Journal

1) Classify the following accounts into personal, real & nominal. 1) Cash A/c 2) Wages A/c 3) Building A/c 4) Calcutta Tramways Co A/c 5) East Bengal Club A/c 6) Rent A/c 7) Capital A/c 8) Drawing A/c 9) Interest A/c 10) Trade Mark A/c 11) Dividend A/c 12) Land A/c 13) Goodwill A/c 14) Patent A/c 15) Bad Debt A/c 16) Bank A/c 17) Discount Allowed A/c 18) Interest Received A/c 19) Discount Received A/c 2)Ascertain which account will be debited & credited from the following transactions. 1) Bought goods for cash. 2) Bought goods from A & Co. on credit. 3) Returned goods to A & Co. 4) Sold goods for cash. 5) Sold goods to B & Co. on credit. 6) B & Co. returned goods to us.

3)Enter the following transactions in the Journal of Bhagwat and sons.. 2006 Amount (Rs) January 1 Tarun started business with cash 1,00,000 January 2 Goods purchased for cash 20,000 January 4 Machinery Purchased from Vibhu 30,000 January 6 Rent paid in cash 10,000 January 8 Goods purchased on credit from Anil 25,000 January 10 Goods sold for cash 40,000 January 15 Goods sold on credit to Gurmeet 30,000 January 18 Salaries paid. 12,000 January 20 Cash withdrawn for personal use 5,000 4)Journalize the following transactions. 1) Started business with a capital of Rs.7500. 2) Opened a bank account with SBI for Rs.2000. 3) Paid commission to X for Rs.300. 4) Purchased goods from K & Co. for cash Rs.1000. 5) Purchased goods from Mr. Z for Rs.2000. 6) Goods returned to Mr. Z for Rs.500. 7) Paid to Mr. Z in full settlement of rs.1400. 8) Received interest on investment for Rs.400. 9) Paid rent to landlord Mr. Y for Rs.500. 10) Withdrew cash for household expenses amounted to Rs.600. 11) Sold goods to Mr. L for cash Rs.2500. 12) Sold goods to Mr. D on credit for Rs.1000. 13) Goods returned by Mr. D for Rs.250. 14) Received cash from Mr. D in full settlement for Rs.700. 15) Paid carriage on goods purchased for Rs.350. 16) Paid carriage on goods sold for Rs.800. 17) Purchased furniture for office decoration for cash amounted to rs.1000. 18) Purchased furniture for resale for Rs.1000. 19) Sold furniture out of those meant fro resale Rs.1500. 20) Paid rent out of personal cash for Rs.400.

Establishment charges Travelling Expenses Bank Charges Sales Tax/Value added Tax Depreciation on fixed assets Net Profit transferred to Capital Account

XXX XXX XXX XXX XXX XXX XXXXXXXX XXXXXXX X

Specimen of the Balance Sheet

Balance Sheet of M/s ............ As per Schedule VI of the Companies Act 1956 As on ................. Liabilities Amount Assets Amount (Rs) (Rs) Capital XXX Goodwill XXX Add : Net profit XXX Land & Building XXX Less : Drawings XXX Plant & Machinery XXX Loans XXX Furniture XXX Sundry creditors XXX Investments XXX Bills payable XXX Closing stock XXX Outstanding expenses XXX Sundry Debtors XXX Bank overdraft XXX Bills Receivables XXX Investments (short XXX term) Prepaid expenses XXX Cash at bank XXX Cash in hand XXX XXXXXX XXXXXX Illustration 1 From the following Trial Balance of M/s Vikram Brothers prepare Trading and Profit and Loss Account for the year ended 31st March 2006 and Balance Sheet as on that date. Dr. Cr. Particulars Balances Particulars Balance Rs Rs Cash in hand 500 Capital 70000 Motor car 25000 Discount Received 2000 Drawings 48000 Sales 230000

Legal charges 46000 Plant & Machinery 5200 Investments 3800 Opening stock 34000 Sales Returns Salaries Discount allowed Carriage Inward Wages Postage Debtors Interest Insurance Premium Purchases

1500 60000 40000 35000

Creditors Interest on investment Purchases Return Bills payable

2500 12000 600 1800 21000 400 60000 1500 1200 80000 391000 Closing stock as on 31.3.2006 Rs 28000

391000

Illustration 2 Following is the Trial Balance extracted from the books of Jasmine Enterprises as on 31st March, 2006. Prepare Trading and Profit & Loss A/c from the information given in Trial Balance for the year ending 31st March, 2006. Also prepare the Balance Sheet as on that date. Dr. Cr. Particulars Balances Balance Stock (1.4.2005) 18500

Purchases & Sales Return Inwards & Return Outwards Debtors & Creditors Bills Receivable & Bills Payable Commission paid Audit fees Building Furniture Salaries Telephone charges Insurance Discount allowed Octroi Wages Freight Inward Bad debts Depreciation Bank loan Cash in hand and at Bank Capital Drawing Machinery Stock as on 31.3.2006 Rs 19600

78500 2200 16500 14000 2000 1800 65000 12000 14000 4200 2100 1000 1200 16000 2400 600 4200

154200 2500 18000 21000

32000 25000 100000 16500 30000 327700 327700

Illustration 3 From the following trail balance of K. Kundu as on 31.3.1993, prepare Trading A/c, Profit & Loss A/c for the year ended 31.3.1993 and a Balance Sheet as on that date. Particulars Amount Particulars Amount K. Kundus Drawing 12000 K. Kundus Capital 60000 Furniture & Fixtures 4000 Return Outward 2000 Plant & Machinery 30000 Sales 130000 Opening Stock 20000 Creditors 12000 Purchases 80000 Loan @6%p.a. taken from 10000

Salaries & Wages Debtors Return Inward Postage & Telegram Rent, Rates & Taxes Bad Debt written off Trade Expenses Interest on loan from M.Mehta Insurance Travelling Expenses Sundry Expenses Cash in Hand Cash at Bank

22400 20400 5000 1500 3600 400 200 150 800 500 300 3050 10300 214600

M.Mehta on 1.10.1992 Discount

600

214600 Adjustments :1) Closing stock : cost price Rs.21000, Market price Rs.25000. 2) Of the debtors Rs.400 are bad & should be written off. Create a reserve for bad debts at 5% on Sundry Debtors & a reserve for discount on Debtors at 2.5%. 3) Salaries Rs.800 for March 1993 were not paid. 4) Interest on capital is to be calculated at 6% p.a. and on drawings Rs.330. 5) Prepaid Insurance amounted to Rs.100. 6) Depreciate Furniture & Fixture by 5% and Plant & Machinery by 10%. 7) Make a reserve for discount on creditors @2%.

Illustration 4 From the following balances taken from the ledger of Srikrishna on 31.3.2009, prepare Trading A/c, Profit & Loss A/c for the year ended 31.3.2009 and a Balance Sheet as at 31.3.2009. Particulars Amount Sundry Creditors 19000 Building 15000 Income Tax 1025 Loose Tools 1000

Cash at Bank 16200 Sundry Expenses 1990 Bank Interest (Cr.) 75 Purchases 157000 Wages 10000 Carriage Inward 1120 Sales 185000 Motor Van 12500 Cash in Hand 335 Bad debt 100 Loan from Ram 2500 Sundry Debtors 9500 Investments 6500 Bad Debt Reserve 1600 Rent & Rates 850 Furniture 3000 Stock (1.4.2008) 27350 Capital 47390 Discount Allowed 630 Discount Received 535 Drawings 2000 Bills Payable 10000 Adjustments:1) Write off further Rs.300 as bad out of sundry debtors and create a reserve for bad debt @20% on debtors. 2) Dividends accrued and due on Investment is Rs.135. 3) Rent paid in advance Rs.100. 4) Wages owing Rs.450. 5) On 31.3.2009 stock was valued at Rs.15000 and loose tools were valued at Rs.800. 6) Write off 5% for depreciation on building and 40% on motor van. 7) Provide for interest @12%p.a. due on loan taken on 1.6.2008. 8) Income tax paid has to be treated as drawings.

Illustration 5 From the following Trial Balance of M.B. Garments as on 31st December, 2006, prepare Trading A/c and Profit & Loss A/c for the year ended 31st December, 2006 and Balance Sheet as on that date : Name of the Account Dr amount Cr amount Rs Rs Capital 80000 Cash in hand 570 Cash at bank 5600

Purchases Sales Wages Power Carriage inward Carriage outward Stock (1.1.2006) Land & Building Machinery Salaries Insurance Sundry Debtors Sundry Creditors

43200 78000 10400 4730 2040 3200 5660 40000 20000 4000 600 28000 10000 168000

168000 Following adjustments are to be accounted for: (i) Stock on 31.12.2006 Rs. 10000. (ii) Machinery to be depreciated @10% p.a. and Building to be depreciated @ 2% p.a. (iii) Salaries for the month of December outstanding were Rs. 1200. (iv) Insurance Premium was paid for one year ending 30th June, 2007.

Illustration 6 From the following Trial Balance of Mustafa & Co., prepare Trading and Profit and loss A/c for the year ending on 31st Dec. 2006 and Balance Sheet as on that date after making necessary journal entries for adjustments. Dr. Balance Cr. Balance (Rs.) (Rs.) Land and Building 60000 Capital 150000 Plant and Machinery 40000 Sundry Creditors 30000 Bill Receivables 8000 Sales 120000 Stock on 1.1.2006 40000 Reserve for Bad 4500 Purchases 51000 and Doubtful Debts

Wages 20000 Loan (12% p.a.) 10000 Coal, Gas & Coke 5800 Commission Received 2000 Salaries 5000 Rent 2800 Cash at bank 25000 Sundry Debtors 45000 Repairs 1800 Bad Debts 5500 Sales Returns 2000 Furniture and Fixture 4000 Interest on Loan 600 3,16,500 3,16,500 Adjustments 1. Closing stock valued at Rs. 30000. 2. Depreciate Plant & Machinery @ 5% and Furniture & Fixture @ 10%. 3. Provide for Bad and Doubtful Debts @ 5%. 4. Outstanding Wages Rs. 1000, Rent Rs. 500 and interest on loan outstanding Rs 600. 5. Commission accrued Rs. 1000.