JOURNALS

1 a. goods sold to Zacob and Sons for Rs 63900 but has been recorded in the books for rs 69300

b.goods sold on credit to vicajee brothers for Rs 84900 has been returned by him of value rs 73800

but this return effect has not been recored in the books of account.

c. cash sales of rs 96000 was wrongly recored in the receipt side of bank column of cash book

d. purchases of rs24000 made through cheques and recorded in payment side of cash column of
cashbook

e.jyoismita paid her dues in full and final settlement for rs.63000(original dues rs 66000) by cheque and

this cheque is subsequently dishonoured bt this dishonor effect is not recordd in books of account

f.sold goods to A for cash rs48000

g.purchased goods from N rs 18000

SOLUTION
1a) sales a/c Dr 5400

To zacob n sons 5400

b) sales return a/c 73800

to vicajee brother 73800

c) cash a/c dr 96000

to bank 96000

d) cash a/c dr 24000

to bank 24000

e) jyotismita a/c dr 66000

to discount 3000

to bank 63000

f) cash a/c dr 48000

to sales 48000
g) purchase a/c dr 18000

to N’s a/c 18000

JOURNAL ENTRY

1 A)goods purchased from rudrani for 3600 on credit has been recorded in the books for
rs 6300
b) repairs for furniture for rs 6000 was debited to plant account

c)sales of rs 60000 recived in cheque but reoreded on receipt side of cash column of cash book

d)purchases through csh for rs96000 wrongly recorded on payment side of bank column of
cashbook

e)materials purchased for reselling has been utilized for erection of building but no entry to this
effect has yet been passed

f)purchased goods worth rs 27000

g)sold goods to L rs 30000

ANSWERS
1 A)rudrani a/c dr 2700

To purchase 2700

b) repairs to furniture a/c dr 6000

to plant a/c 6000

c) bank a/c dr 60000

to cash a/c 60000

d)bank a/c dr 96000

to cash 96000

e)building a/c dr 63000

 to purchase 63000

f)purchase a/c dr 27000

to cash 27000

g)L’S A/C dr 30000

to sales 30,000

JOURNAL

1 a)goods sold to vinayk for rs 33000 and settled his accountfor rs 31500 by paying through
cheque.subsequently vinayak returned goods of value rs11000 and this return transaction has
not been recorded.

b)goods sold to percy for rs98000 has been recorded in the purchase day book for rs89000

c)return outward book is undercast by rs 3600

d)purchase from girija for 8400 has been correctly recorded in purchase day book and girija has
been debited for 4800

e)cash sales of rs8900 has recorded in sales a/c correctly but bank a/c has been wrongly
credited for rs9800

ANSWERS
a) Sales return a/c dr 11000

To discount allowed 500

To vinayak 10500

b) Purchase a/c dr 89000

Sales ac dr 98000

To percy 187000

c) Suspense a/c dr 3600

T o return outward a/c 3600

d) Suspense a/c dr 13200

 To girija a/c 13200

e) Cash a/c dr 8900

Bank a/c dr 9800

To suspense 18700

JOURNAL ENTRY
1a)Purchase of furniture for office use has been debited to purchase a/c for93000
b)Good sold to varuch and company for rs72000 has been recored in purchase day book

c)one acmachine of rs 36000 meant for office use has been taken by thr proprietor for his
personal use but not recorded in the books of accounts.

d) payment received from nagesh for rs42000 through moneyorderbut not recorded in books of
accounts.

e)sold goods worth rs 33000

g)borrowed cash from kamal for rs 63000

ANSWERS

a)Office furniture a/c Dr 93000

To purchase 93000

b) Varucha a/c Dr 144000

To purchase 72000

To sales 72000

c)Drawings a/c Dr 36000

To ac machine a/c 36000

d)Cash a/c Dr 42000

To nagesh 42000

e)Cash a/c Dr 33000

 To sales 33000

e) Cash a/c Dr 63000

To loan 63000

2. On 24/6/2007 XYZ ltd. Purchased a machine costing rs 675000 and further expenditure of rs 142000
incurred for installation of the machine.The machine was put to use on and from 02/10/2007.XYZ ltd.
Following calendar year as itz financialyear.rate of depreciation for machine is 10% p.a.method o
recording of depreciation is by creating provision for depreciation.method of allocating depreciation
is’’straight line method’’.the asset used up to 31/03/12and sold the asset on 1/04/12 for rs 380000.

You are required to prepare a)machine account, b)provision for depreciation account

c)asset disposal account d)to show how the profit or loss,if any,arising out of the sale of asset il be
presented in profit/loss a/c

SOLUTION

MACHINE A/C

Dr cr

Date particular amount date particular amount

. .

24/06/07 To bank a/c 817000 31/12/07 By balance c/d 817000

817000 817000

1/1/08 To balance b/d 817000 31/12/08 By balance c/d 817000

817000 817000

1/1/09 To balance b/d 817000 31/12/09 By balance c/d 817000

 817000 817000

1/1/10 To Balance b/d 817000 31/12/10 By Balance c/d 817000

817000 817000

1/1/11 To Balance b/d 817000 31/12/11 By Balance c/d 817000

817000 817000

1/1/12 To Balance b/d 817000 1/04/12 By Asset disposal 817000

817000 817000

PROVISION FOR DEPRICIATION

Date particular amount date particular amount
. .
31/12/07 To Balance c/d 20430 31/12/07 By depreciation 20430

20430 20430

31/12/08 To Balance c/d 102130 1/1/08 By Balance b/d 20430

31/12/08 By Depriciation 81700

102130 102130

31/12/09 To Balance c/d 183830 1/1/09 By Balance b/d 102130

31/12/09 By depreciation 81700

183830 183830

31/12/10 To Balance c/d 265530 1/1/10 By Balance b/d 183830

31/12/10 By Depriciation 81700

265530 265530

31/12/11 To Balance c/d 347230 1/1/11 By Balance b/d 265530

31/12/11 by depreciation 81700

347230 347230

31/3/12 To Bal c/d. 367660 1/1/12 By Balance b/d 347230

31/3/12 By dep 20430

367660 367660
 1/4/12 To Asset disposal 367660 1/4/12 By bal b/d 367660

367660 367660

ASSET DISPOSAL A/C

Date particular amount date particular amount

. .

1/4/12 To Machine a/c 817000 1/4/12 By Bank 380000

1/4/12 By Prov. fr dep 367660

1/4/12 By P/L 69340

817000 817000

P/L A/C
Date particular amount date particular amount

. .

To loss on sale of machine 69340

2.On 14/6/2008 XYZ Ltd. Purchased a machine costing rs 549000 and further
expenditure of rs 147000 incurred for installation of the machine. the machine was put
to use on and from 01/07/2008. XYZ ltd is following calendar year as its financial year.
Rate of depreciation for the machine is 10%pa. method of recording of depreciation is
by’’charging to asset’’.method of allocating depreciation is ‘’written down value
method’’. The asset used upto 31/12/12 and sold the asset on 1/1/13 for rs 434000.
 You are required to prepare a)machine account b)asset disposal account

c)asset disposal account d)to show profit/loss

ANSWER

Total estimated cost-

Machine cost-549000

Expenditure-147000

696000

MACHINE ACCOUNT
Date particular amount date particular amount

. .

1/7/08 By Bank 696000 31/1/08 By Depriciation 34800

31/12/08 By bal c/d 661200

696000 696000

1/1/09 By Bal b/d 661200 31/12/09 By dep. 66120

31/12/09 By bal c/d 595080

661200 661200

1/1/10 By Bal b/d 595080 31/12/10 By Dep. 59510

31/12/10 By Bal c/d 535570

595080 595080

1/1/11 By Bal b/d 535570 31/12/11 By Dep. 53560

31/12/11 By Bal c/d 482010

 535570 535570

1/1/12 By Bal b/d 482010 31/12/12 By Dep. 48200

31/12/12 By Bal c/d 433810

482010 482010

1/1/13 By Bal b/d 433810 1/1/13 By Asset dis. 433810

ASSET DISPOSAL A/C

Date particular amount date particular amount

. .

1/1/13 To Asset 433810 1/1/13 By Bank 434000

1/1/13 To Profit 190

434000 434000

PROFIT/LOSS A/C
. .
by gain on sales 190

2.on 7/5/07 firoz ltd purchased an equipment costing 669000and further expenditureof rs
339000 incurred for installation of the equipment.the equipment was put touse on and from
2/7/07 . firoz ltd is following calendar year as its financial year.Rate of depreciation for the
machine is 10%p.a.methos of recording of depreciation is by charging to asset. Method of
allocating depreciation is written down value method. The asset used upto 31/12/11 and sold
the asset on 1/1/12 for rs 630000/

Prepare a)machine account b)asset disposal account c)profit/loss

ANSWERS
 MACHINE ACCOUNT

Date particular amount date particular amount

. .

2/7/07 To Bank 1008000 31/12/07 By depreciation 50400

31/12/07 By Bal c/d 957600

1008000 1008000

1/1/08 To Balance b/d 957600 31/12/08 By Dep. 95760

31/12/08 By Bal c/d 861840

957600 957600

1/1/09 To Balance b/d 861840 31/12/09 By Dep. 86180

31/12/09 By Bal c/d 775660

861840 861840

1/1/10 To Balance b/d 775660 31/12/10 By Dep. 77570

31/12/10 By Bal. c/d 698090

775660 775660

1/1/11 To Balance b/d 698090 31/12/11 By Dep. 69810

31/12/11 By Bal. c/d 628280

698090 698090

1/1/12 To Balance b/d 628280 31/12/12By Asset disp. 628280

ASSET DISPOSAL A/C

DATE PARTICULAR AMOUNT DATE PARTICULAR AMOUNT

. .

To Machine a/c 628280

 To P/L A/C 1720 By Bank 630000

630000 630000

P/L ACCOUNT
Date particular amount date particular amount

. .
By profit on sale 1720

BRS
Prepare bank reconciliation statement as on 3/8/13 in the books of mr naga from following
information.

a)Bank balance as per cash book (-)12900

b)Cheque issued but returned unpaid 18900

c)Insurance premium directly paid by bank as per standing instructn 7200

d)cheque issued by naga bro. credited to naga’s a/c by bank 7500

e)A wrong credit given by bank 9300

f)Cash receipt wrongly recorded in credit sode of bank column of cash book 7800

ANSWER
bank reconciliation statement as on 3/8/13 in the books of mr naga

(+) ( -)
a)Bank balance as per cash book 12900
b)Cheque issued but returned unpaid 18900

c)Insurance premium directly paid by bank as per standing instructn 7200

d)Cheque issued by naga bro. credited to naga’s a/c by bank 7500

e)A wrong credit given by bank 9300

f)Cash receipt wrongly recorded in credit sode of bank column of cash book 7800

43500 20100

Bank balance as per pass book(favourable) 23400

43500 43500