On 01 January, 2013 Mr Rupesh Gorai decided to open a computer training center in Chirkunda, District Dhanbad, State - Accountancy -

Question

On 01 January, 2013 Mr Rupesh Gorai decided to open a computer
training center in Chirkunda, District Dhanbad, State Jharkhand He
purchased a Commercial Complex measuring 300 sq ft carped area at a
cost of Rs 3,50,000 and decided to invest Rs 2,50,000 as further
capital in the proposed business
He approached SBI, Chirkunda for loan which agreed to provide
80% loan of the cost of computers He bought 30 computers of HCL
costing Rs 25000 each He paid Rs 1,50,000 and SBI Chirkunda
financed the remaining 80% amount of Rs 6,00,000 @ 10% p a The loan
was payable in four annual installment along with interest due
The transaction during the year:-
Particular
Amount
Purchase Furniture
Fees received from student
Brought computer stationery
Sale of Computer
Wages Paid
Salaries Paid
Electricity Charges
Advertisement
Postage and Call
General Expenses
Insurance Premium
Bought Pointer Machine
40000
590000
110000
160000
90000
125000
47500
22000
9500
60000
4600
30000
He withdrew Rs 12,000 per month on drawing and rapid the annual
installment of bank loan along with interest due on 31st
December, 2013
Assume all transaction took place through SBI, Chirkunda You are
required to
1 Journalize the transactions after considering the following
information
a Stock of Computer Stationary Rs 19,500
b Depreciate building by 5% and computer and furniture @ 10% p
a
c Salary Unpaid Rs 9,000
d Advertisement include unused material worth Rs 4,000
e Insurance prepaid Rs 2,000
2 Post them into ledger and prepare trial balance
3 Prepare financial statement for year ending 31st
December, 2013 i e
a Trading A/c
b Profit and Loss A/c
c Balancesheet
4 Mr Rupesh Gorai wishes to expand his business further So, he
approached his banker for loan What ratio should his banker
consider before providing loan considering that similar Firms earn
58% as gross profit and 23% as net profit

Neha Chopra · Accepted Answer

Dear
Student

Journal

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

Bank A/c
Dr

3,50,000

To Capital A/c

3 50
000

(Being Capital introduced for purchase of Commercial Complex
)

Commercial Complex A/c
Dr

3,50,000

To Bank A/c

3 50
000

(Being purchase of Commercial Complex)

Bank A/c
Dr

2,50,000

To Capital A/c

2,50,000

(Being Further Capital introduced for business)

Bank A/c
Dr

6,00,000

To Sbi Chirkunda Loan A/c

6,00,000

(Being loan taken for purchase of computers)

Computer A/c
Dr

7,50,000

To Bank A/c

7,50,000

(Being Purchase of 25 Computers 80% of which is financed by
bank)

Furniture A/c
Dr

40,000

To Bank A/c

40,000

(Being Furniture Purchased)

Bank A/c
Dr

5,90,000

To Fees Received A/c

5,90,000

(Being Fees Received From Student)

Computer Stationery A/c
Dr

1,10,000

To Bank A/c

1,10,000

(Brought Stock of computer Stationery)

Bank A/c
Dr

1,60,000

Loss on Sale of Computer A/c
Dr

20,000

To Computer A/c

1,80,000

(Being 8 Computers sold *Considered after charging depreciation @
10%)

Wages A/c
Dr

90,000

To Bank A/c

90,000

(Being Wages Paid)

Salary A/c
Dr

1,34,000

To Bank A/c

1,25,000

To Salary Outstanding A/c

9,000

(Being Salary Paid and 9,000/- remain unpaid on 31
Dec)

Electricity Charges A/c
Dr

47,500

To Bank A/c

47,500

(Being Electricity charges paid)

Advertisment Expenses
Dr

18,000

Unused Material A/c
Dr

4,000

To Bank A/c

22,000

(Being Advertisment Expenses Paid)

Postage and Call A/c
Dr

9,500

To Bank A/c

9,500

(Being postage and call expenses paid)

General Expenses A/c
Dr

60,000

To Bank A/c

60,000

(Being General Expenses Paid)

Insurance Premium A/c
Dr

2,600

Prepaid Insurance A/c
Dr

2,000

To Bank A/c

4,600

(Being insurance premium paid and prepaid insurance
booked)

Pointer Machine A/c
Dr

30,000

To Bank A/c

30,000

(Being Pointer machine purchased)

Depreciation A/c
Dr

96,500

To Computer A/c

75,000

To Furmiture A/c

4,000

To Commercial Complex A/c

17,500

(Being Depreciation charged on Computer furniture and Commercial
Complex)

Interest on Loan A/c
Dr

60,000

To SBI Chirkunda Loan A/c

60,000

(Being Interest Due on Loan )

SBI Chirkunda Loan A/c
Dr

2,10,000

To Bank A/c

2,10,000

(Being 1st installment of loan paid with
interest)

Stationery Expense A/c
Dr

90,500

To Computer Stationery A/c

90,500

(Being Stationery utilised in current year , as 19,500 worth
stationery is in stock)

Please note that :

No information was given
regarding sale of computers , so it is assumed that 8 computers
were sold on 31-Dec
As in the question it is
written that Journal entries are to be prepared after considering
adjustments , therefore all the adjustments are done in the initial
entry only and not separate entry is passed for
adjustments

Student Please note that after preparing the above entries all you
need to do is only post the balances into their ledger accounts and
then prepare Trial Balance and Trading and Profit and Loss
account
Considering that all adjustments are already factored in the above
journal entries , their would be no problem in posting and
preparing the required statements if you try
However get back to us if you have any doubt in any point

Keep Posting
Regards

Journal
Date	Particulars		L.F.	Debit Amount (Rs)	Credit Amount (Rs)
	Bank A/c	Dr.		3,50,000
	To Capital A/c				3.50.000
	(Being Capital introduced for purchase of Commercial Complex )

	Commercial Complex A/c	Dr.		3,50,000
	To Bank A/c				3.50.000
	(Being purchase of Commercial Complex)

	Bank A/c	Dr.		2,50,000
	To Capital A/c				2,50,000
	(Being Further Capital introduced for business)

	Bank A/c	Dr.		6,00,000
	To Sbi Chirkunda Loan A/c				6,00,000
	(Being loan taken for purchase of computers)

	Computer A/c	Dr.		7,50,000
	To Bank A/c				7,50,000
	(Being Purchase of 25 Computers 80% of which is financed by bank)

	Furniture A/c	Dr.		40,000
	To Bank A/c				40,000
	(Being Furniture Purchased)

	Bank A/c	Dr.		5,90,000
	To Fees Received A/c				5,90,000
	(Being Fees Received From Student)

	Computer Stationery A/c	Dr.		1,10,000
	To Bank A/c				1,10,000
	(Brought Stock of computer Stationery)

	Bank A/c	Dr.		1,60,000
	Loss on Sale of Computer A/c	Dr.		20,000
	To Computer A/c				1,80,000
	(Being 8 Computers sold *Considered after charging depreciation @ 10%)

	Wages A/c	Dr.		90,000
	To Bank A/c				90,000
	(Being Wages Paid)

	Salary A/c	Dr.		1,34,000
	To Bank A/c				1,25,000
	To Salary Outstanding A/c				9,000
	(Being Salary Paid and 9,000/- remain unpaid on 31 Dec)

	Electricity Charges A/c	Dr.		47,500
	To Bank A/c				47,500
	(Being Electricity charges paid)

	Advertisment Expenses	Dr.		18,000
	Unused Material A/c	Dr.		4,000
	To Bank A/c				22,000
	(Being Advertisment Expenses Paid)

	Postage and Call A/c	Dr.		9,500
	To Bank A/c				9,500
	(Being postage and call expenses paid)

	General Expenses A/c	Dr.		60,000
	To Bank A/c				60,000
	(Being General Expenses Paid)

	Insurance Premium A/c	Dr.		2,600
	Prepaid Insurance A/c	Dr.		2,000
	To Bank A/c				4,600
	(Being insurance premium paid and prepaid insurance booked)

	Pointer Machine A/c	Dr.		30,000
	To Bank A/c				30,000
	(Being Pointer machine purchased)

	Depreciation A/c	Dr.		96,500
	To Computer A/c				75,000
	To Furmiture A/c				4,000
	To Commercial Complex A/c				17,500
	(Being Depreciation charged on Computer furniture and Commercial Complex)

	Interest on Loan A/c	Dr.		60,000
	To SBI Chirkunda Loan A/c				60,000
	(Being Interest Due on Loan )

	SBI Chirkunda Loan A/c	Dr.		2,10,000
	To Bank A/c				2,10,000
	(Being 1^st installment of loan paid with interest)

	Stationery Expense A/c	Dr.		90,500
	To Computer Stationery A/c				90,500
	(Being Stationery utilised in current year , as 19,500 worth stationery is in stock)