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
|
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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