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Journal Entries and Ledger Accounts: Long Question and Solution

Arjun EP

Published on: October 2, 2020

Long Answer Question: Exam Based Problems and Solution

Journal entries and ledger accounts long question and answer.

It is exam based comprehensive question and solution.

It covers large topic of the chapter.

PROBLEM: 8

KL Traders, a sole proprietorship, has following information:

Jan 1: Business started with cash Rs 300,000.

Jan 2: Goods purchased in cash Rs 100,000.

Jan 3: Insurance paid in advance for one year Rs 6,240.

Jan 4: Goods sold for cash Rs 80,000 with the help of sales agent.

Jan 6: Equipment purchased worth Rs 50,000.

Jan 8: Furniture purchase from KN Furniture House Rs 15,000.

Jan 10: Borrow from Raj Rs 50,000.

Jan 12: Bank account opened at City Bank by depositing cash of Rs 80,000.

Jan 14: Commission paid to agent Rs 10,000.

Jan 16: Goods sold to M/s Sharma Bros for Rs 50,000 on account.

Jan 20: Payment made to KN Furniture House by cheque.

Jan 22: Cash received from M/s Sharma Bros Rs 30,000.

Jan 25: Excess furniture sold for Rs 4,000.

Jan 26: Loan given to Mahesh Rs 20,000.

Jan 27: Goods costing Rs 5,000 sold for Rs 7,000.

Jan 28: Damaged goods costing 4,000 sold for Rs 3,500.

Jan 30: Rent paid of Rs 10,200.

Jan 31: Salary payable Rs 22,300.

Required: (a) Journal entries and ledgers accounts

[Answers: (b) Cash Account 248,060; (c) KL Traders capital account 300,000;

(c) Purchase account 100,000; (d) Advance increase account 6,240; (e) Sales account 139,000;

(f) Equipment account 50,000; (g) Furniture 11,000; (h) KN Furniture account 5,000;

(i) Loan from Raj account 50,000; (j) City Bank account 20,000; (k) Commission paid account 10,000;

(l) M/s Sharma Bros account 20,000; (m) Loan to Mahesh account 20,000; (n) P&L account 1,500;

(o) Rent account Rs 10,200; (p) Salary account 22,300; (q) Salary paid account 22,300]

SOLUTION

Cash Account

Date	Particulars	LF	Amount Dr	Date	Particulars	LF	Amount Cr
Jan 1	To Capital		300,000	Jan 2	By Purchase		100,000
Jan 4	To Sales		80,000	Jan 3	By Adv. Insurance		6,240
Jan 10	To Loan from Raj		50,000	Jan 6	By Equipment		50,000
Jan 22	To M/s Sharma Bros		30,000	Jan 12	By City Bank		30,000
Jan 25	To Furniture		4,000	Jan 14	By Commission paid		10,000
Jan 27	To Sales		5,000	Jan 26	By Loan to Mahesh		20,000
Jan 27	To P&L (profit)		2,000	Jan 30	By Rent		10,200
Jan 27	To Sales		3,500	Jan 31	By Balance c/d		248,060
			474,500				474,500
	To Balance b/d		248,060

KL Traders Capital Account

Date	Particulars	LF	Amount Dr	Date	Particulars	LF	Amount Cr
Jan 1	To Balance c/d		300,000	Jan 1	By Cash		300,000

			300,000				300,000
					By Balance b/d		300,000

Purchase Account

Date	Particulars	LF	Amount Dr	Date	Particulars	LF	Amount Cr
Jan 2	To Cash		100,000	Jan 2	By Balance c/d		100,000

			100,000				100,000
	To Balance b/d		100,000

Advance Insurance Account

Date	Particulars	LF	Amount Dr	Date	Particulars	LF	Amount Cr
Jan 3	To Cash		6,240	Jan 3	By Balance c/d		6,240

			6,240				6,240
	To Balance b/d		6,240

Sales Account

Date	Particulars	LF	Amount Dr	Date	Particulars	LF	Amount Cr
Jan 28	To Balance c/d		139,000	Jan 4	By Cash		80,000
				Jan 16	By M/s Sharma Bros		50,000
				Jan 27	By Cash		5,000
				Jan 28	By Cash		3,500
				Jan 28	By P&L		500
			139,000				139,000
					By Balance b/d		139,000

Equipment Account

Date	Particulars	LF	Amount Dr	Date	Particulars	LF	Amount Cr
Jan 6	To Cash		50,000	Jan 3	By Balance c/d		50,000

			50,000				50,000
	To Balance b/d		50,000

Furniture Account

Date	Particulars	LF	Amount Dr	Date	Particulars	LF	Amount Cr
Jan 8	To KN Furniture		15,000	Jan 25	By Cash		4,000
				Jan 25	By Balance c/d		11,000
			15,000				15,000
	To Balance b/d		11,000

KN Furniture Account

Date	Particulars	LF	Amount Dr	Date	Particulars	LF	Amount Cr
Jan 20	To City Bank		10,000	Jan 8	By Furniture		15,000
Jan 20	To Balance c/d		5,000
			15,000				15,000
					By Balance b/d		5,000

Loan from Raj Account

Date	Particulars	LF	Amount Dr	Date	Particulars	LF	Amount Cr
Jan 10	To Balance c/d		50,000	Jan 10	By Cash		50,000

			50,000				50,000
					By Balance b/d		50,000

City Bank Account

Date	Particulars	LF	Amount Dr	Date	Particulars	LF	Amount Cr
Jan 12	To Cash		30,000	Jan 20	By KN Furniture		10,000
				Jan 20	By Balance c/d		20,000
			30,000				30,000
	To Balance b/d		20,000

Commission Paid Account

Date	Particulars	LF	Amount Dr	Date	Particulars	LF	Amount Cr
Jan 14	To Cash		10,000	Jan 14	By Balance c/d		10,000

			10,000				10,000
	To Balance b/d		10,000

M/s Sharma Bros Account

Date	Particulars	LF	Amount Dr	Date	Particulars	LF	Amount Cr
Jan 16	To Sales		50,000	Jan 22	By Cash		30,000
				Jan 22	By Balance c/d		20,000
			50,000				50,000
	To Balance b/d		20,000

Loan to Mahesh Account

Date	Particulars	LF	Amount Dr	Date	Particulars	LF	Amount Cr
Jan 26	To Cash		20,000	Jan 26	By Balance c/d		20,000

			20,000				20,000
	To Balance b/d		20,000

P&L Account

Date	Particulars	LF	Amount Dr	Date	Particulars	LF	Amount Cr
Jan 28	To Sales		500	Jan 27	By Cash		2,000
Jan 28	To Balance c/d		1,500
			2,000				2,000
					By Balance b/d		1,500

Rent Account

Date	Particulars	LF	Amount Dr	Date	Particulars	LF	Amount Cr
Jan 30	To Cash		10,200	Jan 30	By Balance c/d		10,200

			10,200				10,200
	To Balance b/d		10,200

Salary Account

Date	Particulars	LF	Amount Dr	Date	Particulars	LF	Amount Cr
Jan 31	To Salary payable		22,300	Jan 30	By Balance c/d		22,300

			22,300				22,300
	To Balance b/d		22,300

Salary Payable Account

Date	Particulars	LF	Amount Dr	Date	Particulars	LF	Amount Cr
Jan 31	To Balance c/d		22,300	Jan 31	By Salary		22,300

			22,300				22,300
					To Balance b/d		22,300

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