Question

Q No.14
In July 2005, Nasir Jamal started business and completed following transactions

July 1 He deposited Rs. 165,000 cash in a business bank account.(use cash as title)
July 2 Purchased equipment for Rs. 55,000 from ABC Co. paid Rs.20,000 and balance will be paid after three month
July 7 Paid rent for three months Rs. 1500
July 12 Purchase goods on credit from Khan & Co. Rs. 1200
July 17 Paid salaries to staff Rs. 2500
July 20 Paid to Khan &Co.Rs. 700
July 23 Paid insurance Rs. 400
July 27 Nasir withdrew Rs. 1500 cash from the business for personal use

INSTRUCTION
a. Prepare journal entries
b. Post to ledger accounts
c. Prepare trial balance at July 31,2015

Answer 1

Note- All amounts are in Rs

Journal Entries

S.No	Date	Particulars	Dr (Rs)	Cr (Rs)
1	July 1	Cash A/c dr	165000
		To Capital A/c		165000
2	July 2	Equipment A/c dr	55000
		To cash A/c		20000
		To ABC co. A/c		35000
3	July 7	Rent A/c Dr	500
		Prepaid A/c Dr	1000
		To cash A/c		1500
4	July 12	Purchases A/c Dr	1200
		To Khan And Co.		1200
5	July 17	Salary A/c Dr	2500
		To Cash A/c		2500
6	July20	Khan And Co. A/c Dr	700
		To Cash		700
7	July 23	Insurance A/c Dr	400
		To cash A/c		400
8	July 27	Drawings A/c dr	1500
		To cash		1500

Ledger Accounts

1. Cash Account

Date	Pariculars	Amount	Date	Particulars	Amount
July 1	To capital A/c	165000	July 2	By Equipment	20000
			July 7	By Rent	500
			July 7	By Prepaid Rent	1000
			July 17	By salary	2500
			July 20	By Khan And Co.	700
			July 23	By Insurance	400
			July 27	By drawings	1500
			July 31	To Balance C/d	138400
	Total	165000		Total	165000

2) Capital Account

Date	Pariculars	Amount	Date	Particulars	Amount
July 31	To Balance C/d	165000	July 1	By Cash A/c	165000
	Total	165000		Total	165000

3) Equipment Account

Date	Pariculars	Amount	Date	Particulars	Amount
July 2	To Equipment A/c	55000	July 31	By Bal C/d	55000
	Total	55000		Total	55000

4) ABC & Co. Account

Date	Pariculars	Amount	Date	Particulars	Amount
July 31	To Balance C/d	35000	July 2	By Equipment A/c	35000
	Total	35000		Total	35000

5) Rent Account

Date	Pariculars	Amount	Date	Particulars	Amount
July 7	To Cash	500	July 31	By Balance C/d	500
	Total	500		Total	500

6) Prepaid Rent Account

Date	Pariculars	Amount	Date	Particulars	Amount
July 7	To Cash	1000	July 31	By Balance C/d	1000
	Total	1000		Total	1000

7) Purchases Account

Date	Pariculars	Amount	Date	Particulars	Amount
July 12	To Khan And Co.	1200	July 31	By Balance C/d	1200
	Total	1200		Total	1200

8) Khan and Co. Account

Date	Pariculars	Amount	Date	Particulars	Amount
July 20	To Cash	700	July 12	By Purchases A/c	1200
July 31	To Balance C/d	500
	Total	1200		Total	1200

9) Salary Account

Date	Pariculars	Amount	Date	Particulars	Amount
July 17	To Cash	2500	July 31	By Balance C/d	2500
	Total	2500		Total	2500

10) Insurance Account

Date	Pariculars	Amount	Date	Particulars	Amount
July 23	To Cash	400	July 31	By Balance c/d	400
	Total	400		Total	400

11) Drawings Account

Date	Pariculars	Amount	Date	Particulars	Amount
July 27	To Cash	1500	July 31	By Balance C/d	1500
	Total	1500		Total	1500

TRIAL BALANCE

Particulars	Dr	Cr
Cash	138400
Equipment	55000
Prepaid rent	1000
Salary	2500
Insurance	400
Drawings	1500
Rent	500
Accounts Payable: Khan And co. ABC and Co.		500 35000
Purchases	1200
Capital		165000
Total	200500	200500