MGT 1021: Fundamental Financial Accounting

Books of Prime Entry

Question 01

Bookkeeper of “Goody Traders” has provided following cash receipts for the month of January
2020.

Date R.No. Transaction

January 01, 2020 01 Owner invested Rs. 400 000 and commenced a business.
January 05, 2020 02 Cash sales Rs. 10 000.
January 12, 2020 - Sold Rs. 24 000 worth of goods to Silva.
January 16, 2020 03 Cash received from Silva Rs. 22 000 discount allowed Rs. 2 000.
January 20, 2020 04 Cash sales Rs. 10 000.
January 25, 2020 05 Rent income received Rs. 48 000.
January 26, 2020 06 Obtained a bank loan Rs. 200 000.
January 27, 2020 07 Commission income received Rs. 20 000
January 31, 2020 08 Cash sales Rs. 12 000
Required:

1. Cash receipts journal

2. Ledger accounts

Question 02

In Sunimal’s business transactions of cash receipts and similar transactions during the month of
February 2020 are given below.

(Rs.)
05.02.2020 Cash sales R. No. 01 1 200 000
10.02.2020 Rent income received R. No. 02 100 000
14.02.2020 Bank loan received R. No. 03 2 000 000
18.02.2020 Receipt from Sanduni R. No. 04 190 000
18.02.2020 Discount given to Sanduni 10 000
20.02.2020 Cash sales R. No. 05 1 000 000
22.02.2020 Receipt from Chathura R. No. 06 980 000
22.02.2020 Discount given to Chathura 20 000
25.02.2020 Commission received R. No. 07 40 000
28.02.2020 Invested additional capital R. No. 08 400 000
You are required to prepare cash receipts journal and ledger accounts for the month of February
2020.

Question 03

Following transactions took place in “Max Enterprises” for the month of December 2019.

December 01, 2019 Cash balance Rs. 1 000 000

December 04, 2019 Cash sales Rs. 50 000
December 08, 2019 Sold goods to Paul Rs. 20 000
December 12, 2019 Investment income received Rs. 24 000
December 19, 2019 Rent income received Rs. 120 000
December 21, 2019 Cash received from Paul Rs. 18000 to settle his sales made on 08.12.2019
December 26, 2019 Cash sales Rs. 20 000
December 29, 2019 Additional capital introduced by the owner Rs. 20 000
December 31, 2019 Cash sales Rs. 10 000

Record the above transactions of Max Enterprises in the Cash Receipts Journal and post them to
the General Ledger.

Question 04

Sanduni is a sole trader. She has provided following information for the month of January 2020.

January 01, 2020 Cash balance Rs. 300 000

Debtors balance Rs. 130 000
Capital balance Rs. 1 000 000
January 02, 2020 Owner invested Rs. 30 000 as additional capital.
January 04, 2020 Cash sales Rs. 20 000
January 06, 2020 Sold Rs. 40 000 worth of goods to Deepan
January 09, 2020 Rent income received Rs. 80 000
January 14, 2020 Cash received from Deepan after deducting a discount of 10% to settle his
sales made on 06.01.2020
January 18, 2020 Investment income Rs. 30 000
January 24, 2020 Business obtained a bank loan Rs. 400 000
January 28, 2020 Cash sales Rs. 40 000
January 31, 2020 Cash received from other debtors Rs. 14 000

You required:

1. Prepare Cash Receipt Journal.

2. Record them in Ledger Accounts.
Question 05

“Pramuka Traders” has provided following cash payments for the month of January 2020.

Date P.V.No. Transaction

January 01, 2020 01 Cash purchases Rs. 28 000.
January 05, 2020 02 Electricity bill paid Rs. 11 000.
January 07, 2020 - Purchased Rs. 40 000 worth of goods from Deepa.
January 10, 2020 03 Salary and wages paid Rs. 40 000.
January 15, 2020 04 Cash paid to Deepa Rs. 35 000 and discount received Rs. 5 000.
January 20, 2020 05 Repayment of Bank loan Rs. 10 000.
January 25, 2020 06 Cash purchases Rs. 34 000.
January 27, 2020 07 Owners cash drawings Rs. 2 000
January 31, 2020 08 Business purchased Rs. 40 000 worth of furniture by paying cash.
Required:

1. Cash Payments Journal

2. Ledger Accounts

Question 06

Thara has provided following information of her business for the month of November 2019.

November 01, 2019 Cash balance Rs. 200 000

November 04, 2019 Owner withdrew Rs. 20 000 for personal use
November 08, 2019 Cash Purchase Rs. 40 000
November 09, 2019 Purchased goods from Peter Rs. 30 000
November 12, 2019 Advertising expenses paid Rs. 40 000
November 18, 2019 purchased equipment on a cash basis Rs. 60 000
November 19, 2019 Cash paid to Peter Rs. 28000 to settle purchase made on 09.11.2019
November 22, 2019 Cash purchase Rs. 40 000
November 28, 2019 Bank loan paid Rs. 15 000 including an interest expense of Rs. 5 000
November 30, 2019 Cash purchase Rs. 10 000

Record the above transactions of Thara’s business in the Cash Payments Journal and post them
to the General Ledger for the month ended November 2019.
Question 07

In “Alpha Traders” transactions of cash payments and similar transactions during the month of
February 2020 are given below.

(Rs.)
03.02.2020 Payments to monthly electricity bill V.No. 01 60 000
08.02.2020 Paid to a creditor V.No. 02 125 000
08.02.2020 Discount received 5 000
12.02.2020 Cash purchase V.No. 03 180 000
16.02.2020 Insurance payment V.No. 04 20 000
17.02.2020 Cash paid to a creditor (5% Discount) V.No. 05 190 000
18.02.2020 Purchased office furniture V.No. 06 100 000
20.02.2020 Paid wages and salaries V.No. 07 60 000
20.02.2020 Paid bank loan installment V.No. 08 24 000
23.02.2020 Cash purchases V.No. 09 44 000
26.02.2020 Cash drawings V.No. 10 10 000

You are required to prepare cash payments journal and ledger accounts for the month of
February 2020.

Question 08

POP Enterprises balance as at June 30, 2019 is as follows.

Rs.
Cash balance 420 000
Creditors control account 140 000
Bank loan 400 000

Following information provided for the month ended July 2019:

July 02, 2019 Cash purchase Rs. 20 000
July 04, 2019 Salary paid Rs. 30 000
July 06, 2019 Owner’s cash drawings Rs. 14 000
July 09, 2019 Repayment of bank loan Rs. 24 000
July 14, 2019 Cash paid to creditors Rs. 95 000 and discount received Rs. 5 000
July 18, 2019 Purchased IT equipment for Rs. 80 000
July 24, 2019 Advertising expenses Rs. 30 000
July 25, 2019 Cash purchases Rs. 44 000
July 26, 2019 Goods purchased from Kumudu for Rs. 20 000
July 28, 2019 Paid Kumudu to settle purchase made on 26.07.2019 after a discount of 5%
July 31, 2019 Cash purchase Rs. 10 000

Prepare Cash Payments Journal and General Ledger.

Question 09

Following transactions took place in the Amara’s business for the month of February 2020.

01.02.2020 Amara invested Rs. 400 000

03.02.2020 Cash purchase Rs. 30 000
07.02.2020 Business obtained a bank loan Rs. 20 000
10.02.2020 Cash sales Rs. 50 000
14.02.2020 Rent paid Rs. 10 000
15.02.2020 Commission income received Rs. 70 000
18.02.2020 Repayment of bank loan Rs. 14 000
21.02.2020 Business purchased Rs. 60 000 worth of goods from Susil
24.02.2020 Owner withdrew Rs. 10 000 for his personal use
25.02.2020 Sold Rs. 80 000 worth of goods to Nadun
26.02.2020 Cash paid to Sunil Rs. 20 000 and discount received Rs. 1000
27.02.2020 Cash received from Nadun Rs. 40 000 and discount allowed Rs. 2 000
28.02.2020 Business purchased Rs. 50 000 worth machinery on cash basis
Required:

1. Cash Receipts Journal and Cash Payments Journal

2. General Ledger

Question 10

Following transactions took place in “Nan Book Center” for the month of December 2019.

Balance as at December 01, 2019 Rs.

Cash control account 240 000

Debtors control account 40 000
Creditors control account 55 000

December 2019
01 Owner invested Rs. 100 000 as additional capital
02 Cash purchases Rs. 40 000
05 Sales to Daya Rs. 20 000
08 Business obtained a bank loan Rs. 200 000
11 Cash sales Rs. 30 000
13 Purchase from Madura Rs. 20 000
16 Cash received from Daya after deducting 10% of discount
19 Cash paid to Madura Rs. 18 000 and discount received 10%
23 Bank loan installment of Rs. 15 000 includes an interest expense of Rs. 1 000
25 Electricity paid Rs. 10 000
27 Investment income received Rs. 120 000
28 Owner withdrew Rs. 8 000 for his personal use
29 Business purchased Rs. 80 000 worth of furniture from AD Ltd
31 Paid AD Ltd Rs. 5 000

You are required to prepare:

1. Cash Journals
2. Ledger Accounts

Question 11
On January 01, 2020 Tharun deposited Rs. 1 600 000 in the business bank account to commence
his trading business. Given below are the transactions that took place during the month of
January.

Date Description Cheque Amount

R.No. P.V.No.
No. (Rs.)
01.01.2020 Cash purchases 1 100200 240 000
02.01.2020 Purchase of equipment 2 100201 160 000
02.01.2020 Cash sales 2 230099 400 000
03.01.2020 Purchase from Amila 200 000
04.01.2020 Sales on credit to Bimal 300 000
05.01.2020 Payment to petty cashier 3 100202 20 000
06.01.2020 Paid transport for goods inward 4 100203 10 000
07.01.2020 Credit purchases from Thilini 160 000
08.01.2020 Credit sales to Chathu 180 000
08.01.2020 Bank loan 3 600 000
09.01.2020 Paid Amila. Discount received 10% 5 100204 180 000
10.01.2020 Received payment from Bimal. Discount allowed 10% 4 320420 270 000
12.01.2020 Cash sales 5 500 000
14.01.2020 Paid building rent 6 100205 40 000
15.01.2020 Cash purchases 7 100206 220 000
18.01.2020 Paid toThilini – Discount received Rs. 10% 8 100207 144 000
22.01.2020 Receipt from Chathu – Discount allowed 10% 6 162 000
25.01.2020 Paid wages 9 100208 20 000
26.01.2020 Drawings by Tharun 10 100209 20 000
28.01.2020 Commission received 7 16 000

You are required to:

1. Prepare Tharun’s Business Cash Receipts Journal and Cash Payments Journal
2. Prepare Ledger accounts
Question 12

Maali’s business carries out all transactions through a bank account. The balance in the bank
account on 01.12.2019 was Rs. 600 000. The transactions during the month of December are
given below:
R.No / Cheque Amount
Date Details
V.No. No. (Rs.’000)
01.12.2019 R. No.01 Cash sales 2 000
02.12.2019 V. No.01 Cash purchases 200100 1 000
04.12.2019 R. No.02 Received from Suresh Cash 750
07.12.2019 V. No.02 Paid to Sujee 200101 700
08.12.2019 V. No.03 Paid electricity bill 200102 150
11.12.2019 R. No.03 Rent income Cash 200
12.12.2019 R. No.04 Received from Nimal after deducting 10% discount 999111 180
14.12.2019 V. No.04 Paid to Supun subject to 10% discount 200103 90
16.12.2019 V. No.05 Paid staff salaries 200104 60
18.12.2019 V. No.06 Purchased motor vehicle 200105 1 250
20.12.2019 R. No.05 Obtained bank loan Cash 1 500
21.12.2019 Bank informed that Nimal’s cheque is dishonored 999111 180
22.12.2019 R. No.06 Cash sales Cash 2 200
23.12.2019 V. No.07 Paid Pasan after deducting a discount of Rs. 25 000 200106 225
24.12.2019 Electricity payment cheque returned due to error 200102 150
25.12.2019 V. No.08 Maali’s drawings 200107 50
26.12.2019 V. No.09 Cash purchases 200108 650
27.12.2019 R. No.07 Received from Chalith Cash 175
31.12.2019 V. No.10 Electricity expenses 200109 150

Required:

1. Prepare Cash Receipts Journal and Cash Payments Journal

2. Cash control account
3. Other ledger accounts
Question 13

Details of petty cash transactions of Hyrex Traders for the month of January 2020 are given
below.

Date Description Voucher No. Rs.

01.01.2020 Received from chief cashier 4 000
02.01.2020 Purchase of stationary 001 200
04.01.2020 Travelling 002 150
05.01.2020 Stamps and envelops 003 50
06.01.2020 Entertainment cost 004 250
07.01.2020 Wages 005 120
08.01.2020 Pens and pencils 006 56
10.01.2020 Newspaper advertisement 007 600
12.01.2020 Vehicle hire charges 008 120
14.01.2020 Newspapers 009 180
15.01.2020 Payment to Priya 010 150
16.01.2020 Payment to Rathna 011 60
18.01.2020 Stationary 012 40
19.01.2020 Telegram 013 30
20.01.2020 Entertainment cost 014 180
22.01.2020 Travelling 015 150
23.01.2020 Postage 016 30
24.01.2020 Registered post charges 017 300
25.01.2020 Vehicle parking charges 018 250
26.01.2020 Postage 019 50
27.01.2020 Advance paid to Perera 020 180
28.01.2020 Stationary 021 50
29.01.2020 Cleaning 022 200
30.01.2020 Tea and coffee 023 100
31.01.2020 Taxi charges 024 150

Petty cash imprest has been reimbursed on February 01, 2020. You are required to prepare a
columnar form Petty Cash Journal analyzing the expenditure under the category of Postage,
Entertainment, Travelling, Miscellaneous expenses and ledger accounts.
Question 14

Lotus Traders petty cash balance as at December 01, 2019 was Rs. 6 000 and petty cash imprest
is Rs. 10 000. Petty cash transactions for the month of December 2019 are given below.

Date Description Voucher No. Rs.

01.12.2019 Received from chief cashier
03.12.2019 Pens and pencils 401 200
04.12.2019 Motor vehicle charges 402 120
06.12.2019 Envelops 403 150
07.12.2019 Cleaning 404 300
08.12.2019 Vehicle hire charges 405 325
09.12.2019 Stationary 406 105
10.12.2019 Paid advance to an employee Anu 407 500
11.12.2019 Electricity 408 350
12.12.2019 Payment to Isuri 409 400
14.12.2019 Postage 410 148
15.12.2019 Telegram 411 276
16.12.2019 Cleaning 412 426
17.12.2019 Travelling expense 413 125
18.12.2019 Refreshments 414 400
19.12.2019 Vehicle parking charges 415 207
22.12.2019 Registered post charges 416 135
23.12.2019 Stamps 417 153
24.12.2019 Entertainment cost 418 482
25.12.2019 Stationary 419 625
26.12.2019 Payments to Silva 420 325
27.12.2019 Cleaning 421 450
28.12.2019 Taxi charges 422 400
29.12.2019 Tea and coffee 423 325
30.12.2019 Purchased files 424 526

Petty cash imprest has been reimbursed on January 01, 2020. You are required to prepare a
columnar form Petty Cash Journal and Ledger Accounts.
Question 15

Given below are the details of credit purchase and credit sales of “Samagi Traders” for the month
ended January 31, 2020.

Date Invoice No. Supplier Description

January 02, 2020 40 Sam Enterprises 100 Kg of onions at Rs. 120 per Kg
50 Kg of coffee at Rs. 200 per Kg
Trade discount 10%
January 15, 2020 41 Wasana Stores 50 Tins of sweet corn at Rs. 350
75 Bottles of tomato sauce at Rs. 200 each
January 23, 2020 42 Silva Traders 50L of Coconut oil at Rs.80 per Liter
200 packets of frozen potatoes at Rs. 300 each
Trade discount 5%

Date Invoice No. Customer Description

January 05, 2020 32 Deepa Traders 10 Kg of onions at Rs. 200 per Kg
12 Tins of sweet corn at Rs. 450
Trade discount 5%
January 20, 2020 33 Sayuli Stores 50 packets of frozen potatoes at Rs. 450 each
20 Bottles of tomato sauce at Rs. 250 each
January 25, 2020 34 Paul Enterprises 10L of Coconut oil at Rs.120 per Liter
10 Kg of coffee at Rs. 300 per Kg
Trade discount 10%
Required to prepare:

1. Purchase journal 4. Debtors ledger

2. Sales journal 5. Creditors ledger
3. General ledger

Question 16

Given below are the details of purchase returns and sales returns of “Samagi Traders” for the
month ended January 31, 2020.

Debit Note
Date Supplier Description
No.
January 08, 2020 15 Sam Enterprises 10 Kg of onions at Rs. 120 per Kg
5 Kg of coffee at Rs. 200 per Kg
Trade discount 10%
January 18, 2020 16 Wasana Stores 10 Tins of sweet corn at Rs. 350
20 Bottles of tomato sauce at Rs. 200 each
January 26, 2020 17 Silva Traders 10L of Coconut oil at Rs.80 per Liter
20 packets of frozen potatoes at Rs. 300 each
Trade discount 5%
 Credit Note
Date Customer Description
No.
January 10, 2020 07 Deepa Traders 5 Kg of onions at Rs. 200 per Kg
2 Tins of sweet corn at Rs. 450
Trade discount 5%
January 24, 2020 08 Sayuli Stores 5 packets of frozen potatoes at Rs. 450 each
10 Bottles of tomato sauce at Rs. 250 each
January 28, 2020 09 Paul Enterprises 3L of Coconut oil at Rs.120 per Liter
4 Kg of coffee at Rs. 300 per Kg
Trade discount 10%

Required to prepare:

1. Purchase returns journal

2. Sales returns journal
3. General ledger
4. Debtors ledger
5. Creditors ledger

Question 17

Transactions of “Sweet Candy Trading Enterprises” for the month of February 2020 are as
follows.

Date Source Doc. No. Details

February 01, 2020 P.I.No. 22 Purchased from Samanali Rs. 40 000.
February 08, 2020 S.I.No. 46 Sold Rs. 25 000 to Kumudu.
February 10, 2020 P.I.No. 23 Purchased Rs. 30 000 worth of goods from Piyal and
10% discount given.
February 12, 2020 S.I.No. 47 Sales made to Amal was Rs. 50 000.
February 14, 2020 D.N.No. 11 Rs. 10 000 worth of goods returned to Samanali.
February 15, 2020 P.I.No. 24 Purchased from Bimal Rs. 60 000.
February 17, 2020 C.N.No. 08 Rs. 15 000 worth of goods returned by Kumudu.
February 18, 2020 D.N.No. 12 Returned Rs. 10 000 worth of goods to Piyal.
February 20, 2020 S.I.No. 48 Sold Rs. 50 000 worth of goods to Chamal and allowed
a discount of 5%.
February 23, 2020 C.N.No. 09 Amal returned Rs. 12 000 worth of goods.
February 25, 2020 D.N.No. 13 Returned Rs. 10 000 worth of goods to Bimal.
February 28, 2020 C.N.No. 10 Chamal returned goods worth Rs. 5 000.
You are required to prepare:

1. Purchase Journal and Sales Journal

2. Returns Inward Journal and Returns Outward Journal
3. General ledger
Question 17

Assets and liabilities of CT Traders as at April 01, 2019 are as follows.

Rs.’000
Land and Building 500
Furniture 100
Motor vehicle 250
Bank loan 300
Trade receivables 175
Trade payables 125
Inventory 110
Cash and bank 250

You are required to:

1. Prepare General journal to record opening entries.

2. General Journal

Question 18

Following information is given relating to “City Traders”.

1. Assets and liabilities as at April 01, 2019:

Rs.’000
Machinery 400
Furniture 250
Inventory 180
Cash and bank 600
Trade receivables 400
Bank loan 330
Trade payables 500

2. Purchased furniture valued Rs. 50 000 from AB Ltd on credit.

You are required to prepare General Journal and General ledger.