Journal Entry Problems and Solutions

Problem-1
Record
the following transaction into General Journal during the month of January,
2008.
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 |
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
|