1 Mohan started business with cash 20000, furniture 10000, vehicle 40000 2 He took a premises on - Accountancy - Recording of Transactions - II

Question

1 Mohan started business with cash 20000, furniture 10000, vehicle
40000
2 He took a premises on hire for office and paid as advance rent
15000
3 He brought goods on credit from ram 30000
4 He sold half of the goods at a profit of 25% on selling price to
deepak
goods distributed as a free sample 2000
5 He withdraw for personal use goods 2500 and cash 1500
6 Rent for first month adjusted 5000
7 He sold remaining goods for cash 9000
8 Paid to Ram 10000

Jayati Jawa · Accepted Answer

Dear Student,

The solution to your query is provided below:

Journal

Date
Particulars
L F
Debit
Amount
(Rs)
Credit
Amount
(Rs)

1
Cash A/c
Dr

20,000

Furniture A/c
Dr

10,000

Vehicle A/c
Dr

40,000

To Capital A/c

70,000

(Started business with cash, furniture and
vehicle)

2
Pre-paid Rent A/c
Dr

15,000

To Cash A/c

15,000

(Paid rent in advance)

3
Purchases A/c
Dr

30,000

To Ram’s A/c

30,000

(Purchased goods from Ram on
credit)

4
Deepak’s A/c
Dr

20,000

To Sales A/c
(WN)

20,000

(Sold 50% of goods at 25% profit on selling
price )

Advertising A/c
Dr

2,000

To Purchases A/c

2,000

(Distributed free samples)

5
Drawings A/c
Dr

4,000

To Cash A/c

1,500

To Purchases A/c

2,500

(Withdrew goods and cash for personal
use)

6
Rent A/c
Dr

5,000

To Pre-paid Rent A/c

5,000

(Rent for first month
adjusted)

7
Cash A/c
Dr

9,000

To Sales A/c

9,000

(Goods sold)

8
Ram’s A/c
Dr

10,000

To Cash A/c

10,000

(Paid to Ram)

Working Note:
50% of Goods purchased = 50% of 30,000 = Rs 15,000Profit = 25% on Selling PriceLet Selling price be 'x'Profit = x4Cost + Profit =Selling Price15,000 + x4 =xx = Rs 20,000

Hope this answers your query
Keep posting for further doubts!!

Journal
Date	Particulars		L.F.	Debit Amount (Rs)	Credit Amount (Rs)

1.	Cash A/c	Dr.		20,000
	Furniture A/c	Dr.		10,000
	Vehicle A/c	Dr.		40,000
	To Capital A/c				70,000
	(Started business with cash, furniture and vehicle)

2.	Pre-paid Rent A/c	Dr.		15,000
	To Cash A/c				15,000
	(Paid rent in advance)

3.	Purchases A/c	Dr.		30,000
	To Ram’s A/c				30,000
	(Purchased goods from Ram on credit)

4.	Deepak’s A/c	Dr.		20,000
	To Sales A/c (WN)				20,000
	(Sold 50% of goods at 25% profit on selling price )

	Advertising A/c	Dr.		2,000
	To Purchases A/c				2,000
	(Distributed free samples)

5.	Drawings A/c	Dr.		4,000
	To Cash A/c				1,500
	To Purchases A/c				2,500
	(Withdrew goods and cash for personal use)

6.	Rent A/c	Dr.		5,000
	To Pre-paid Rent A/c				5,000
	(Rent for first month adjusted)

7.	Cash A/c	Dr.		9,000
	To Sales A/c				9,000
	(Goods sold)

8.	Ram’s A/c	Dr.		10,000
	To Cash A/c				10,000
	(Paid to Ram)