Question

Journalise the following transactions in the books of Shrinath Apte.
(i) Opened bank account with PNB Rs. 10,000.
(ii) Cash sent to bank Rs. 50,000.
(iii) Bought shares in 'Birla Ltd' for Rs. 5000 and brokerage paid @ 2%. The Payment is made by cheque.
(iv) A received cheque for Rs. 1,56,000 from John in full settlement of his account of Rs. 1,60,000.
(v) Paid Rs. 1,78,000 to Smith in full settlement of Rs. 1,80,000 Due to him by cheque.
(vi) A cheque from a customer amounted to Rs. 5,000 deposited in the bank was returned dishonoured.
(vii) Bought furniture for office use by cheque for Rs. 18,000.
(viii) Sold goods to Kaushal of the list price of Rs. 12,500 less 20% trade discount and 2%cash discount and paid 40%by cheque.
(ix) Sold goods to Kaushal of the list price of Rs. 1,25,000 less 20% trade discount and received data cheque under a cash discount of 2%

Answer 1

Journal
$$\begin{array}{ccccc}\text{Date}& \text{Particular}& \text{LF}& \text{Amt. (Dr)}& \text{Amt.(Cr)}\\ 2016& & & & \\ \left(i\right)& \text{Bank A/c}\text{Dr}& & 10,000& \\ & \text{To cash A/c}& & & 10,000\\ & \text{(Being amount deposited in PNB)}& & & \\ & \underset{–}{}& & & \\ \left(ii\right)& \text{Bank A/c}\text{Dr}& & 50,000& \\ & \text{To Cash A/c}& & & 50,000\\ & \text{(Being amount deposited into bank)}& & & \\ & \underset{–}{}& & & \\ \left(iii\right)& \text{Investement A/c}(5,000+100)(5,000\times 2\%)\text{Dr}& & 5,100& \\ & \text{to bank A/c}& & & 5,100\\ & \text{(Being investment in shares of Birla Ltd.)}& & & \\ & \underset{–}{}& & & \\ \left(iv\right)& \text{Bank A/c}\text{Dr}& & 1,56,000& \\ & \text{Discount allowed A/c}\text{Dr}& & 4,000& \\ & \text{To John}& & & 1,60,000\\ & \text{(Being cheque recived from John and allowed him dis)}& & & \\ & \underset{–}{}& & & \\ \left(v\right)& \text{Smith}\text{Dr}& & 1,80,000& \\ & \text{To Bank A/c}& & & 1,78,000\\ & \text{To Discount Received A/c}& & & 2,000\\ & \text{(Being cheque issued to smith in full settlement of his dues)}& & & \\ & \underset{–}{}& & & \\ \left(vi\right)& \text{Customer A/c}\text{Dr}& & 5,000& \\ & \text{To Bank A/c}& & & 5,000\\ & \text{(Being cheque deposited into bank Dishonoured)}& & & \\ & \underset{–}{}& & & \\ \left(vii\right)& \text{Furniture A/c}\text{Dr}& & 18,000& \\ & \text{To Bank A/c}& & & 18,000\\ & \text{(Being furniture bught and paid by cheque)}& & & \\ & \underset{–}{}& & & \\ \left(viii\right)& \text{Kaushal}\text{Dr}& & 10,000& \\ & \text{To Sales A/c}& & & 10,000\\ & \text{(Being goods sold to Kaushal at a trade discount of 20\%)}& & & \\ & \underset{–}{}& & & \\ & \text{Bank A/c (W.N.1)}\text{Dr}& & 3,920& \\ & \text{Discount Allowed A/c}\text{Dr}& & 80& \\ & \text{To Kaushal}& & & 4,000\\ & \text{(Being 40\% payment made by kaushal under a cash discount of 2\%)}& & & \\ & \underset{–}{}& & & \\ \left(ix\right)& \text{Bank A/c(W.N.2)}\text{Dr}& & 98,000& \\ & \text{Discount allowed A/c}\text{Dr}& & 2,000& \\ & \text{To Sales A/c}& & & 1,00,000\\ & \text{(Being goods sold against a current dated cheque at a trade dis 10\%)}& & & \\ & \text{Total}& & 5,42,100& 5,42,100\end{array}$$
Working Note 1
$$\begin{array}{cc}(40\%ofRs.10,000)& 4,000\\ (-)\text{Cash discount}[2\%ofRs.4,000]& \underset{–}{80}\\ \text{Net payment made}& \underset{–}{3,920}\end{array}$$
Working Note 2
$$\begin{array}{cc}\text{List Price}& 1,25,000\\ (-)\text{trde Discount}\left[20\%\right]& \underset{–}{25,000}\\ \text{Cash discount (2\%)}& 1,00,000\\ & \underset{–}{2,000}\\ & \underset{–}{98,000}\end{array}$$
(viii) Income received in Advance or Unearned Income Income received in advance is the income received but not earned during the accounting period. It is a liability for the firm.
$$\begin{array}{c}\text{Concerned Income A/c}Dr\\ \text{To Income Received in advance A/c}\end{array}$$