Mr Rajesh Gupta Had 1000 shares of Reliance Industries Ltd Of which Rs 10 each In - Accountancy - Financial Statements - II

Question

Mr Rajesh Gupta Had 1000 shares of Reliance Industries Ltd Of which
Rs 10 each In March 2016, he sold his shares @rs 9800 each and
decided to set up a manufacturing business of room coolers on
1st April 2016 under the name of M/S Supreme cooler He
decided that all transactions should be made through bank and
deposited the whole money into Axis Bank Ltd He purchased Land and
Building for Rs 4,00,000, Plant and machinery Rs 3,50,000,
Furniture Rs50,000, Stock Rs90,000 He later approached his banker
for a loan to meet the working capital requirement Bank advanced
loan amounting to rs 4,00,000 @10% per annum His transactions for
the year ending 31st March 2017 were as follows:
Total Purchase(Rs 4,10,000 in cash) 12,40,000
Total Sales(Rs 5,25,000 in cash) 20,50,000
Wages 2,30,000
Carriage 20,500
Power and Lighting 15,500
Salary of staff and manager 1,25,000
Postage 4,200
Printing and Stationary 3,800
Advertising 16,700
Received from Debtors 12,10,000
Insurance Premium 12, 100
Conveyance 13,200
Paid to Creditors 6,50,000
Drawing during the year @Rs 5,000 pm 60,000
You are required to:

Journalize these transactions and post them into ledger
accounts
Draw a Trial Balance
Prepare Profit and Loss Account for the year ending
31st March 2017 and Balance sheet as on the date after
considering the following adjustments:

Closing stock was Rs 50,000
Bad Debts Rs 10,000 to be written off and a provision for
doubtful debt to be created to the extent of 10% on debtors
Prepaid salaries were rs 25,000
Outstanding wages amounted to Rs20,000
Stock worth Rs20,000 was lost by fire, insurance company
admitted a claim of Rs 18,000
Rs 2000 included in conveyance was spent on advertising

Neha Chopra · Accepted Answer

Dear
Student

Journal in the books
of Supreme Coolers

Date
Particulars

Debit
Credit

01-04-16
Bank
A/c
Dr
9,800,000

To Capital
A/c

9,800,000

(Being Capital
introduced in the business)

Land and
Building
Dr
400,000

Plant and Machinery
A/c
Dr
350,000

Furniture
A/c
Dr
50,000

Stock
A/c
Dr
90,000

To Bank
A/c

890,000

(Being Assets
purchased)

Bank
A/c
Dr
400,000

To Bank Loan
A/c

400,000

(Being Bank loan
taken)

During the
Year

Purchase
A/c
Dr
1,240,000

To Bank
A/c

410,000

To Creditors
A/c

830,000

(Being Purchases
made)

Cash
A/c
Dr
525,000

Debtors
A/c
Dr
1,525,000

To Sales
A/c

2,050,000

(Being Sales
made)

Wages
Dr
230,000

Carriage
Dr
20,500

Power and
Lighting
Dr
15,500

Salary
To staff and
Manager
Dr
125,000

Postage
Dr
4,200

Printing and
Stationery
Dr
3,800

Advertising
Dr
16,700

Insurance
Premium
Dr
12,100

Conveyance
Dr
13,200

Drawings
Dr
60,000

To Bank
A/c

501,000

Bank
A/c
Dr
1,210,000

To Debtors
A/c

1,210,000

(Being Amt received
from debtors)

Creditors
A/c
Dr
650,000

To Bank
A/c

650,000

(Being Amt paid to
creditors)

You have posted a full
project, Above are journal entries for all the
transactions, From these journal entries I would request you to
prepare ledger and trial balance as it requires only posting in
relevant accounts, In case of any query you can get back to us and
we would help you at the earliest

Please get back to us for any query
Keep posting
Regards

Journal in the books of Supreme Coolers
Date	Particulars		Debit	Credit
01-04-16	Bank A/c	Dr.	9,800,000
	To Capital A/c			9,800,000
	(Being Capital introduced in the business)

	Land and Building	Dr.	400,000
	Plant and Machinery A/c	Dr.	350,000
	Furniture A/c	Dr.	50,000
	Stock A/c	Dr.	90,000
	To Bank A/c			890,000
	(Being Assets purchased)

	Bank A/c	Dr.	400,000
	To Bank Loan A/c			400,000
	(Being Bank loan taken)

During the Year

	Purchase A/c	Dr.	1,240,000
	To Bank A/c			410,000
	To Creditors A/c			830,000
	(Being Purchases made)

	Cash A/c	Dr.	525,000
	Debtors A/c	Dr.	1,525,000
	To Sales A/c			2,050,000
	(Being Sales made)

	Wages	Dr.	230,000
	Carriage	Dr.	20,500
	Power and Lighting	Dr.	15,500
	Salary To staff and Manager	Dr.	125,000
	Postage	Dr.	4,200
	Printing and Stationery	Dr.	3,800
	Advertising	Dr.	16,700
	Insurance Premium	Dr.	12,100
	Conveyance	Dr.	13,200
	Drawings	Dr.	60,000
	To Bank A/c			501,000


	Bank A/c	Dr.	1,210,000
	To Debtors A/c			1,210,000
	(Being Amt received from debtors)

	Creditors A/c	Dr.	650,000
	To Bank A/c			650,000
	(Being Amt paid to creditors)