cash.
(v). Paid rent Tk. 10,000.
(vi). Received commission Tk. 5,000.
(vii). Paid salary Tk. 8,000.
(viii). Withdraw Tk. 5,000 for personal use.
(ix). Took loan from a bank Tk. 50,000 with an interest rate of 10%
(x). Goods sold on credit Tk. 20,000.
Answer : 8 Mr. Rahman
Journal Entries
Date Account Titles and Explanation L.F. Debit (Tk.) Credit (Tk.)
(i) Cash 1,00,000
Mr. Rahman-Capital 1,00,000
(Mr. Rahman started business with a capital
of Tk. 1,00,000)

Md. Anisur Rahman (Parvej), SO (IT), ICTD, BDBL 20

 Date Account Titles and Explanation L.F. Debit (Tk.) Credit (Tk.)
(ii). Prepaid Insurance 12,000
Cash 12,000
(Paid advance for insurance)

(iii). Purchase 50,000

Cash 20,000
Accounts Payable 30,000
(Goods purchased in Cash and Credit)

(iv). Cash 70,000

Accounts Receivable 50,000
Sales 1,20,000
(Goods sold in Cash and Credit)
(v). Rent Expenses 10,000
Cash 10,000
(Paid rent by Cash)
(vi). Cash 5,000
Commission 5,000
(Commission received in Cash)
(vii). Salary Expenses 8,000
Cash 8,000
(Salary paid by cash)
(viii). Mr. Rahman Drawings 5,000
Cash 5,000
(Cash withdrawn by owner)
(ix). Cash 50,000
10% Bank Loan 50,000
(Loan received from Bank)
(x). Accounts Receivable 20,000
Sales 20,000
(Goods sold on Credit)
3,80,000 3,80,000

Md. Anisur Rahman (Parvej), SO (IT), ICTD, BDBL 21

 Answer : 8 Mr. Rahman
Ledger Accounts
Cash Account
Date Explanation Ref. Debit (Tk.) Credit (Tk.) Balance (Tk.)
(i). Mr. Rahman-Capital 1,00,000 — 1,00,000
(ii). Prepaid Insurance 12,000 88,000
(iii). Purchase 20,000 68,000
(iv). Sales 70,000 1,38,000
(v). Rent Expenses 10,000 1,28,000
(vi). Commission 5,000 1,33,000
(vii). Salary Expenses 8,000 1,25,000
(viii). Mr. Rahman Drawings 5,000 1,20,000
(ix). 10% Bank Loan 50,000 1,70,000
Mr. Rahman-Capital
Date Explanation Ref. Debit (Tk.) Credit (Tk.) Balance (Tk.)
(i). Cash 1,00,000 1,00,000

Prepaid Insurance
Date Explanation Ref. Debit (Tk.) Credit (Tk.) Balance (Tk.)
(ii). Cash 12,000 12,000

Purchase
Date Explanation Ref. Debit (Tk.) Credit (Tk.) Balance (Tk.)
(iii). Cash 30,000 30,000
(iii). Accounts Payable 20,000 50,000
Accounts Payable
Date Explanation Ref. Debit (Tk.) Credit (Tk.) Balance (Tk.)
(iii). Purchase 30,000 30,000
Accounts Receivable
Date Explanation Ref. Debit (Tk.) Credit (Tk.) Balance (Tk.)
(iv). Sales 50,000 50,000
(x). Sales 20,000 70,000
Sales Account
Date Explanation Ref. Debit (Tk.) Credit (Tk.) Balance (Tk.)
(iv). Cash 70,000 70,000
(iv). Accounts Receivable 50,000 1,20,000
(x). Accounts Receivable 20,000 1,40,000
Md. Anisur Rahman (Parvej), SO (IT), ICTD, BDBL 22
 Rent Expenses
Date Explanation Ref. Debit (Tk.) Credit (Tk.) Balance (Tk.)
(v). Cash 10,000 10,000

Commission Account
Date Explanation Ref. Debit (Tk.) Credit (Tk.) Balance (Tk.)
(vi). Cash 5,000 5,000

Salary Expenses
Date Explanation Ref. Debit (Tk.) Credit (Tk.) Balance (Tk.)
(vii). Cash 8,000 8,000

Mr. Rahman Drawings

Date Explanation Ref. Debit (Tk.) Credit (Tk.) Balance (Tk.)
(viii). Cash 5,000 5,000

10% Bank Loan

Date Explanation Ref. Debit (Tk.) Credit (Tk.) Balance (Tk.)
(ix). Cash 50,000 50,000
Answer : 8 Mr. Rahman
Trial Balance
As at ……..
Account No. Account Titles Ref. Debit (Tk.) Credit (Tk.)
Cash 1,70,000
Mr. Rahman-Capital 1,00,000
Prepaid Insurance 12,000
Purchase 50,000
Accounts Payable 30,000
Accounts Receivable 70,000
Sales Account 1,40,000
Rent Expenses 10,000
Commission Account 5,000
Salary Expenses 8,000
Mr. Rahman Drawings 5,000
10% Bank Loan 50,000
Total 3,25,000 3,25,000

Md. Anisur Rahman (Parvej), SO (IT), ICTD, BDBL 23