Accounts project

BUSINESS : Grocery store

1. 10 financial transactions ->

1. Started business with cash /Capital – 200000

2. Paid rent - 2000 x 12 = 24000
3. Cost of labour/ paid wages by cheque – 10000 x 3 x 12 =
360000
4. Purchased Machinery by cheque – 200000
5.Paid for Electricity on cash – 3000 x 12 = 36000
6.Paid for Production cost on cash – 53000
7. Paid for Packaging on cash – 20000
8. Paid for Transportation by cheque – 100000
9. Purchased goods from Ramesh & co. on credit – 100000
10. Paid Ramesh & co. for the goods purchased on credit - 107000
( 100000 x 7% (7000) )
1200000
2. Categorising transactions according to 3 types of account ->

1. Capital – Real account

2. Rent – Nominal account
3. Cost of labour – Nominal account
4. Machinery – Real account
5. Electricity – Nominal account
6. Production cost – Nominal account
7. Packaging – Nominal account
8. Transportation – Nominal account
9. Purchased goods from Ramesh & co. on credit – Personal account
10. Paid Ramesh & co. for the goods purchased on credit – Personal account

3. Journal entries ->

1. Cash a/c Dr. 200000

To Capital a/c 200000
( Being business started with capital )

2. Rent a/c Dr. 24000

To cash a/c 24000
( Being the rent paid )

3. Wages a/c Dr. 360000

To bank a/c 360000
( Being wages paid to staff by cheque )

4. Machinery a/c Dr . 200000

To bank a/c 200000
( Being machinery purchased by cheque )

5. Electricity expense a/c Dr. 36000

To cash a/c 36000
( being electricity expenses paid )

6. Production expense a/c Dr. 53000

To cash a/c 53000
( being production expenses paid )

7. Packaging expense a/c Dr. 20000

To cash a/c 20000
( being packaging expenses paid )

8. Transportation expense a/c Dr. 100000

To bank a/c 100000
( being transportation expenses paid )

9. Purchases a/c Dr. 100000

To Ramesh & co. a/c 100000
( beings goods purchased on credit )

10. Ramesh & co. a/c Dr. 100000

 Interst to Ramesh & co. Dr 7000
To cash 107000
( being cash paid for goods purchased on credit )