1 Ram started business with cash 50000 and goods 30000 2 Ram took a loan from Keshav - Accountancy - Recording of Transactions - II

Question

1 Ram started business with cash 50000 and goods 30000
2 Ram took a loan from Keshav 25000
3 Sold 40% of the goods at a mark up of 25% on cost for cash
4 Paid wages 2000
5 Rent outstanding 3000
6 Sold remaining goods to Vijay at a profit of 20% on selling
price
7 Interest due on loan 2500
8 Vijay returned 50% of the goods sold to him
9 Paid to keshav half amount of the loan together with full
interest

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

50,000

Purchases A/c
Dr

30,000

To Capital A/c

80,000

(Started business with cash)

2
Cash A/c
Dr

25,000

To Loan from Keshav A/c

25,000

(Took loan from Keshav)

3
Cash A/c
(WN1)
Dr

15,000

To Sales A/c

15,000

(Sold 40% of goods purchased at 25%
profit)

4
Wages A/c
Dr

2,000

To Cash A/c

2,000

(Paid wages in cash)

5
Rent A/c
Dr

3,000

To Outstanding Rent A/c

3,000

(Rent outstanding)

6
Vijay’s A/c
Dr

22,500

To Sales A/c
(WN2)

22,500

(Sold remaining 60% of the goods at 20% on
selling price)

7
Interest A/c
Dr

2,500

To Outstanding Interest on Loan from Keshav
A/c

2,500

(Interest on Keshav’s loan is
outstanding)

8
Sales Return A/c
Dr

11,250

To Vijay’s A/c

11,250

(Vijay returned 50% of the goods sold to
him)

9
Loan from Keshav A/c
Dr

12,500

Outstanding Interest on Loan from Keshav
A/c

2,500

To Cash A/c

15,000

(Paid to Keshav, 50% of the loan and
outstanding interest)

Working Notes:

WN1 Calculation of amount of
sales

40% of Goods = 40% of 30,000 = Rs 12,000Profit = on Cost = 25% = 25% of 12,000 = Rs 3,000Therefore, Sales = Cost of Goods + Profit = 12,000 + 3,000 = Rs 15,000

WN2 Calculation of amount of sales to
Vijay

60% of Goods = 60% of 30,000 = Rs 18,000Profit = 20% on Selling PriceLet Selling price be 'x'Profit = x5Cost + Profit = Selling Price18,000 + x5 = xx = Rs 22,500

â€‹â€‹Hope this answers your
query
Keep postiong!!

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

1.	Cash A/c	Dr.		50,000
	Purchases A/c	Dr.		30,000
	To Capital A/c				80,000
	(Started business with cash)

2.	Cash A/c	Dr.		25,000
	To Loan from Keshav A/c				25,000
	(Took loan from Keshav)

3.	Cash A/c (WN1)	Dr.		15,000
	To Sales A/c				15,000
	(Sold 40% of goods purchased at 25% profit)

4.	Wages A/c	Dr.		2,000
	To Cash A/c				2,000
	(Paid wages in cash)

5.	Rent A/c	Dr.		3,000
	To Outstanding Rent A/c				3,000
	(Rent outstanding)

6.	Vijay’s A/c	Dr.		22,500
	To Sales A/c (WN2)				22,500
	(Sold remaining 60% of the goods at 20% on selling price)

7.	Interest A/c	Dr.		2,500
	To Outstanding Interest on Loan from Keshav A/c				2,500
	(Interest on Keshav’s loan is outstanding)

8.	Sales Return A/c	Dr.		11,250
	To Vijay’s A/c				11,250
	(Vijay returned 50% of the goods sold to him)

9.	Loan from Keshav A/c	Dr.		12,500
	Outstanding Interest on Loan from Keshav A/c			2,500
	To Cash A/c				15,000
	(Paid to Keshav, 50% of the loan and outstanding interest)