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Question

Journalise the following transactions in the Journal of Navin Gupta & Sons.:-
1. Out of Insurance premium paid this year, ₹ 15,000 is related to next year.
2. Credit purchases from Ram & Co. for ₹ 50,000. Cash discount will be received at 5% on payment of bill within 10 days.
3. Cash paid to Ram & Co. and discount availed of.
4. Paid Income Tax ₹ 20,000 by cheque.
5. Goods costing ₹ 2,00,000 sold for cash at a profit of 10%.
6. Purchased iron safe for ₹ 2,00,000 filing cabinet for ₹ 50,000 and Computer for ₹ 1,00,000.

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Solution

Journal
In the Books of Sh. Navin Gupta
Date Particulars L.F. Debit Amount (₹) Credit Amount (₹)
1) Prepaid Insurance A/c Dr. 15,000
To Insurance A/c
15,000
(Prepaid insurance recorded)
2) Purchases A/c Dr. 50,000
To Ram & Co.
50,000
(Goods purchased on credit from Ram & Co.)
3) Ram & Co. Dr. 50,000
To Cash A/c
47,500
To Discount Received A/c
2,500
(Cash paid to Ram & Co. in full settlement)
4) Drawings A/c Dr. 20,000
To Cash A/c
20,000
(Paid income tax)
5) Cash A/c Dr. 2,20,000
To Sales A/c
2,20,000
(Goods sold for cash including profit of 10%)
6) Office Equipment A/c Dr. 3,50,000
To Cash A/c
3,50,000
(Office equipment purchased)
TOTAL 7,05,000 7,05,000

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