Question

Prepare Accounting Equations, Journal, Ledgers and Trial Balance

1. Mr. Haris started business with Cash Rs. 1,00,000, Bank Rs. 50,000.

2. He purchased Leasehold Premises – Rs. 1,80,000 and Machinery – Rs. 2,70,000

3. Purchased from Bhoi & Sons goods worth Rs. 20,000 [ 80 units] through cheque at a TD of Rs. 5 per unit.

4. Sold some goods to Ram & Sons for credit, 50 units @ Rs. 1500 per unit at 12 Rs. per unitTD and Rs. 5 per unit as CD

5. Sold remaining goods for Rs. 50,000 and received the money thorough cheque.

6. Paid rent – Rs. 4,500.

7. Paid for general expenses Rs. 1,500

8. Purchased office Stationary Rs. 2,000 through cheque.

9. Purchased a motor van for the business – Rs. 2,00,000. installation of the machinery Rs. 5,000

10. Depreciation on machinery – Rs. 5,000.

11. Loan taken for Rs. 50,000.

Answer 1

	Journal Entry	Accounting Equation - Assets = Liabilities + Owners' Equity + (Revenue - Expenses) - Draws
1	Cash 100,000 Bank 50,000    Capital 150,000	150,000 = 0 + 150,000
2	Premises 180,000 Machinery 270,000 Accounts Payable 450,000 (Assumed purchased on credit)	450,000 = 450,000 + 0
3	Purchases 19,600 Bank 19,600	-19,600 =0+ (19,600)	TD = 80*5 = 400
4	Ram & Sons 74,400 Sales 74,400	74,400 = 0+ 74,400	TD = 12*50 = 600 CD recorded when payment is received
5	Bank 50,000 Sales 50,000	50,000 = 0+ 50,000
6	Rent 4,500 Cash 4,500	-4,500= 0 + (4,500)
7	General Expenses 1,500 Cash 1,500	-1,500= 0 + (1,500)
8	Office Stationery 2,000 Bank 2,000	-2,000= 0 + (2,000)
9	Motor Van 205,000 Accounts Payable 205,000 (Assumed purchased on credit)	205,000 = 205,000 + 0
10	Depreciation 5,000 Machinery 5,000	-5,000= 0 + (5,000)
11	Cash 50,000 Loan Payable 50,000	50,000 = 50,000 + 0	Ledger Accounts 1) Cash A/c 5) Bank 9) General Expenses To Capital                     1,00,000.00 By Rent           4,500.00 To Capital           50,000.00 By purchases     19,600.00 To Cash                     1,500.00 BY bal c/f           1,500.00 To Loan Payable                       50,000.00 By General Expenses           1,500.00 To Bank         50,000.00 By Office Stationery       2,000.00 BY bal c/f     1,44,000.00 BY bal c/f     78,400.00 2) Premises 6) Ram & Sons 10 ) Office Stationery To Accounts Payable                     1,80,000.00 To Sales         74,400.00 To Bank                     2,000.00 BY bal c/f           2,000.00 BY bal c/f     1,80,000.00 BY bal c/f     74,400.00 . 3) Machinery 7) Sales 11)   Motor Van To Accounts Payable                     2,70,000.00 By Depreciation           5,000.00 By Ram & Sons     74,400.00 To Accounts Payable                 2,05,000.00 BY bal c/f     2,65,000.00 By Bank     50,000.00 BY bal c/f     2,05,000.00 To bal c/f     1,24,400.00 12)   Loan Payable 4) Accounts Payable   8) Rent By Cash           50,000.00 By Premises     1,80,000.00 To bal c/f                   50,000.00 By Machinery     2,70,000.00 To Cash           4,500.00 By Motor Van     2,05,000.00 BY bal c/f       4,500.00 To bal c/f                   6,55,000.00 13) Capital To Cash     1,00,000.00 To bal c/f               1,50,000.00 To Bank         50,000.00 Trial Balance Debit Credit Cash   1,44,000.00 Bank      78,400.00 Premises 1,80,000.00 Machinery 2,65,000.00 Accounts Payable   6,55,000.00 Ram & Sons      74,400.00 Sales 1,24,400.00 Rent        4,500.00 General Expenses        1,500.00 Office Stationery        2,000.00 Motor Van 2,05,000.00 Loan Payable      50,000.00 Capital 1,50,000.00 Depreciation        5,000.00 Purchases      19,600.00 Total 9,79,400.00 9,79,400.00