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1. Showing the accounting equation on the basis of the following transactions.

1. Abu started business with Rs 30,000

2. Purchased good for cash Rs 7000
3. Purchased goods on credit Rs 6000
4. Cash paid to creditor Rs 5000
5. Paid Rent Rs 800

2. Give Journal entries for the following transactions.

2004 January 21 Purchased furniture for cash 3000

22 Purchased goods for cash 4200

23 Sold machinery for cash 6000

25 Sold goods for cash 4500

27 Paid Salary 600

28 Received commission 400

29 Paid to Kumar 500

31 Received cash from Somu 1000

 Journal

Date Particulars LF Dr. Rs. Cr. Rs.

2004 Furniture A/c 3000

Dr
Jan. 21 3000
To Cash A/c

(Bought furniture for cash)

4200
Purchase A/c Dr
22 4200
To Cash A/c

(Bought goods)
6000
Cash A/c Dr
23 6000
To Machinery A/c

(Sold Machinery for cash)

25 4500
Cash A/c Dr
4500
To Sales A/c

(Sold goods for cash)

27 600
Salary A/c Dr
600
To Cash A/c

(Paid salary)
28 400
Cash A/c Dr
400
To Commission A/c

(Received Commission)
29 500
Kumar A/c Dr
500
To Cash A/c

(Paid cash)
31 1000
Cash A/c Dr 1000
To Somu A/c
 Transactions Assets = Liability

Cash + Stock = Crediters + Capital

1.Startd business with 30,000 30,000 + 0 = 0 + 30,000

2.Purchased goods for 7000 -7000 + 7000 = 0 + 0

New equation 23000 + 7000 = 0 + 30000

3.Purchased on credit 6000 0 + 6000 = 6000 + 0

New equation 23000 + 13000 = 6000 + 30,000

4. Cash paid to creditors 5000 -5000 + 0 = -5000 + 0

New equation 18000 + 13000 = 1000 + 30,000

5.Paid rent Rs.800 -800 + 0 = 0 + -800

17200 + 13000 = 1000 + 29200

3. Enter the following transactions in the Ledger of Hariprasad of

Hydrabad
2000
Jul-01 Commenced business with cash 180,000
3 Deposited into Bank 55,000
4 Purchases goods for cash 22,000
5 Bought goods for Swaminadhan 72,000
8 Cash sales 16,200
11 Cash deposited into Bank 23,000
14 Purchased furniture for cash 4,000
16 Sold goods to Vivek 12,700
17 Received cash from Vivek 12,446
Allowed him discount 254
18 Paid Swaminadhan cash 12,000
Discount allowed by him 240
20 Paid wages 1,800
21 Sold goods to Jagadeesan 35,000
22 Paid cash for trade expenses 150
24 Sold goods to Rajan 23,280
25 Received from Jagadeesan 21,000
Allowed his discount 525
 26 Paid Swaminadhan cash on account 24,000
28 Sold goods for cash 9,000
29 Paid cash for stationery 180
30 Paid cash for miscellaneous expenses 150
31 Brought goods from Sridhar 17,870
31 Withdraw cash for private expenses 1,480

Ledger
Cash A/c
Date Particulars Amount Date Particulars Amount
1.7.2000 To capital A/c 180,000 3.7.2000 By Bank A/c 55,000
6.7.2000 To sales A/c 16,200 4.7.2000 By Purchases A/c 22,000
17.7.2000 To Vivek A/c 12,446 11.7.2000 By Bank A/c 23,000
25.7.2000 To Jagdeesan A/c 21,000 14.7.2000 By Furniture A/c 4,000
28.7.2000 To sales A/c 9,000 18.7.2000 By Swaminadhan A/c 12,000
      20.7.2000 By wages A/c 1,800
      22.7.2000 By Trade expenses A/c 150
      26.7.2000 By Swaminadhan A/c 24,000
      29.7.2000 By stationery A/c 180
      30.7.2000 By Miscellaneous 150
Expenses A/c
      31.7.2000 By Drawing A/c 1,480
        By Balance c/d 94,886
           
    238,646     238,646
  To Balance b/d 94,886      
           

Capital A/c
Date Particulars Amount Date Particulars Amount
31.7.2000 To Balance c/d 180,000 1.7.2000 By Cash A/c 180,000
           
    180,000     180,000
      1.8.2000 By Balance b/d 180,000
           

Bank A/c

Date Particulars Amount Date Particulars Amount

3.7.2000 To Cash A/c 55,000      
11.7.2000 To Cash A/c 23,000 31.7.2000 By Balance c/d 78,000
    78,000     78,000
1.8.2000 To Balance b/d 78,000      
           
 Purchases A/c
           
Date Particulars Amount Date Particulars Amount
4.7.2000 To Cash A/c 22,000      
5.7.2000 To Swaminadhan A/c 72,000 31.7.2000 By Balance c/d 111,870
31.7.2000 To Sridhar A/c 17,870      
    111,870     111,870
1.8.2000 To Balance b/d 111,870      
           

Swaminadhan A/c
         
Date Particulars Amount Date Particulars Amount
18.7.2000 To Cash A/c 12,000
     
18.7.2000 To Discount received A/c 240
5.7.2000 By Purchases A/c 72,000
26.7.2000 To cash A/c 24,000
     
  To Balance c/d 35,760
     
31.7.2000          
    72,000     72,000
      1.8.2000 By Balance b/d 35,760
           

Sales A/c

Date Particulars Amount Date Particulars Amount

31.7.2000   6.7.2000 By cash A/c 16,200
      By Vivek A/c 12,700
        By Jagadeesan A/c 35,000
        By Ranjan A/c 23,280
  To Balance c/d 96,180   By Cash A/c 9,000
           
    96,180     96,180
         
        By balance b/d 96,180
           
           

Furniture A/c

Date Particulars Amount Date Particulars Amount

14.7.2000 To Cash A/c 4,000 31.7.2000 By Balance c/d 4,000
           
    4,000     4,000
  To Balance b/d 4,000      
           
Subsidiary Books

Record the following transactions for the month of January 1999 in the purchases book of M/s Narain Electronics:

Jan. 4 Purchased from M/s Brown Electronics:

20 Black&White T.Vs @Rs. 5200 per piece 10 colour T.Vs @
Rs.12000 per piece Trade discount on all items @12%

Jan. 10 Purchased from M/s Mani Electronics:

12 video tapes @ Rs. 600 per piece 8 philips taps recorders @
Rs. 2500 per piece.

Jan. 19 Purchased from Sehgal electronics:

10 LG stereos @ Rs. 3500 per piece 8 LG colour TVs @ Rs.
25000 per piece .Trade discount @15%

Jan. 24 Purchased from M/s Gupta Electronics:

200 Audio cassettes @ Rs. 25 per piece,30 Equity toasters @
Rs. 500 per piece

Also show posting of the above transactions into ledger accounts from purchase book.

Ranjan A/c

Date Particulars Amount Date Particulars Amount

24.7.2000 To sales A/c 23,280 31.7.2000 By Balance c/d 23,280

23,280 23,280

To Balance b/d 23,280

Stationery A/c

Date Particulars Amount Date Particulars Amount

29.7.2000 To cash A/c 180 31.7.2000 By Balance c/d 180

180 180
 To Balance b/d 180

Miscellaneous Expenses A/c

Date Particulars Amount Date Particulars Amount

30.7.2000 To cash A/c 150 31.7.2000 By Balance c/d 150

150 150

1.8.2000 To Balance b/d 150

Sridhar A/c

Date Particulars Amount Date Particulars Amount

24.7.2000 To Balance c/d 17,870 31.7.2000 By Purchase A/c 17870

A/c
17,870 17,870

1.8.2000 By Balance b/d 17,870

Drawings A/c

Date Particulars Amount Date Particulars Amount

31.7.2000 To sales A/c 1,480 31.7.2000 By Balance c/d 1,480

1,480 1,480

To Balance b/d 1,480

Vivek A/c

Date Particulars Amount Date Particulars Amount

16.7.2000 To sales A/c 12,700 17.7.2000 By cash A/c 12,446

By Discount allowed 254

12,700 12,700
 Discount Allowed A/c

Date Particulars Amount Date Particulars Amount

17.7.2000 To Vivek A/c 254 31.7.2000

To Jagadeesan A/c 525 By Balance c/d 779

779 779

To Balance b/d 779

Wages A/c

Date Particulars Amount Date Particulars Amount

20.7.2000 To Cash A/c 1,800 31.7.2000 By Balance c/d 1,800

1,800 1,800

1.8.2000 To Balance b/d 1,800

Jagatheesan A/c

Date Particulars Amount Date Particulars Amount

31.7.2000 To sales A/c 35,000 25.7.2000 By Cash A/c 21,000

25.7.2000 By Discount allowed A/c 525

To Balance b/d 31.7.2000 By Balance c/d 13,475

35,000 35,000

13,475

Trade expenses A/c

Date Particulars Amount Date Particulars Amount

22.7.2000 To cash A/c 150 31.7.2000 By Balance c/d 150

150 150

To Balance b/d 150

Solutions:

Book of M/s Narain Eletronics

Purchase Book

Date Name of the supplier L Inward Details Amount

Invoice No
F Rs Rs

4.1.99 M/s Brown Electronics

20B/W TVs @ Rs. 5,200 Per Piece 1,04,000

10 colour Tvs @ Rs.12000 per piece 1,20,000

2,24,000
Less: Trade discount @ 12%

26,880
1,97,120

10.1.99
M/s Mani Electronics:

12 video tapes @ Rs.600 per piece

7,200
8 Philips tapes @ Rs.2500 per piece
26,880
27,200

19.1.99 M/s Sehgal Electronics:

35,000
10 LG stereos @ Rs. 3500
2,00,000
8 LG colour TVs @ Rs. 25000
2,35,000

Less: Trade discount @ 15 % 35,250

1,99,750

24.1.99
M/s Gupta Electronics

200 Audio cassettes @ Rs.25 per piece 5,000

20,000
50 equity toasters @ Rs. 500 per piece
15,000
Total
4,44,070
Enter the following transactions in the sales book of M/s Saran Raj & Sons and post them onto ledger.

1999

May 2 Sold to M/s Rahul Bros:

200 pieces long cloth @ Rs. 90 per piece

300 pieces shirting @ Rs. 110 per piece

May 5 Sold to M/s Gupta&Verna:

20 pieces coating @ Rs. 250 per piece

May 16 Sold 20 shitrs to cheap stores @ Rs. 30 each for cash.

May 25 Sold old furniture to M/s Santhosh & Co. On creditRs.800.

It is the practise followed by M/s Saran Raj & Sons to allow 10% trade discount on all sales.

Book of M/s Saran Raj & Sons

Sales Book

Date Name of the customer L Outward Details Amount

Invoice No
F Rs Rs

2.5.99 M/s Ragul Bros:

200 pieces long cloth @ Rs. 90 18,000

300 pieces shirting @ Rs. 110 33,000

51,000
Less: Trade discount @ 12%
5,100 45,900

5.5.99
M/s Gupta & Verna:
5,000
20 pieces coating @rs.250
500 4,500
Less:Trade discount @ 10%
16.5.99
M/s Mathur & Jain:

250 blankets @ Rs. 50 12,500

120 blankets @ Rs. 75 9,000

21,500

Less: Trade discount @ 10% 2,150 19,350

 Total 69,750

Prepare purchase returns book and sales book from the following data:

1987 Rs.
Aug-01 Purchased goods returned to Senthil 205
Received goods returned by
3 Natarajan 300
5 Good returned to Kannan 500
Sales returns of Rs.1260 by
7 Mathavan
15 Returned defective goods to Rajan 1,280
18 Damaged goods returned by Murali 1,120
23 Outward returns to Kanagasbai 275
29 Inward returns by Swaminathan 750
30 Returned infertor goods to Sanker 890
31 Selvan Returned goods to us 1330

Solution

Purchase Returns Book

Date Name of the Debit L Amoun
supplier note F t Rs.
no.
1.8.87 Senthil     205
5.8.87 Kannan 500
15.8.87 Rajan 1,280
23.8.87 Kanaga Sabai 275
30.8.87 Sankar 890
     
  Total 3,150
     

Sales Returns Book

Date Name of the Credit L Amount
customer note Rs.
No.
3.8.87 Natarajan     300
7.8.87 Mathavan 1,260
18.8.87 Murali 1,120
29.8.87 Swaminathan 750
31.8.87 Selvan 1,330
     
  Total 4,760
      

Petty cashier received Rs.600 on April 1,1999 from the head cashier. Prepare petty cash book on the imprest system
for the month of April 1999 from the following items:

3 Stamps 50
5 Taxifare 100
6 Pencils & pads 75
7 Registry 25
10 Speed post 45
12 Telegram 35
15 Refreshment 55
16 Autofare 20
19 Typing paper 60
20 Bus fare 15
22 Trunk calls 43
25 Office cleanings 18
30 Courier Services 17

Show the analysis of payments as postage & Stamps, Telephone, conveyance, stationery and sundry expenses.

Assume imprest amount of Rs.600.

 Amount C. Date Particulars V Total Postag Telephone Conveyanc Stationar Sundrie
Rs. B N Paymen e& &Telegra e y s
F t Stamps m
N
    1999                
Apr-01 To Cash -          
3 By Stamps 50 50        
5 By Taxi fare 100     100    
6 By Pencils & 75       75  
pads
7 Registry 25 25        
10 By Speed 45 45        
post
12 By 35   35      
Telegram
15 By 55       55
refreshmen
t  
16 By Auto 20     20  
fare  
19 By Typing 60        
paper  
20 By Bus fare 15     15 60  
22 By Trunk 43   43      
calls
25 By office 18         18
cleaning
30 By courier 17 17        
Services
    558 137 78 135 135 73
30 By Balance 42          
c/d
  To cash 600          
             
May-01 To Balance
b/d            
To Cash            
   
     

The following balance were extracted from the ledger of Ramakrishna engineering work on 31 st March 1997. You are
required to prepare a trial balance as on that date is proper form.
 Rs.
Drawings 6000
Capital 24000
Sundry creditors 43000
Bills payable 4000
Sundry debtors 50000
Bills receivable 5200
Loan from Karthik 10000
Furniture & fixtures 4500
Opening Stock 47000
Cash in hand 900
Cash at bank 12500
Tax 3500
Sales 128000
Salaries 9500
Sales return 1000
Purchase returns 1100
Travelling expenses 4600
Commission paid 100
Track expenses 2500
Discount earned 4000
Rent 2000
Bank overdraft 6000
Purchases 70800

Trial Balance of Ramakrishna Engineering works as on 31-03-10

Sl.No Name of Amount LF Debit balance Rs. Credit balance Rs.
1 Drawings   6000  
2 Capital     24000
3 Sundry creditors     43000
4 Bill payable     4000
5 Sundry debtors   50000  
6 Bills receivable   5200  
7 Loan from Karthik     10000
8 Furniture & fittings   4500  
9 Opening Stock   47000  
10 Cash - in - hand   900  
11 Cash - at - bank   12500  
12 Tax   3500  
13 Sales     128000
14 Salaries   9500  
15 Sales returns   1000  
16 Purchase return     1100
17 Travelling expenses   4600  
18 Commission paid   100  
 19 Trading expenses   2500  
20 Discount earned     4000
21 Rent   2000  
22 Bank overdraft     6000
23 Purchases   70800  
  220100 220100

Reconciliation from favourable cash book balance

From the under mentioned particulars of Mr.M.Mohan prepare a bank reconcilation statement
as on 31st July 1994
Cheques paid into bank on the 28th july 1994 but credited to Mohan's account in the first week
(i) of August 1994. K.Kalyan Rs.1000;J.Joy Rs.800;R.Rahul Rs. 1200
The following cheques were issued by Mohan on 30th July 1994 but presented to bank for
(ii) payment after the close of the year. D.David Rs.1200; H.Hari Rs.1000;L.Lal Rs.800
A cheque for Rs.300 was credited direct to the account and was not passed through the cash
(iii) book.
(iv) The bank balance as per cash book on 31st July 1994 amounted to Rs.30,000.

Bank Reconciliation Statement of M.Mohan as on 31st July 1994

  Rs. Rs.
  Bank balance as per cash book   30,000
Add: (i) Cheques issued but not presented for payment    
  D.David Rs. 1200    
  H.Hari Rs. 1000    
  L.Lal Rs. 800 3,000  
(ii) Cheques credited direct to the account but not passed
  through the cash book 300  
    33,300
Less:
Cheques paid into bank but not credited in the pass book    
  K. Kalyan Rs. 1000    
  J. Joy Rs. 800    
  R. Rahul Rs. 1200    
  3,000 3,000
     
  Bank balance as per pass book   30,300
       
Solution:-
Book of Ms.Akila
Bank Reconciliation Statement as on 31-12-1992
      Rs. Rs.
  Balance as per pass book   31,600
Add: (i) Cheques paid into bank not yet cleared &
credited:    
  Maninder 1400    
  Kalyani 1600    
  Rajesh 1200 4,200  
       
  (ii) Charges recorded in the pass book but not in the
cash book    
  Incidental charges 40    
  Collection charges 30 70  
       
 
(iii) Payment made by the bank directly as per
standing instructions,not recorded in the cash book    
  Insurance premium 700    
  Subscription for commerce 150 850  
       
  (iv) Cheques entered in the cash book but omitted to
be banked 1,000 6,120
     
    37,720
Less: Cheques issued but not yet presented for payment    
  Shalini 1000    
  Bhagat 900 1,900  
       
  Rebate allowed for the bill retired but not enered in
the cash book 40 1,940
     
  Balance as per pass book   35,780
         

Reconciliation from favourable pass book balance

From the following particulars, prepare a bank reconciliation statement as a 31st December 1992 to
find out the balance as per cash book of Mr.Akhila.
(i) The following cheques were paid into bank in December 1992 but were credited by the bank in
January 1993.
Maninder - Rs.1400;Kalyani - Rs.1600; Rajesh - Rs.1200
(ii) The following cheques were issued in December 1992 but were presented for payment in January
1993.
Shalini - Rs.1000; Bhagat - Rs.900
(iii) The following payments made by the bank which were in recorded in the cash book.
incidental charges for the half year ended 31-12-1992 Rs.40
Collection charges for outstanding cheques Rs.30
(iv) The following payments made by the bank direct as per standing instructions were not entered in the
cash book.
Insurance premium-Rs.700;Subscription for commerce-Rs.150
(v) A cheque Rs.1000 which was received from a customer was entered in the bank column of cash book
in December 1992 but was omitted to be banked in December 1992
(vi) A bill for Rs.2000 was reired by the bank under rebatte of Rs.40 but the full amount of the bill was
credited in bank column of the cash book.

The following is the Trial Balance of Ganesh as on 31st March 2002.

Particulars
Sundry debtors
Stock in hand 0n 1.4.02
Cash in hand
Purchases
Sales
Returns
Discount
Bad debts
Bad debts Recovered
Sundry creditors
Salaries
Lease hold premises
Carriage
Fuel & water
Insurance
Commission
Printing & stationery
Wages
Petty ccash expenses
Plant & machinery
Capital
 
 
Sundry creditors

Capital

Reserve