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Trial Balance from Journal Entries and Ledgers

Arjun EP

Published on: June 30, 2020

How to make trail balance from journal entries and ledgers?

Journal Entries, Ledgers and Trial Balance are the best concept of accounting. From these concepts, student can understand accounting.

PROBLEM: 2

The following transactions are given by KP Traders during the month of March:

Here, Amount = Rs = $ = £ = € = ₹ = Af = ৳ = Nu = Rf = රු =

a. Kamal invested $/₹/Rs 300,000 cash in the business.

b. Machinery purchased at cost of Rs 120,000. Paid Rs 40,000 as down payment and the rest after 3 months

c. Purchased equipment for Rs 50,000.

d. Purchased inventory on account Rs 200,000.

e. Sale of inventory on account Rs 120,000 and for cash Rs 160,000.

f. Advance rent paid Rs 20,000.

g. Received Rs 90,000 from customers.

h. Paid Rs 50,000 on accounts payable.

i. Loan taken from Mega Bank Rs 100,000.

j. Kamal withdrew Rs 16,000 cash for personal use.

You are required to:

Record the above transactions in a journal

Post the journals in vertical format of ledgers

Prepare a trial balance

[Answer: Trial balance = 910,000]

SOLUTION:

Journal Entries

Date	Particulars		LF	Amount Dr	Amount Cr
	Cash account	Dr	1	300,000
	To Capital account		2		300,000
	(Being- business started with cash)
	Machinery account	Dr	3	120,000
	To Cash account		1		40,000
	To Bills payable account		4		80,000
	(Being- machinery purchased and part payment in cash)
	Equipment account	Dr	5	50,000
	To Cash		1		50,000
	Record of purchase of equipment
	Purchases account	Dr	6	200,000
	To Bills payable account		4		200,000
	(Being- goods purchased on credit)
	Cash account	Dr	1	160,000
	Bills receivable account	Dr	7	120,000
	To Sales account		8		280,000
	(Being- goods sold for cash and credit)
	Advance rent account	Dr	9	40,000
	To Cash account		1		40,000
	(Being- advance rent paid)
	Cash account	Dr	1	90,000
	To Bills receivable		7		90,000
	(Being- cash received from accounts receivable)
	Bills payable	Dr	4	50,000
	To Cash		1		50,000
	(Being- cash paid for accounts payable)
	Cash account	Dr	1	100,000
	To Mega Bank Loan		10		100,000
	(Being- loan received from Mega Bank)
	Drawings account	Dr	11	16,000
	To Cash assets		1		16,000
	(Being- cash withdrawn for personal use)

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Click on link for YouTube videos

ACCOUNTING EQUATION http://tiny.cc/c89jkz

BASIC JOURNAL ENTRIES IN NEPALI http://tiny.cc/uaakkz

BASIC JOURNAL ENTRIES http://tiny.cc/8aakkz

JOURNAL ENTRY AND LEDGER http://tiny.cc/caakkz

LEDGER http://tiny.cc/haakkz

SUBSIDIARY BOOK http://tiny.cc/399jkz

CASH BOOK http://tiny.cc/889jkz

TRIAL BALANCE & ADJUSTED TRIAL BALANCE http://tiny.cc/c59jkz

BANK RECONCILIATION STATEMENT (BRS) http://tiny.cc/q59jkz

DEPRECIATION http://tiny.cc/ugakkz

FINAL ACCOUNT: CLASS 11 http://tiny.cc/y89jkz

ADJUSTMENT IN FINAL ACCOUNT http://tiny.cc/keakkz

CAPITAL AND REVENUE http://tiny.cc/peakkz

SINGLE ENTRY SYSTEM http://tiny.cc/n19jkz

NON-PROFIT ORGANIZATION (NON-TRADING CONCERN http://tiny.cc/j09jkz

GOVERNMENT ACCOUNTING http://tiny.cc/hcakkz

GOSWARA VOUCHER (JOURNAL VOUCHER) http://tiny.cc/hcakkz

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Cash Account (LF 1)

Date	Particulars	LF	Debit	Credit	Balance
	Capital		300,000		300,000	Dr
	Machinery			40,000	260,000	Dr
	Equipment			50,000	210,000	Dr
	Sales		100,000		370,000	Dr
	Advance rent			40,000	330,000	Dr
	Bills receivable		90,000		420,000	Dr
	Bills payable			50,000	370,000	Dr
	Mega Bank loan		100,000		470,000	Dr
	Drawings			16,000	454,000	Dr

Capital Account (LF 2)

Date	Particulars	LF	Debit	Credit	Balance
	Cash			300,000	300,000	Cr

Machinery Account (LF 3)

Date	Particulars	LF	Debit	Credit	Balance
	Cash		40,000		40,000	Dr
	Bills payable		80,000		120,000	Dr

Bills Payable Account (LF 4)

Date	Particulars	LF	Debit	Credit	Balance
	Machinery			80,000	80,000	Cr
	Purchase			200,000	280,000	Cr
	Cash		50,000		230,000	Cr

Equipment Account (LF 5)

Date	Particulars	LF	Debit	Credit	Balance
	Cash		50,000		50,000	Dr

Purchase Account (LF 6)

Date	Particulars	LF	Debit	Credit	Balance
	Bills payable		200,000		200,000	Dr

Bills Receivable Account (LF 7)

Date	Particulars	LF	Debit	Credit	Balance
	Sales		120,000		120,000	Dr
	Cash			90,000	30,000	Dr

Sales Account (LK 8)

Date	Particulars	LF	Debit	Credit	Balance
	Cash			160,000	160,000	Cr
	Bills receivable			120,000	280,000	Cr

Advance Rent Account (LF 9)

Date	Particulars	LF	Debit	Credit	Balance
	Cash		40,000		40,000	Dr

Mega Bank Loan Account (LF 10)

Date	Particulars	LF	Debit	Credit	Balance
	Cash			100,000	100,000	Cr

Drawings Account (LF 11)

Date	Particulars	LF	Debit	Credit	Balance
	Cash		16,000		16,000	Dr

Trial Balance

KP Traders

SN	Name of Ledgers	LF	Amount Dr	Amount Cr
1	Cash	1	4,54,000
2	Capital	2		3,00,000
3	Machinery	3	1,20,000
4	Bills payable	4		2,30,000
5	Equipment	5	50,000
6	Purchase	6	2,00,000
7	Bills receivable	7	30,000
8	Sales	8		2,80,000
9	Advance rent	9	40,000
10	Mega Bank loan	10		1,00,000
11	Drawings	11	16,000
	Total		9,10,000	9,10,000