Problem No.

12 – Stores ledger FIFO & LIFO method

From the following particulates prepare stores ledger account under (i) FIFO (ii) LIFO method.

March 2nd Purchases 200 units @ Rs.200 4th Issued 150 units
6th Purchases 200 units @ Rs.220 10th Issued 100 units
16th Purchases 200 units @ Rs.210
18th Issued 220 units
24th Purchases 150 units @ Rs.230 25th Issued 190 units
28th Issued 30 units
 Stores ledger account FIFO method

Date Receipts Issues Balance

March Units Units Units
Rate Amt. Rate Amt. Rate Amt.
Rs. Rs. Rs. Rs. Rs. Rs.
2 200 200 40000 200 200 40000
4 150 200 30000 50 200 10000
6 200 220 44000
50 200 10000
200 220 44000
10
50 200 10000
150 220 33000
50 220 11000
16 200 210 42000
150 220 33000
200 210 42000
18
150 220 33000
130 210 27300
70 210 14700
24 150 230 34500
130 210 27300
150 230 34500
25
130 210 27300
90 230 20700
60 230 13800
28 30 230 6900 60 230 13800

Date Receipts Issues Balance

Marc Units Rate Amt. Units Rate Amt. Units Rate Amt.
h Rs. Rs. Rs. Rs. Rs. Rs.
2 200 200 40000 200 200 40000
4 150 200 30000 50 200 10000
6 200 220 44000 50 200 10000
200 220 44000
10 100 220 22000 50 200 10000
100 220 22000
16 200 210 42000 50 200 10000
100 220 22000
200 210 42000
18 200 210 42000 50 200 10000
20 220 4400 80 220 17600
24 150 230 34500 50 200 10000
80 220 17600
150 230 34500
25 150 230 34500 50 200 10000
40 220 8800 40 220 8800
28 30 220 6600 50 200 10000
10 220 2200
Stores ledger account
The Main Features of Receipts and Payment Accounts
A receipt payment account has many important features.

 All receipts in a receipts or payments account are recorded on one side (the debit side)
and all payments on the other side (the credit side).
 A receipt payment account is a summary of a cashbook. It begins with the bank balance
and opening cash, sometimes merged. The closing balances are then added.
 This account includes a record of all receipts and payments, both for capital and revenue.
It also contains all cash and bank receipts for the current year. These can be related to
past, present and future accounting periods.
 The double-entry system does not include receipts or payments accounts. These accounts
only contain records of transactions involving cash and banks. Excluded are all non-cash
items.
 These accounts only show cash positions and not surpluses or deficiencies for the period.
These accounts usually show a debit balance. In case of a bank default, the bank balance
will reflect the credit.
 Last but not least, receipts and payments accounts are always ready at the end of the
accounting period. Although it is uncommon, a receipts or payments account could also
have a nil balance.

Draw up an R & P account for ABC Exports for FY 2019-2020 with the data provided.

Amount (in Amount (in

Particulars Particulars
INR) INR)

Donations received for FY

Opening cash in hand 600 2300
2019-20

Proceeds from sports

Bank balance (total) 3600 600
material sales

Materials for sports

Subscriptions for: 2400
purchased
 2017-2018—Rs 250

Expenses on beverages and

2018-2019—Rs 3800 4500 300
food

2019-2020—Rs 450

Income from refreshments

500 Rent (paid) 1500
provided

Miscellaneous Fees 500 Salaries & wages (paid) 1250

Closing cash in hand 200

Purchase of furniture 750

Misc. Expenses 600

Expenses for events 1200

Maintenance 1000

Solution:
Based on standard Receipts and Payments Format, here is the balanced table of accounts.
For FY 2019-2020
Debit Credit

Amount (in Amount (in

Receipts Payments
INR) INR)

Balance b/d Rent (paid) 1500

 Cash in hand 600
Materials for sports
2400
bought
Total money in bank 3600

Subscriptions for: Maintenance 1000

2017-18—Rs 250
Expenses on
4500 300
refreshments
2018-19—Rs 3800

2019-20—Rs 450

Income from refreshments

500 Salaries & wages (paid) 1250
provided

Miscellaneous Fees 500 Expenses for events 1200

Donations received for FY

2300 Purchase of furniture 750
2019-20

Proceeds from sports material

600 Misc. Expenses 600
sales

Balance c/d

Cash in hand 200

Bank (Balanced Figure)

3300

12,500 12,500

.
Prepare Receipt and Payment Account of Geeks Organisation from the following information
given:
1. Opening balance on 1.4,2021
 Cash in Hand ₹36,400
 Bank overdraft ₹9,020
2. Subscriptions:
 2020-21 ₹32,000
 2021-22 ₹1,15,500
 2022-23 ₹17,500
3. Expenses made by Organisations during the year ₹30,900(including ₹1,600 salary unpaid
on 31.3.2021 and ₹2,200 salary unpaid on 31.3.2022) for Salary, ₹2,350 for Postage and
Stationery,₹5,600 for Electricity charges, ₹7,070 on purchase of periodicals and ₹950 on
advertisement.
4. Incomes of the Organisation during the year ₹1,900 for sale of old newspaper, ₹8,500 for
interest on investment, ₹11,000 for Donations.
5. ₹4,200, which were bad debts in the year 2019-20, realized 75% from his state this year.
6. Grants of ₹4,030 and Legacies of ₹7,770 received.
7. Purchased furniture for ₹25,555.
8. ₹28,080 received on account of donations for building.
9. The Organisation received ₹96,400 as Entrance Fees and ₹1,30,500 as Life Membership
fees.
10. ₹27,00 was paid as Audit fees for this year’s audit of books of accounts and ₹18,405 for
Rates and Taxes.
11. Closing Balance of Cash at Bank was ₹1,66,600.
Solution:
Whether you're preparing for your first job interview or ai

SRM INSTITUTE OF SCIENCE AND TECHNOLODGY

CYCLE TEST-II
1. Prepare vertical balance sheet:
(10 marks)
 (20 Marks)
2. From the following Trial Balance of Geeks Ltd. on 31st March, 2022. Prepare the
necessary Income statement and balance sheet (Vertical).

Closing stock on 31st March 2022 was ₹82,000.

3. Prepare vertical income statement(USA) from the following:

4. Prepare Income statement of M/s Akanksha Ltd. showing Gross Profit, Operating
Profit, and Net Profit for the year ending 31st March, 2022 from the following
information:
1. Give journal entries in books of M/s Farah traders from the following transactions, post them
to ledger and prepare trial balance : 1. Commenced business with cash 1,10,000 2. Opened bank
account with H.D.F.C. 50,000 8. Purchased good from M/s Saif Traders 42,000 14. Sold goods
on credit to M/s. Sami Traders 12,000 20. Received cash from Sami Traders 12,000 22. Goods
return to Saif Traders 2,000 23. Cash paid to Saif Traders 39,000 in full settlement. 30. Paid
salary to Rishabh 4,000

Ananth is a trader dealing in textiles. For the following transactions, pass journal entries for the
month of January, 2018.

Jan. Rs.

1 Commenced business with cash 70,000

2 Purchased goods from X and Co. on credit 30,000

3 Cash deposited into bank 40,000

4 Bought a building from L and Co. on credit 95,000

5 Cash withdrawn from bank for office use 5,000

6 Cash withdrawn from bank for personal use of Ananthu 4,000

7 Towels given as charities 3,000

8 Shirts taken over by Ananth for personal use 12,000

9 Sarees distributed as free samples 3,000

10 Goods (table clothes) used for office use 200

Solution
20 Journal Entries

Journal is the book of initial entry, hence the transactions are at first recorded in the journal by
the way of journal entries.

Journal entries are made as per the double entry system of accounting, where for each
transaction one account is debited and another account is credited.

In the case of compound journal entries, one set of accounts is debited and one set of accounts is
credited.

The amount of debit and credit always remains the same.

For example, when cash is introduced into a business, it affects two accounts: Cash A/c and
Capital A/c. The accounts are debited and. credited as per the golden rules of accounting.

The journal entries which I have provided are based on the following transactions and events:

1. The business started with Rs. 1,00,000

2. Bought machinery for Rs. 15,000 and furniture for Rs. 10,000
3. Purchased goods of Rs. 20,000 with cash
4. Bought Stationery for Rs. 500
5. Cash deposited into bank Rs. 40,000
6. Goods sold to Matt for Rs. 15,000
7. Purchased goods from Uday of Rs. 30,000
8. Being Rs. 5,000 rent paid for premises
9. Cheque received from Matt of Rs. 15,000
10. Defective goods returned to Uday returned of Rs. 2,000
11. Cash sales of Rs. 25,000
12. Carriage Inward paid Rs. 700
13. Cash withdrawn from bank Rs. 15,000
14. Full payment made to Uday in cash. Discount received from Uday Rs. 1000.
15. Refreshments given to customers of Rs. 200
16. Goods sold to Shyam for Rs. 7,500
17. Goods purchased from Ram of Rs. 50,000
18. Salaries paid to employees by bank Rs. 5,000
19. Good sold to Suri for Rs. 25,000
20. Insurance premium paid of Rs. 1,500 by the bank.
Journal Entries

The journal entries based on the above are as follows:

Ledgers

Ledger is known as the book of final entry. It is the book where the transactions related to a
specific account are posted. This posting of transactions is done from journal entries.

The posting of journal entries into the ledger is performed in the following way:

The journal entry of cash sales is :

Cash A/c Dr. Amt

To Sales A/c Amt

Here, Cash A/c is debited to Sales A/c. So, in the Cash A/c ledger, posting will be made on the
debit side as “To Sales A/c”
In the Sales A/c ledger, the posting will be made on the credit as “By Cash A/c” because Sales
A/c is credited to Cash A/c

For creating ledgers, journal entries are a prerequisite.

Now, the ledgers to be created as per the journal entries made above are as follows:

1. Cash A/c
2. Bank A/c
3. Capital A/c
4. Furniture A/c
5. Machinery A/c
6. Purchase a/c
7. Sales A/c
8. Matt A/c (Debtor)
9. Uday A/c (Creditor)
10. Rent A/c
11. Purchase Return A/c
12. Stationery A/c
13. Carriage Inward A/c
14. Refreshment A/c
15. Shyam A/c (Debtor)
16. Ram A/c (Creditor)
17. Suri A/c (Debtor)
18. Refreshment A/c
19. Discount Received A/c

The account ledgers are as follows:

Trial Balance

A trial balance is a statement that is prepared to check the arithmetical accuracy of books of
accounts.

In this statement, the total of all accounts having debit balance and the total of all accounts
having credit balance is computed. If the total of debit and credit matches, then it can be said
that the books of accounts are arithmetically accurate.

Here also we have prepared the trial balance by computing the total of accounts having debit
balances and the total of accounts having credit balances

The debit column total and credit column total are matching. Hence, we can say that the books of
accounts we have prepared are arithmetically accurate.

Note: Matt A/c and Uday A/c have not appeared in the trial balance because they do not have
any carrying balance.
Question

Journalise the following transactions, post them into Ledger, balance the accounts and prepare a Trial
Balance :−
201 (₹)
7
Mar Shyam Sunder & Sons commenced business with cash 80,0
ch 1 00
2 Purchased goods for cash 36,0
00
3 Machinery purchased for cash 4,00
0
4 Purchased goods from :
Raghu 22,0
00
Dilip 30,0
00
6 Returned goods to Raghu 4,00
0
8 Paid to Raghu, in full settlement of his account 17,5
00
10 Sold goods to Mahesh Chand & Co. for ₹ 32,000 at 5% trade
discount
13 Received cash from Mahesh Chand & Co. 19,8
00
Discount allowed 200
15 Paid cash to Dilip 14,8
50
Discount received 150
20 Sold goods for cash 25,0
00
24 Sold goods for cash to Sudhir Ltd. 18,0
00
25 Paid for Rent 1,50
 0
26 Received for Commission 2,00
0
28 Withdrew by Proprietor for his personal use 5,00
0
28 Purchased a fan for Proprietor's house 1,20
0

Solution
Journal
In the Books of…
L.F Debit Amount (R Credit Amount (R
Date Particulars
. s) s)
2017
Mar. Dr
Cash A/c 80,000
01 .
To Capital A/c 80,000
(Business started with cash)
Mar. Dr
Purchases A/c 36,000
02 .
To Cash A/c 36,000
(Goods purchased for cash)
Mar. Dr
Machinery A/c 4,000
03 .
To Cash A/c 4,000
(Machinery purchased for cash)
Mar. Dr
Purchases A/c 52,000
04 .
To Raghu’s A/c 22,000
To Dilip’s A/c 30,000
(Goods purchased on credit from
Raghu and Dilip)
Mar. Dr
Raghu’s A/c 4,000
06 .
To Purchases Return A/c 4,000
(Goods returned to Raghu)
Mar. Dr
Raghu’s A/c 18,000
08 .
To Cash A/c 17,500
To Discount Received A/c 500
(Cash paid to Raghu in full
settlement)
Mar. Dr
Mahesh Chand & Co. 30,400
10 .
To Sales A/c 30,400
(Goods sold to Mahesh Chand & Co. at
trade discount)
Mar. Dr
Cash A/c 19,800
13 .
Discount Allowed A/c 200
To Mahesh Chand & Co. 20,000
(Cash received from Mahesh
Chand & Co.)
Mar. Dr
Dilip’s A/c 15,000
15 .
To Cash A/c 14,850
To Discount Received A/c 150
(Cash paid to Dilip)
Mar. Dr
Cash A/c 25,000
20 .
To Sales A/c 25,000
(Goods sold for cash)
 Mar. Dr
Cash A/c 18,000
24 .
To Sales A/c 18,000
(Goods sold for cash)
Mar. Dr
Rent A/c 1,500
25 .
To Cash A/c 1,500
(Rent paid)
Mar. Dr
Cash A/c 2,000
26 .
To Commission A/c 2,000
(Commission received)
Mar. Dr
Drawings A/c 6,200
28 .
To Cash A/c 6,200
(Cash withdrawn and fan
purchased for personal use)
TOTAL 3,12,100 3,12,100

Cash Account
Dr. Cr.
Amount (Rs
Date Particulars J.F. Date Particulars J.F. Amount (Rs)
)
2017 2017
Mar.0 Mar.02
Capital A/c 80,000 Purchases A/c 36,000
1
Mar.1 Mahesh Chand &
19,800 Mar.03 Machinery A/c 4,000
3 Co.
Mar.2
Sales A/c 25,000 Mar.08 Raghu’s A/c 17,500
0
Mar.2
Sales A/c 18,000 Mar.15 Dilip’s A/c 14,850
4
Mar.2
Commission A/c 2,000 Mar.25 Rent A/c 1,500
6
Mar.28 Drawings A/c 6,200
Mar.31 Balance c/d 64,750
1,44,800 1,44,800

2017
Apr.01 Balance b/d 64,750
Capital Account
Cr
Dr.
.
Amoun
Particula J.F Amount (R Particular J.F
Date Date t
rs . s) s .
(Rs)
2017 2017
Mar.3 Balance
80,000 Mar.01 Cash A/c 80,000
1 c/d

80,000 80,000

2017
Apr.01 Balance
80,000
b/d
Purchases Account
Dr Cr
. .
Amou
J. Amount (R Particula J.
Date Particulars Date nt
F. s) rs F.
(Rs)
2017 2017
Mar.0 Mar.3 Balance
Cash A/c 36,000 88,000
2 1 c/d
Mar.0 Raghu’s A/c
22,000
4
Dilip’s A/c 30,000
88,000 88,000

2017
Apr.0
Balance b/d 88,000
1
Machinery Account
Dr. Cr.
Amount Amount
Date Particulars J.F. Date Particulars J.F.
(Rs) (Rs)
2017 2017
Mar.3
Mar.03 Cash A/c 4,000 Balance c/d 4,000
1
4,000 4,000

2017
Apr.01 Balance b/d 4,000
Raghu’s Account
Dr. Cr.
J.F Amount (Rs J.F Amount (Rs
Date Particulars Date Particulars
. ) . )
2017 2017
Mar.0 Purchases Return 4,000 Mar.0 Purchases A/c 22,000
6 A/c 4
Mar.0 Cash A/c 17,500
8
Discount Received 500
A/c
22,000 22,000
Dilip’s Account
Dr. Cr.
Amount (Rs
Date Particulars J.F. Date Particulars J.F. Amount (Rs)
)
2017 2017
Mar.04 Purchases
Mar.15 Cash A/c 14,850 30,000
A/c
Mar.15 Discount Received A/c 150
Mar.31 Balance c/d 15,000
30,000 30,000

2017
Apr.01 Balance b/d 15,000
Purchases Return Account
Dr. Cr.
Amount
Date Particulars J.F. Date Particulars J.F. Amount (Rs)
(Rs)
2017 2017
Mar.3 Mar.0
Balance c/d 4,000 Raghu’s A/c 4,000
1 6
4,000 4,000

2017
Apr.01 Balance b/d 4,000
Discount Received Account
Dr. Cr.
Date Particulars J.F. Amount (Rs) Date Particulars J.F. Amount (Rs)
2017 2017
Mar.31 Balance c/d 650 Mar.08 Raghu’s A/c 500
Mar.15 Dilip’s A/c 150
650 650
 2017
Apr.01 Balance b/d 650
Discount Allowed Account
Dr. Cr.
Amount (Rs Amount
Date Particulars J.F. Date Particulars J.F.
) (Rs)
2017 2017
Mar.1 Mahesh Chand &
200 Mar.31 Balance c/d 200
3 Co.
200 200

2017
Apr.01 Balance b/d 200
Mahesh Chand & Co.
Dr. Cr.
Amount (Rs
Date Particulars J.F. Date Particulars J.F. Amount (Rs)
)
2017 2017
Mar.10 Sales A/c 30,400 Mar.13 Cash A/c 19,800
Discount
Mar.13 200
Allowed A/c
Mar.31 Balance c/d 10,400
30,400 30,400

2017
Apr.01 Balance b/d 10,400
Rent Account
Dr Cr
. .
Amoun Amoun
J.F Particular J.F
Date Particulars t Date t
. s .
(Rs) (Rs)
2017 2017
Mar.2 Mar.3
Cash A/c 1,500 Balance c/d 1,500
5 1
1,500 1,500

2017
Apr.01 Balance b/d 1,500
Commission Account
Cr
Dr.
.
Amoun Amoun
Particular J.F J.F
Date t Date Particulars t
s . .
(Rs) (Rs)
2017 2017
Mar.3 Mar.2
Balance c/d 2,000 Cash A/c 2,000
1 6
2,000 2,000

2017
Apr.01 Balance b/d 2,000
Drawings Account
Dr. Cr.
Particular Amount J.F Amount
Date J.F. Date Particulars
s (Rs) . (Rs)
2017 2017
Mar.28 Cash A/c 6,200 Mar.31 Balance c/d 6,200
6,200 6,200

2017
Apr.01 Balance b/d 6,200
Sales Account
Dr. Cr.
 J.F Amount Amount
Date Particulars Date Particulars J.F.
. (Rs) (Rs)
2017 2017
Mahesh Chand &
Mar.31 Balance c/d 73,400 Mar.10 30,400
Co.
Mar.20 Cash A/c 25,000
Mar.24 Cash A/c 18,000
73,400 73,400

2017
Apr.01 Balance b/d 73,400
Trial Balance as on March 31, 2017
Debit Credit
Name of L.F
Balances Amount ( Balances Amount (
Accounts .
Rs) Rs)
Cash A/c 64,750
Capital
80,000
A/c
Purchases
88,000
A/c
Machinery
4,000
A/c
Dilip’s A/c 15,000
Purchases
4,000
Return A/c
Discount
Received 650
A/c
Discount
Allowed 200
A/c
Mahesh 10,400
Chand &
 Co.
Rent A/c 1,500
Commissio
2,000
n A/c
Drawings
6,200
A/c
Sales A/c 73,400
Total 1,75,050 1,75,050

Suggest Corrections

229

SIMILAR QUESTIONS
Q. Journalise the following transactions, post them into Ledger and prepare a Trial Balance:
2019 (₹) 2019
April 1 Mohan commenced business with cash 1,00,000 April Received cash from Gopal
20
April 3 Bought goods 5,000 Discount Allowed
April 4 Sold goods to Gopal 4,000 April Paid wages
25
April Bought goods from Ram 8,000 April Paid to Ram in full settlement
10 27
April Paid trade expenses 2,000 April Paid rent
15 30

Q. Following balances appeared in the books of Ram & Shyam on January 1, 2017 :−
Assets : Cash in hand ₹ 30,000; Stock ₹ 36,000; Lal Chand ₹ 7,600; Mukesh Khanna ₹ 16,200;
Furniture ₹ 8,000.
Liabilities : Ghanshyam ₹ 6,000; Vinod ₹ 8,000.
Following transactions took place during Jan. 2017 :−

2017
Jan. 2 Purchased Typewriter for ₹ 7,500.
4 Sold goods for Cash of the list price of ₹ 25,000 at 20% trade discount and 5% Cash discount.
6 Sold goods to Gopal Seth for ₹ 10,000.
8 Gopal Seth returned goods for ₹ 1,500.
12 Purchased goods from Arun ₹ 12,000; and from Varun ₹ 15,000.
13 Settled Arun's account in full after deducting 5% for cash discount.
14 Paid cash to Ghanshyam in full settlement of his account.
16 Received ₹ 7,500 from Lal Chand in full settlement of his account.
17 Purchased a Scooter for office use ₹ 18,000.
20 Sold goods for cash ₹ 20,000.
22 Received from Gopal Seth ₹ 4,850 and discount allowed ₹ 150.
27 Paid for Wages ₹ 7,000 and Salaries ₹ 3,000.
 28 Withdrew goods for ₹ 2,000 and Cash ₹ 1,500 for private use.
29 Paid for Life Insurance Premium of the Proprietor ₹ 1,600.

Journalise the above transactions, post them into Ledger, balance them and prepare a Trial Balance.

Q. Write up the following transactions in the Journal of Ashok and post them to the Ledger for April,
2017. Also, prepare the Trial Balance as on 30th April, 2017.

2017 ₹
April 1 Commenced business with cash 40,000
April 2 Deposited in bank 30,000
April 5 Bought goods for cash 5,000
April 7 Sold goods to Amit 2,500
April 9 Bought goods from Parvat 5,100
April
Received cash from Amit 1,950
12
Discount allowed 50
April
Paid cash to Parvat 3,900
13
Discount allowed by him 100
April
Received cash for goods sold 2,750
14
April
Bought goods from Dinesh 2,350
15
April
Withdrew cash for private expenses 1,000
16
April
Received cash from Amit and deposited into bank 500
17
April Paid sundry trade expenses 250
20
April
Paid rent 450
25
April
Paid cash to Dinesh 2,300
28
Discount allowed by him 50
April
Goods sold to Romy 4,750
29
April Paid for carriage 50
30

Q. Prepare Returns Inward and Return Outward Books of Manoj, Mumbai from the following
transactions and post them into Ledger Accounts:

2019

March 1 Mathur Bros., New Delhi, returned:

5 pairs of Shoes for being defective @ ₹ 2,000 per pair

Less: Trade Discount 10%, IGST was charged @ 18%

March 5 Returned to Kanpur Leather Private Ltd., Kanpur:

100 pairs of Chappals being not up to the approved sample. They were
purchased @ ₹ 300 per pair

Less: Trade Discount 15%

IGST was paid @ 18%

Baluja Shoes Co., Mumbai, returned 12 pairs of ladies chappals sold to them
March 12
@ ₹ 4,000 per pair

Less: Trade Discount 10%, CGST and SGST was charged @ 9% each

March 20 Returned to Bata Shoes Pvt Ltd., Mumbai:

100 pairs B.S.C Canvas Shoes @ ₹ 500 per pair

Less: Trade Discount 15%

CGST and SGST was paid @ 9% each

 Journal Entries and Ledger
Question and Answer

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21.
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How to Prepare for an External Financial Statement Audit

Difficulty Rating:
Intermediate
 Time limit:
20 minutes

Question:
Q: Mr Robert commenced business on 1st January, 2011 with a capital of $100,000 in cash.
On the same date he opened the bank account in ADCB and deposited $20,000. During the
month of January 2011 the following transactions took place:

Jan 1 Bought goods for cash 70,000

2 Sold goods to Steve Co. (Credit) 38,000

15 Sold goods for cash 9,000

21 Steve Co. paid by cheque 35,000

22 Stationery bill paid by cheque 2,000

22 Telephone bill by cash 500

31 Paid rent by cash 2,000

Paid salaries by cash 3,000

Withdrew cash personal use 5,000

Required:
Record journal entries for the transactions and post them to ledgers.

Solution:

Journals:
Jan 1 Dr Cash on hand 80,000
Dr Bank 20,000
Cr Capital 100,000

Note that in most accounting questions you won't have to account for "Cash on hand" and
"Bank" in separate accounts. In most questions I just combine these into "Bank." But in this
question they specifically talk about opening the bank account with $20,000 of the $100,000,
which indicates they kept
cash on hand in addition to the bank account, which needs to be accounted for.

1 Dr Purchases/Inventory 70,000
Cr Cash on hand 70,000

Note that it's "Purchases" for a periodic system of inventory and "Inventory" if it's the perpetual
system. See the tutorial on perpetual and periodic inventory for more information.

2. Dr Debtors 38,000
Cr Sales 38,000

15. Dr Cash on hand 9,000

Cr Sales 9,000

21. Dr Bank 35,000

Cr Debtors 35,000

22. Dr Stationery expense 2,000

Cr Bank 2,000

22. Dr Telephone expense 500

Cr Cash on hand 500

31. Dr Rent expense 2,000

Cr Cash on hand 2,000

31. Dr Salaries 3,000

Cr Cash on hand 3,000

31. Dr Drawings 5,000

Cr Cash on hand 5,000
Ledger:
There you go. Hope you enjoyed this detailed journal entries and ledger question and answer.

Thanks to Kay Khine, Kong Chenda and others for contributions in the Comments section below
that helped solve this question!

Good luck with your studies!

- Michael Celender
Founder of Accounting Basics for Students