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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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