Question

Pass entries for the following:

(a) Out of Insurance premium paid this year. t 1,500 related to next year.

(b) Goods costing 20,000 sold to Manoj at a profit of 20 $\%$ on cost less 10$\%$ trade discount.

(c) Goods worth 2,500 and cash 500 were given away as charity.

Answer 1

Journal entries

$\begin{array}{ccccc}\text{Date}& \text{Particulars}& \text{L.F.}& \text{Amount}& \text{Amount}\\ & & & \text{Dr.(Rs)}& \text{Cr.(Rs)}\\ \text{(a)}& \text{Prepaid Insurance A/c}\text{Dr}.& & 1,500& \\ & \text{To Insurance A/c}& & & 1,500\\ & \underset{–}{\text{(Being part of insurance related to next year)}}& & & \\ \text{(b)}& \text{Manoj}\text{Dr}.& 21,600& & \\ & \text{To Sales A/c}& & & 21,600\\ & \underset{–}{\text{(Being goods sold to Manoj on credit)}}& & & \\ \text{(c)}& \text{Charity A/c}\text{Dr}.& & 3,000& \\ & \text{To Purchases A/c}& & & 2,500\\ & \text{To Cash A/c}& & & 500\\ & \text{(Being goods and cash given as charity)}& & & \end{array}$