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IIIustration 1:

Journalise the following transaction in the books of Sudhir Kumar:

2006 Rs.
January 1 Sudhir commenced
business with cash. 40,000
3 Purchased goods for cash. 500
5 Sold goods for cash. 300
6 Purchased one motor car for cash. 15,000
9 Sold machinery for cash. 9,000
11 Purchased a building on credit from Narendra. 20,000
15 Sold
furniture on credit to Randhir Kapoor. 9,500
17 Paid cartage. 110
22 Received Commission. 50
27 Cash Sales. 1,200
29 Cash Purchases. 600
30 Received on account from Ahmed. 350
31 Paid cash to Sunitkumar on account.190
IIIustration 2:

Pass Journal entries of the following transaction in the books of Rajesh.

Ajit Sir’s Note: This Problem has some new transactions… They are marked in
different color. Their explanation is provided later.

2006 Rs.
July Rajesh commenced business with 16,000
1 cash. 4,000
3 He bought goods as his capital in the 6,500
7 beginning. 3,100
8 Sold goods to Dinesh on credit.
17 Purchased a Car for cash. 700
Ramesh’s Account which is overdue is 390
20 closed. 3,300
21 As the amount is not recoverable. 325
25 Goods burnt by fire.
Received cash on account from
Dinesh.
Goods distributed as free samples.

17th July Ramesh owed us Rs 700, he was our Debtor. Hence it is said that his
account was overdue. It is not recoverable. This means we have incurred loss of
‘Bad Debts’(Nominal Account). Hence Bad Debts are debited and he should be
removed as my debtor since we don’t expect money back from him. Hence, Ramesh
A/C is credited…

Bad Debts A/C Dr 700


To Ramesh A/C 700

20th July Good are burnt by fire. This means they are ‘going out’. Hence goods
lost by fire account (Real Account) is credited. This is a loss. Hence Loss by Fire A/C
(Nominal) is Debited.

Loss by Fire account Dr 390

To Goods lost by Fire 390

21st July. We have received cash from Dinesh. Cash comes in and Dinesh is
giver.

Cash A/C Dr 3300


To Dinesh A/C 3300

25th July Goods are distributed as free samples. This means they are going out
and this our advertisement expense (Nominal Account)
Advertisement Expense account Dr 325
To Good distributed as free samples A/C 325

IIIustration 3:
Journalise the following transaction.
2006
August Raju commenced business with cash Rs. 5,000, Goods worth Rs.
1 10,000 and Building Rs. 7,000.
Purchased goods worth Rs. 5,000 less 10% trade discount from Mr.
3 Sawant.
4 Sold goods worth Rs. 9,000 less15% trade discount to Mr.Dhekhe.
5 Received cash Rs. 590 from Mr.Mayur and allowed him discount
Of Rs. 10.
6 Paid Rs. 660 to Mr. Royal after deducting Rs. 40 as discount.
7 Purchased goods worth Rs. 500 for cash on 5% cash discount terms.
8 Sold goods worth Rs. 600 for cash on 5% cash discount terms.
10 Received Rs. 575 from Mr.Ramanujan in full settlement of his account
of Rs. 600.
IIIustration 4:
Journalise the following transaction in the books of Mantri:
2006 Rs.
December Received Rs. 10,000 from father-in-law as gift and
1 deposited the account of business.
Took loan from Mrs.Shalini. 5,000
2 Paid Rent to landlord in advance.
3 Received rent from sub-tenants. 75
4 Paid for postal stamps. 100
5 Commission due from Gupta. 10
6 Old Typewriter of Rs. 1,000 are stolen. 40
7 Sent M.O to Radhika Rs. 80, M.O. commission paid.
8 Purchased securities worth Rs. 2,000 and paid for 2
9 brokerage. 60
10 Paid for Mantri’s club bill. 600
11 Gave Charity. 300
12 Sold private scooter and invested in business. 2,000
14 Bought equity shares of Bharat Fertilizers. 900
15 Received from Sita one hundred rupee note and gave
her change for it.
16 Invested in National Small Saving Certificate. 100
17 Paid Rs. 200 for carriage on machinery. 500
18 Till talking (cash sales). 200
19 Paid Income Tax.
IIIustration 5:
Journalise the following transactions in the journal of Pallavi:
April 1 Pallavi having no capital of her own started business with Rs.
20,000 borrowed from Dhanashri @ 12% p.a.
5 Goods worth Rs. 100 were damaged in transit.
7 Received a claim from Railway Authorities.
8 Purchased 25 shares in Y & Co. Ltd., at Rs. 620 per share, and
18 brokerage paid Rs. 10.
Sandhya who is declared insolvent paid Rs. 50 paise in a rupee.
20 The amount due was Rs. 300.
25 Purchased a horse for Rs. 2,000 and paid for carriage Rs. 500.
30 Sold 10 shares in Y & Co. at Rs. 65 per share, brokerage paid Rs.
10.
Interest due on loan Rs. 200.
IIIustration 6:
Prepare the trial balance from the following

2006 Rs.
Aug
1 SHRI RAJAN INVESTED CASH IN BUSINESS. 20,00
0
1 OPENED AN ACCOUNT WITH THE BANK OF INDIA 10,00
BY DEPOSITING CASH. 0
12% FD created by cheque
5000
2 PURCHASED GOODS FOR CASH. 500
3 PURCHASED MACHINERY FOR CASH. 800
4 CASH PURCHASE OF GOODS. 300
5 CASH SALES. 900
6 WITHDRAW CASH FOR PERSONAL USE. 200
8 PURCHASED FROM MEENAKSHI BROS 275
13 SOLD MACHINERY TO RAJESH FOR CASH 100
15 PURCHASED GOODS FROM PREETAM & SONS 600
ON CREDIT.
16 RECEIVED CASH ON ACCOUNT FROM 350
RAMANAND.
16 PAID RENT. 125
19 RECEIVED COMMISSION. 175
22 SOLD GOOD TO MR RAMANAND AGAINST HIS ?
ADVANCE
25 PAID CASH TO MINAKSHI BROS AND SETTLED 250
THE ACCOUNT
27 PAID HALF THE CASH TO PRITAM AGAINST 2% ?
DISCOUNT
30 M/S RAM & SONS RETURNED GOODS. 100
IIIustration 7:

Ajit Sir’s Note:

This is slightly new concept. You can journalize the transactions as usual given in
table 2. When we prepared ledger accounts we arrive at closing balance. It becomes
opening balance on OPPOSITE Side. Given in table 1 are such opening balances. So
you’ll start drawing your ledger accounts with them and continue the ledger
posting. E.g.
Bank A/C shall start as…
Date Particulars Amoun Dat Particulars Amount
t e
01.04.200 To Opening Bal 200000
6

OR
Mujumdar’s A/C
Date Particulars Amoun Date Particulars Amount
t
01.04.200 By Opening Bal. 12000
6

Here onwards, usual posting shall be done

Journalise the following transaction in the books of Ranjit & Company for the month
of April, 2006.
Balances as on : 1st April, 2006 Rs. Balances
Bank balance (with Dena Bank) Rs. Dr Bal
Premises 2,00,000 Dr Bal
Laptop & Printer Rs. Dr Bal
Debtors : 3,60,000
Zaveri Bros. Rs. Dr Bal
Yashwant 1,20,000 Dr Bal
Creditors :
Mujumdar Rs. Cr Bal
Nina 10,000 Cr Bal
Stock of Goods Rs. 8,000 Dr Bal
Loan from Bank Cr Bal
Rs.
12,000
Rs.
18,000
Rs.
80,000
Rs.
60,000
Transaction for the month of April, 2006
April Bought goods from Mr. Mukesh Rs. 40,000 less 10%
3 trade discount.
5 Received Rs. 7,600 from Yashwant in full & final
7 settlement.
8 Goods worth Rs. 9,000 damaged by fire.
Sold goods to Walawalkar on credit Rs. 20,000 less
9 10% trade discount.
12 Cash Rs. 8,000 taken by the proprietor for personal
20 use.
27 Walawalkar paid after adjustment of cash discount of
28 10%.
30 Interest on Bank loan debited to Bank A/c Rs. 1,600.
Paid to Nina Rs. 17,000 in full settlement.
Cash sales Rs. 16,000 less 10% cash discount.
Paid salaries Rs. 12,000.