Question

In: Accounting

Prepare Accounting Equations, Journal, Ledgers and Trial Balance A) Raj started his business for Rs. 5,00,000....

Prepare Accounting Equations, Journal, Ledgers and Trial Balance

A) Raj started his business for Rs. 5,00,000.

B) Purchased stock from A for Rs. 1,50,000 for credit

C) Sold goods for cash for Rs. 1,20,000

D) Paid electricity Rs. 3,000

E) Purchased office stationery Rs. 1,500

F) Received commission Rs. 3,000

G) paid to A 1,45,000 and he gave discount Rs. 5,000.

H) Paid Carriage on sales Rs. 450

Solutions

Expert Solution

  • All working forms part of the answer
  • Requirement 1: Accounting Equation -------- ASSETS = LIABILITIES + CAPITAL

Transaction

Assets

=

Liabilities

+

Owner's Equity

Capital +

Statement of Profit and Loss - Net Profit

Cash

Stock

=

Accounts Payable/Creditor

+

Sales revenue +

Commission earned +

Discount received

(- ) Carriage outward

(-)Electricity

(-)Office Stationery

A

₹                                          500,000.00

=

+

₹        500,000.00

B

₹                      150,000.00

=

₹               150,000.00

+

C

₹                                          120,000.00

=

+

₹           120,000.00

D

₹                                             -3,000.00

=

+

₹        3,000.00

E

₹                                             -1,500.00

=

+

₹      1,500.00

F

₹                                               3,000.00

=

+

₹            3,000.00

G

₹                                         -145,000.00

=

₹              -150,000.00

+

₹                5,000.00

H

₹                                                 -450.00

=

+

₹                      450.00

Ending Balance

₹                                          473,050.00

₹                      150,000.00

=

₹                                 -  

+

₹        500,000.00

₹           120,000.00

₹            3,000.00

₹                5,000.00

₹                      450.00

₹        3,000.00

₹      1,500.00

  • Requirement 2: Journal Entries

Transaction

Journal

Debit

Credit

A

Cash

₹                      500,000.00

Capital

₹                                    500,000.00

(business started)

B

Stock/Inventory

₹                      150,000.00

Accounts Payable/Creditor

₹                                    150,000.00

(Stock purchased on credit)

C

Cash

₹                      120,000.00

Sales

₹                                    120,000.00

(goods sold for cash)

D

Electricity expense

₹                           3,000.00

Cash

₹                                         3,000.00

(expense paid)

E

Office Stationery

₹                           1,500.00

Cash

₹                                         1,500.00

(Stationery purchased)

F

Cash

₹                           3,000.00

Commission earned (received)

₹                                         3,000.00

(commission received in cash)

G

Accounts Payable/Creditor

₹                      150,000.00

Discount received

₹                                         5,000.00

Cash

₹                                    145,000.00

(account paid off and settled)

H

Carriage outward

₹                              450.00

Cash

₹                                             450.00

(Carriage on sale)

  • Requirement 3: Ledger accounts

Cash

Capital

₹        500,000.00

Electricity expense

₹            3,000.00

Sales

₹        120,000.00

Office Stationery

₹            1,500.00

Commission earned

₹             3,000.00

Accounts Payable/Creditor

₹       145,000.00

Carriage outward

₹                450.00

Ending Bal c/d

₹       473,050.00

TOTAL

₹        623,000.00

TOTAL

₹       623,000.00

Capital

Ending Bal c/d

₹        500,000.00

Cash

₹       500,000.00

Total

₹        500,000.00

Total

₹       500,000.00

Stock/Inventory

Accounts Payable/Creditor

₹        150,000.00

Ending Bal c/d

₹       150,000.00

Total

₹        150,000.00

Total

₹       150,000.00

Accounts Payable/Creditor

Cash

₹        145,000.00

Stock/Inventory

₹       150,000.00

Discount received

₹             5,000.00

Total

₹        150,000.00

Total

₹       150,000.00

Sales

Ending Bal c/d

₹        120,000.00

Cash

₹       120,000.00

Total

₹        120,000.00

Total

₹       120,000.00

Electricity expense

Cash

₹             3,000.00

Ending Bal c/d

₹            3,000.00

Total

₹             3,000.00

Total

₹            3,000.00

Office Stationery

Cash

₹             1,500.00

Ending Bal c/d

₹            1,500.00

Total

₹             1,500.00

Total

₹            1,500.00

Commission earned (received)

Ending Bal c/d

₹             3,000.00

Cash

₹            3,000.00

Total

₹             3,000.00

Total

₹            3,000.00

Discount received

Ending Bal c/d

₹             5,000.00

Accounts Payable/Creditor

₹            5,000.00

Total

₹             5,000.00

Total

₹            5,000.00

Carriage outward

Cash

₹                450.00

Ending Bal c/d

₹                450.00

Total

₹                450.00

Total

₹                450.00

  • Requirement 4: Trial balance

Accounts Name

Debit

Credit

Cash

₹   473,050.00

Stock

₹   150,000.00

Accounts Payable/Creditor

₹                   -  

Capital

₹ 500,000.00

Sales revenue

₹ 120,000.00

Commission earned

₹      3,000.00

Discount received

₹      5,000.00

Carriage outward

₹            450.00

Electricity

₹        3,000.00

Office Stationery

₹        1,500.00

TOTAL

₹   628,000.00

₹ 628,000.00

ekkarill92 answered 2 years ago
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