Question

Case 2. The following transactions are given from books of Al Karama LLC for the year 2019. You are requested to create ledgers and record the journal entries and generate the following reports.  

  

1. Trial Balance 2. Day Book 3. Income Statement.                                           

Date		Amount (in RO)
2019
Jan 1	Opening Balances : Buildings A/C	30,000
	Furniture A/C	15,000
	Cash A/C	35,000
	Bank A/C	17,500
	Al Khalid Product Company A/C ( Dr. Balance)	9,000
	Bank overdraft	12,500
	Capital A/C	?
Jan 2	Brought additional capital into the business	40,000
Jan 31	Deposited into bank	10,000
Feb 1	Purchased goods and paid by cheque	4,000
Feb 2	Purchased goods from Barka Industrial Company and got 5% trade discount	12,000
Mar 1	Cash Sales	10,000
Mar 2	Goods returned to Barka  Industrial Company	1,000
Mar 31	Purchased Equipment from Al Qurm Engineering Company	15,000
Apr 1	Withdrew from bank for office use	3,000
Apr 2	Sold goods to Ruwi Industries	15,000
May 1	Paid Wages and Salaries	3,000
May 2	Goods returned by Ruwi Industries	1,500
May 31	Paid carriage inwards	1,500
June 1	Received Commission	2,000
June 2	Received from Ruwi Industries	8,000
July 1	Paid to Barka  Industrial Company	5,000
July 2	Received from Al Khalid Product Company in full settlement	8,700
July 31	Paid to Barka  Industrial Company in full settlement	5,200
Aug 1	Goods Distributed as free samples	5,000
Aug 2	Received a cheque from Ruwi Industries in full settlement	5,000
Aug 31	Goods taken by proprietor for personal use	2,000
Sep 1	Paid Telephone charges by cheque	200
Sep 2	Paid Rent	1,000
Oct 1	Paid for Fuel and Power	500
Oct 31	Purchased goods and paid by cheque	9,500
Oct 31	Purchased goods from Muscat Chemical Industries	15,500
Oct 31	Cash Sales	25,000
Oct 31	Sold goods to Al Naba Services	25,000
Oct 31	Purchased goods from Raya Industries Company	8,000
Nov 1	Cash withdrawn from bank by proprietor for personal use	1,500
Nov 1	Sold Machinery worth RO. 3250 for RO. 3000
Nov 1	Goods returned to Muscat Chemical Industries	1,500
Nov 1	Goods returned by Al Naba Services	1,000
Nov 2	Paid carriage on purchases	150
Nov 2	Withdrew from bank for office use	2,500
Nov 2	Brought additional capital into business	50,000
Nov 2	Received cash from Oman Packaging Factory for cash sale	6,000
Nov 2	Purchased Equipment worth	11,500
Nov 2	Paid Insurance on Office Building	1,350
Nov 30	Paid for fuel and Power	950
Nov 30	Goods taken by proprietor for personal use	1,000
Nov 30	Sold goods to L&T Industries	14,800
Dec 1	Advertisement expenses	2,500
Dec 1	Deposited into Bank	15,000
Dec 31	Received interest	150
Dec 31	Paid Electricity charges	1,100
	Paid Salaries and Wages through bank transfer	2,500

Answer 1

Journal Entries

Date	Account Titles and Explanation	Debit	Credit
		(in RO)	(in RO)
02-Jan	Cash	40,000
	Capital		40,000
	(To record additional capital introduced)
31-Jan	Bank	10,000
	Cash		10,000
	(To record cash deposited in Bank)
01-Feb	Purchase of Goods	4,000
	Bank		4,000
	(To record goods purchased)
02-Feb	Purchase of goods	11,400
	Accounts Payables		11,400
	(To record goods purchased on credit from Barka Industrial Company after deducting 5% Trade discount)
01-Mar	Cash	10,000
	Sales		10,000
	(To record Cash Sales)
02-Mar	Accounts Payables	950
	Purchase Return		950
	(To record purchase return)
31-Mar	Equipment	15,000
	Accounts Payables		15,000
	(Purchased equipmennt on credit from Al Qurm Engineering Company)
01-Apr	Cash	3,000
	Bank		3,000
	(To record Cash Withdrawal from Bank for office use)
02-Apr	Accounts Receivables	15,000
	Sales		15,000
	(To record sales made to Ruwi Industries on credit)
01-May	Salaries and Wages Expenses	3,000
	Cash		3,000
	(To record salaries and wages expense)
02-May	Sales Return and Allowances	1,500
	Accounts Receivables		1,500
	(To record Sales Return from Ruwi Industries)
31-May	Carriage Expense	1,500
	Cash		1,500
	(To record carriage inwards)
01-Jun	Cash	2,000
	Income from Commission		2,000
	(To record commission received)
02-Jun	Cash	8,000
	Accounts Receivables		8,000
	(To record payment received from Ruwi Industries)
01-Jul	Accounts Payables	5,000
	Cash		5,000
	(To record payment made for Barka Industrial Company )
02-Jul	Cash	8,700
	Discount Allowed	300
	Accounts Receivable		9,000
	(To record full settlement of Al Khalid Product Company)
31-Jul	Accounts Payables	5,450
	Cash		5,200
	Discount Received		250
	(To record full settlement of Barka Industrial Company)
01-Aug	Promotional Expense - Free Samples	5,000
	Purchase of goods		5,000
	(To record goods distributed as free samples)
02-Aug	Bank	5,000
	Discount Allowed	500
	Accounts Receivables		5,500
	(To record payment received from Ruwi Industries in Full Settlement)
31-Aug	Drawings	2,000
	Purchase of goods		2,000
	(To record drawings made by proprietor)
01-Sep	Telephone Expense	200
	Bank		200
	(To record telephone charges paid by cheque)
02-Sep	Rent Expense	1,000
	Cash		1,000
	(To record payment of Rent Expense)
01-Oct	Power and Fuel Expense	500
	Cash		500
	(To record payment in cash for fuel and power expense)
31-Oct	Purchase of goods	9,500
	Bank		9,500
	(To records purchases made and payment made through cheque)
31-Oct	Purchase of goods	15,500
	Accounts Payables		15,500
	(To record purchase of goods on credit from Muscat Chemical Industries)
31-Oct	Cash	25,000
	Sales		25,000
	(To record sales made in cash)
31-Oct	Accounts Receivables	25,000
	Sales		25,000
	(To record goods sold on credit to Al Naba services)
31-Oct	Purchase of goods	8,000
	Accounts Payables		8,000
	(To record purchase of goods on credit from Raya Industries Company)
01-Nov	Drawings	1,500
	Bank		1,500
	(To record cash withdrawn by Proprietor from Bank for Personal use)
01-Nov	Cash	3,000
	Loss on Sale of Machinery	250
	Machinery		3,250
	(To record sale of Machinery at less than Book Value)
01-Nov	Accounts Payable	1,500
	Purchase Return		1,500
	(To record Purchase Return to Muscat Chemical Industries)
01-Nov	Sales Return and Allowances	1,000
	Accounts Receivables		1,000
	(To record Sales Return from Al Naba Services)
02-Nov	Purchase of goods	150
	cash		150
	(To records carriage inward payment to be included in cost of purchases)
02-Nov	Cash	2,500
	Bank		2,500
	(To withdraw from Bank for office use)
02-Nov	Cash	50,000
	Capital		50,000
	(To record additional capital introduced)
02-Nov	Cash	6,000
	Sales		6,000
	(To record sales made in cash)
02-Nov	Equipment	11,500
	Cash		11,500
	(To record Purchase of equipment for cash)
02-Nov	Insurance Expense	1,350
	Cash		1,350
	(To record Insurance Expense for office building)
30-Nov	Power and Fuel Expense	950
	Cash		950
	(To record payment in cash for fuel and power expense)
30-Nov	Drawings	1,000
	Purchase of goods		1,000
	(To record drawings made by proprietor)
30-Nov	Accounts Receivables	14,800
	Sales		14,800
	(To record goods sold on credit to L&T Industries)
01-Dec	Advertisement Expense	2,500
	Cash		2,500
	(To record advertisemnt expense paid in cash)
01-Dec	Bank	15,000
	Cash		15,000
	(To record cash deposited into Bank)
31-Dec	Cash	150
	Income from Interest		150
	(To record Interest Received)
31-Dec	Electricity Expense	1,100
	Cash		1,100
	(To record electricity charges paid in cash)
31-Dec	Salaries and Wages Expense	2,500
	Bank		2,500
	(To record payment for Salaries and Wages paid through Bank Transfer)

Ledger Accounts

Account Name	Cash
		Debit	Credit	Balance
Date	Description	Debit	Credit
01-Jan	Opening Balance			35,000
02-Jan	Capital	40,000		75,000
31-Jan	Bank		10,000	65,000
01-Mar	Sales	10,000		75,000
01-Apr	Bank	3,000		78,000
01-May	Salaries and Wages Expense		3,000	75,000
31-May	Carriage Expense		1,500	73,500
01-Jun	Commission	2,000		75,500
02-Jun	Accounts Receivables	8,000		83,500
01-Jul	Accounts Payables		5,000	78,500
02-Jul	Accounts Payables		5,200	73,300
02-Sep	Rent Expense		1,000	72,300
01-Oct	Power and Fuel Expense		500	71,800
31-Oct	Sales	25,000		96,800
01-Nov	Machinery	3,000		99,800
02-Nov	Purchases-Carriage Inward		150	99,650
02-Nov	Bank	2,500		102,150
02-Nov	Capital	50,000		152,150
02-Nov	Sales	6,000		158,150
02-Nov	Equipment		11,500	146,650
02-Nov	Insurance Expense		1,350	145,300
02-Nov	Power and Fuel Expense		950	144,350
01-Dec	Advertisement Expense		2,500	141,850
01-Dec	Bank		15,000	126,850
31-Dec	Interest Received	150		127,000
31-Dec	Electricity Expense		1,100	125,900