Question

Prepare two column cash book from the following transactions of M/s Raj Mohan for the month of April, 2016. Also prepare any five related ledger accounts and pass journal entries related to discount received and discount allowed.

$\begin{array}{ccc}2016& \text{Particular}& \text{Amt(Rs)}\\ \text{Apr 1}& \text{Cash in hand}& 70,000\\ & \text{Bank overdraft}& 66,000\\ \text{Apr 2}& \text{Cash Purchases Rs 8,000 less trade discount @}10\%& \\ \text{Apr 3}& \text{Sold goods to Raja on credit}& 4,000\\ & \text{Purchased goods on credit from Rajesh}& 8,000\\ \text{Apr 4}& \text{Wages paid}& 7,000\\ \text{Apr 5}& \text{Cash sales}& 85,000\\ \text{Apr 7}& \text{Purchased goods from Manisha for Rs 61,250 paid by cheque in full settlement}& 60,000\\ \text{Apr 9}& \text{Purchased furniture for cash}& 50,000\\ \text{Apr 10}& \text{Cash paid to Sarika discount received Rs 500}& 25,000\\ \text{Apr 11}& \text{Cheque issued to Manisha was dishonoured}& \\ \text{Apr 13}& \text{Cash sales}& 22,500\\ \text{Apr 16}& \text{Bank charged interest on overdraft}& 2,500\\ \text{Apr 18}& \text{Deposited into bank}& 35,000\\ \text{Apr 20}& \text{Paid telephone bill by cheque}& 3,000\\ \text{Apr 25}& \text{Sold goods for 1,17,500 to Sachin and received cheque in full dsettlement (Deposited}& 1,15,000\\ & \text{same day)}& \\ \text{Apr 27}& \text{Paid rent}& 4,000\\ \text{Apr 29}& \text{Drew cash for personal use}& 5,000\\ \text{Apr 29}& \text{Paid electricity bill in cash}& 27,000\\ \text{Apr 30}& \text{Paid salary}& 10,000\\ \text{Apr 30}& \text{Interest collected by bank}& 12,500\end{array}$

Answer 1

Note: Trade discount is not recorded separately in the books of accounts. Net amount Rs. 8,000 - Rs.800 = Rs. 7,200 is credited to cash account and debited to purchase account. Transactions of 3rd April are not recorded being credit transactions.