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