Bharat Bhushan started a business called Bhushan Traders on April 1, 2019. Over the next year, the business engaged in numerous commercial transactions including purchasing and selling goods, receiving payments from customers, paying expenses, taking out a bank loan, and hiring employees. To properly account for these transactions, the assistant must journalize and post the transactions to ledgers to prepare a trial balance, and then further use this information to prepare trading, profit and loss, and balance sheet accounts which will factor in closing stock amounts, outstanding salary, and depreciation charges.
Bharat Bhushan started a business called Bhushan Traders on April 1, 2019. Over the next year, the business engaged in numerous commercial transactions including purchasing and selling goods, receiving payments from customers, paying expenses, taking out a bank loan, and hiring employees. To properly account for these transactions, the assistant must journalize and post the transactions to ledgers to prepare a trial balance, and then further use this information to prepare trading, profit and loss, and balance sheet accounts which will factor in closing stock amounts, outstanding salary, and depreciation charges.
Bharat Bhushan started a business called Bhushan Traders on April 1, 2019. Over the next year, the business engaged in numerous commercial transactions including purchasing and selling goods, receiving payments from customers, paying expenses, taking out a bank loan, and hiring employees. To properly account for these transactions, the assistant must journalize and post the transactions to ledgers to prepare a trial balance, and then further use this information to prepare trading, profit and loss, and balance sheet accounts which will factor in closing stock amounts, outstanding salary, and depreciation charges.
Bharat Bhushan started a business called Bhushan Traders on April 1, 2019. Over the next year, the business engaged in numerous commercial transactions including purchasing and selling goods, receiving payments from customers, paying expenses, taking out a bank loan, and hiring employees. To properly account for these transactions, the assistant must journalize and post the transactions to ledgers to prepare a trial balance, and then further use this information to prepare trading, profit and loss, and balance sheet accounts which will factor in closing stock amounts, outstanding salary, and depreciation charges.
Story: Bharat Bhushan has been working part time as a
business consultant for several years. He had acquired enough clients and had decided to go into business full time. He created a company called Bhushan Traders on April 1, 2019 and registered it under Goods and Services Tax (GST).
Business Transactions: Following are the transactions for the period April,2019 to March,2020 in the books of Bharat Bhushan.
1-Apr Bharat started business with cash 6,00,000, cash at State Bank of India 7,00,000, furniture 2,00,000. 1-Apr Purchased Plant & Machinery worth 2,50,000 by cheque. 25-Apr Purchased goods from Karim Ltd worth 8,00,000 @10% trade discount. 5-May Cash Sales 1,000,000 @5% trade discount to Ramesh Traders. 15-May Deposited cash with State Bank of India 5,00,000. 5-Jun Paid Dinesh& Co. 3,00,000 in cash. 10-Jun Received commission 75,000 by cheque. 25-Jun Cash Purchases 2,50,000. 5-Jul Sold goods to Mohit Traders 4,75,000. 15-Jul Received 2,75,000 by cheque from M/S Lal & Sons 5-Aug Loan taken from State Bank of India 2,00,000 25-Aug Purchased goods from Singh & Co. 50,000 27-Aug Withdrew cash from bank 10,000. 5-Sep Received commission 55,000 in cash. 10-Sep Paid Garg Bros 70,000 by cheque. 20-Sep Received 90,000 in cash from Sona Traders. 1-Oct Bank loan repaid 50,000. 25-Oct Cash Purchases 25,000. 5-Nov Sold goods to Jain & Sons 47,000. 15-Nov Withdrew cash from bank 15,000. 5-Dec Received interest from bank 5,000. 25-Dec Purchased goods from Mohan Ltd. 75,000. 5-Jan Cash Sales 1,00,000. 15-Jan Carriage Outwards 35,000. 25-Feb Cash Purchases 4,50,000. 28-Feb Office was taken on rent in the month of Feb. Office rent paid in cash 50,000. 28-Feb Employees were hired in the month of Feb. Paid salary by cheque 30,000 & cash 30,000 for the month of Feb 2020. 5-Mar Sold goods to Tiwari & Sons. 6,75,000. 31-Mar Paid office rent by cheque 50,000. 31-Mar Paid salary in cash 30,000 for the month of March 2020.
(i) Journalize the above transactions and post them in Ledgers and prepare a Trial Balance.
(ii) Prepare Trading A/c, Profit & Loss A/c and Balance Sheet taking into consideration: 1. Closing Stock as on 31st March 2020 is 2,00,000. 2. Salary outstanding for the month of March 2020 is 30,000. 3. Depreciation@10% to be charged on Furniture & Fixtures and @15% on Plant & Machinery.