Journal Entry Problems and Solutions

 Journal Entry Problems and Solutions 
 Journal Entry Problems and Solutions






Problem-1
Record
the following transaction into General Journal during the month of January,
2008.
Jan. 1
Mr. Khubaib
invested Rs.100,000 into the business.
       2
Purchased
Land for Cash Rs.52000.
      4.
Purchased
Building Rs.36000, paid Rs.6,000 and issued note for the remaining
      8.
Purchased
equipment on credit Rs.13,800.
     15
Sold a part
of equipment on credit Rs.1,800.
     20
Paid
Rs.600. in partial payment of account payable..
     25
Received
Rs.6,800  in partial collection of
account receivable.
     26
Received
Rs.2,000 as advance fee for the work to be performed later on.
    28.
Withdrew
Rs.1,500  for personal use.
     29
Paid
Utility bills Rs.800
     30
Paid salary
to the employees Rs.3000.
Solution:
Date
General Journal
L.F
Debit
Rs.
Credit Rs.
2008
Jan:1
Cash
              Capital- Khubaib
Owner
invested cash in the business
1,00,000
1,00,000
         2.
Land
               Cash
Purchased
land for Cash
52,000
52,000
         4
Building
               Cash
                Notes Payable
Purchased
building and made partial payment
36,000
 
6,000
30,000
        8
Equipment
                Creditors (A/P)
Purchased
equipment on account.
13,800
13,800
       15
Debtors
(A/R)
                 Equipment
Sold a part
of equipment on credit.
 
1,800
 
1,800
       20
Creditors
(A/P)
                  Cash
Made
partial payment of the liability
     
600
    
600
       25
Cash
               Debtors (A/R)
Collected a
part of accounts receivable
   
6,800
 
6,800
      26
Cash
               Unearned Fee
Received
advance fee for the work to be performed later on.
  
2,000
  
2,000
      28
Drawings
                 Cash
Owner
withdrew for living expenses.
 
1,500
  
1,500
      29
Utility
Expenses
                     Cash Account
Paid
utility bills.
    
800
     
800
     30
Salary
Expenses
                      Cash Account
Paid Salary
to the employees.
  
3,000
  
3,000
 Problem-2
1.
Mr. Haris started
business with Cash Rs.2,00,000 and building Rs.5,00,000
2.
Deposited
Rs.50,000 into the bank.
3.
Advance
payment was made for rent of the building Rs.20,000
4.
Purchased
merchandise for Rs.30,000.
5.
Purchased
merchandise on credit Rs.15,000
6.
Returned
defective merchandise to supplier Rs.2000.
7.
Sold
merchandise on credit to Mr. Ahmed Rs.30,000
8.
Merchandise
returned by Mr.Ahmed being defective goods. Rs.1,000
9
Allowance
given to Mr.Ahmed due to defective merchandise Rs.500
10
Received
Cash from Mr.Ahmed in full settlement of his account.




Solution:
           
Date
General Journal
L.F
Dr.
Cr.
1.
Cash
Building
                   Capital-Haris
Owner
invested cash in business.
2,00,000
5,00,000
7,00,000
2.
Bank
             Cash
Cash
deposited into bank.
50,000
50,000
3.
Prepaid
Rent
             Cash
Paid
advance rent
20,000
20,000
4.
Purchases
              Cash
Bought
merchandise for Cash
30,000
30,000
5.
Purchases
               Creditors (A/P)
Purchased
merchandise on account
15,000
15,000
6.
Creditors
(A/P)
                Purchase Return
Defective
goods return to supplier.
2,000
2,000
7.
Debtors
–Ahmed
                           Sales
Sold
merchandise on account.
30,000
30,000
8.
Sales
Return & Allowances
                      Debtors –Ahmed
Defective
goods returned from customer
  
1,000
  
1,000
9.
Sales
Return & Allowances
                      Debtors –Ahmed
Allowance
granted due to defective goods.
     
500
     
500
10.
Cash
              Debtors-Ahmed
Received
cash from Mr.Ahmed in full settlement of his account
28,500
28,500
  
Problem -3
1.
Purchased
Merchandise for Cash Rs.40,000
2.
Merchandise
taken away by the proprietor Rs1000
3.
Merchandise
given as charity Rs. 10000
4.
Merchandise
distributed as free samples. Rs.1000
5.
Merchandise
lost by theft Rs.800
6.
Merchandise
loss by fire  Rs.500
7.
Merchandise
lost by accident during transit Rs.300
8
Merchandise
sold on credit Rs.3000
9.
Merchandise
returned inward Rs.1000
Solution:
Date
General Journal
L.F
Dr.
Cr.
1
Purchases
               Cash
Merchandise
purchased for cash.
40,000
40,000
2.
Drawings
               Purchases
Owner withdrew
goods for personal use.
1,000
1,000
3.
Charity
               Purchases
Goods given
as charity.
10,000
10,000
4.
Free
Samples
               Purchases
Goods given
as free samples.
1,000
1,000
5.
Loss by
theft
               Purchases
Goods lost
by theft.
800
800
6.
Loss by
fire
               Purchases
Goods lost
by fire.
500
500
7.
Loss by
accident
               Purchases
Goods lost
by accident in transit.
300
300
8.
Debtors(A/R)
                Sales
Goods sold
on account.
 
3,000
  
3,000
9.
Sales
Return & Allowances
                Debtors (A/R)
Sold goods
returned due to not according the samples.
 
1,000
  
1,000
Problem-4




March.1
Purchased
merchandise on account Rs.6,000 terms 2/10,n/30
7.
Paid for
merchandise purchased on March-1
10
Purchased
merchandise on account Rs.10,000 terms 1/10,n/30
11.
Returned
part of merchandise purchased on March-10 Rs.400
14
Sold
merchandise on account Rs.4,000 terms 2/10,n/30
18.
Purchased
merchandise for cash Rs.10,000 subject to 5 % 
trade discount
25
Paid amount
due on purchase of March-10
27.
Received
cash for merchandise sold on March-14.
28.
Sold
merchandise on account Rs.8000 Terms 2/10,n/30
31
Received
payment for merchandise sold on March-28.
Solution:
Date
Particulars 
L.F
Dr. Rs.
Cr. 
Rs.
March-1
Purchases
                 Creditors
Bought
merchandise terms 2/10,n/30
6000
6000
7.
Creditors
                  Cash
                  Discount received
Paid amount
within due date
6000
5880
 
120
10
Purchases
                  Creditors
Purchased
merchandise  terms 1/10,n/30
10000
10000
11.
Creditors
                  Purchase Return &
Allowances
     
400
    
400
14.
Debtors
               Sales
Goods sold
on credit terms 2/10,n/30
  
4000
  
4000
18
Purchases
               Cash
Goods
purchased less 5% Trade Discount
 
9500
 
9500
25
Creditors
                Cash
Paid the
amount after due date.
 
9600
  
9600
27
Cash
             Debtors
Cash
received after due date.
 
4000
  
4000
28
Debtors
             Sales
Goods sold
on account terms 2/10,n/30
 
8000
  
8000
31
Cash
Discount
allowed
                     Debtors
Received
amount within due date.
 
7840
   
160
 8000



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