Accounting Cycle - Problems and Solutions

Problem - 1

Journalise the following transactions, post them into ledger and balance the accounts.Also prepare a trial balance.

Oct. 1
2
4
5
6
7
8
9
10
12
14

16
17
18
19
20
22

25
28
31
Manohar commenced business
Purchased goods from Ravi
Sold goods to Gopi
Cash purchases
Cash paid into bank
Paid for salaries
Sold for cash
Bought furniture paid by cheque
Goods returned to Ravi
Bought goods from Sobhan
Cash paid to Ravi
Discount received
Goods returned from Gopi
Deposited cash into bank
Sold goods to Bhuwan
Paid advertisement by cheque
Paid cash to Sobhan
Cash received from Gopi
Discount allowed to him
Received interest through cheque
Goods taken by Manohar for own use
Paid for rent
1,00,000
10,000
20,000
20,000
10,000
5,000
20,000
2,000
2,000
10,000
7,800
200
3,000
10,000
12,000
1,000
5,000
6,900
100
2,000
1,000
2,000

Solution

Journal in the books of Mr. Manohar
for the period from Oct. 1st, _5 to Oct. 31th, _5
Date V/R
No.
Particulars L/F Amount
(Dr)
Amount
(Cr)
Oct. 1st Cash a/c
To Capital a/c
Dr


1,00,000
1,00,000
[Being the amount of cash received from Mr. Manohar, the proprietor as his capital contribution vide receipt no:__ dated:__]
2nd Purchases a/c
To Ravi a/c
Dr


10,000
10,000
[Being the value stock of goods purchased from Mr. Ravi on credit vide bill no:__ dated:__]
4th Gopi a/c
To Sales a/c
Dr


20,000
20,000
[Being the value of stock sold to MR. Gopi on credit vide bill no:___ dated:__]
5th Purchases a/c
To Cash a/c
Dr


20,000
20,000
[Being the value of stock purchased for cash vide bill no:___ dated:__]
6th Bank a/c
To Cash a/c
Dr


10,000
10,000
[Being the amount of cash deposited into bank vide bill no:___ dated:__]
7th Salaries a/c
To Cash a/c
Dr


5,000
5,000
[Being the amount of cash paid for salaries vide voucher no:___ dated:__]
8th Cash a/c
To Sales a/c
Dr


20,000
20,000
[Being the value of stock sold for cash vide bill no:___ dated:__]
9th Furniture a/c
To Bank a/c
Dr


2,000
2,000
[Being the value of furniture purchased vide cheque no:___ dated:__]
10th Ravi a/c
To Purchase Returns a/c
Dr


2,000
2,000
[Being the value of stock returned to MR. Ravi vide Debit note no:___ dated:__]
12th Purchases a/c
To Shoban a/c
Dr


10,000
10,000
[Being the value stock of goods purchased from Mr. Shoban vide bill no:___ dated:__]
14th Ravi a/c
To Cash a/c
To Discount Received a/c
Dr



8,000
7,800
200
[Being the amount of cash paid to Mr. Ravi after receiving a discount of 200 vide Vocher no:___ dated:__]
16th Sales Returns a/c
To Gopi a/c
Dr


3,000
3,000
[Being the value of stock returned by Mr. Gopi vide credit note no:___ dated:__]
17th Bank a/c
To Cash a/c
Dr


10,000
10,000
[Being the amount of cash deposited into bank vide voucher no:___ dated:__]
18th Bhuwan a/c
To Sales a/c
Dr


12,000
12,000
[Being the value of stock sold to MR. Bhuwan on credit vide bill no:___ dated:__]
19th Advertisement a/c
To Bank a/c
Dr


1,000
1,000
[Being the amount paid for advertisement vide cheque no:___ dated:__]
20th Shoban a/c
To Cash a/c
Dr


5,000
5,000
[Being the amount paid to shoban vide voucher no:___ dated:__]
22nd Cash a/c
Discount Allowed a/c
To Gopi a/c
Dr
Dr



6,900
100


7,000
[Being the amount of cash received from Mr. Gopi after allowing a discount of 100 vide receipt no:___ dated:__]
25th Bank a/c
To Interest a/c
Dr


2,000
2,000
[Being the amount of cheque no:___ dated:__ received as interest]
28th Drawings a/c
To Purchases a/c
Dr


1,000
1,000
[Being the value of stock taken form the business for domestic use vide bill no:___ dated:__]
31st Rent a/c
To Cash a/c
Dr


2,000
2,000
[Being the amount of cash paid for rent vide voucher no:___ dated:__]

General Ledger
[Books of Mr.Manohar]

Cash a/c
Dr Cr
Date Particulars J/F Amount Date Particulars J/F Amount
01/10/_5
08/10/_5
22/10/_5
To Capital a/c
To Sales a/c
To Gopi a/c


1,00,000
20,000
6,900
05/10/_5
06/10/_5
07/10/_5
14/10/_5
17/10/_5
20/10/_5
31/10/_5
31/10/_5
By Purchases a/c
By Bank a/c
By Salaries a/c
By Ravi a/c
By Bank a/c
By Shoban a/c
By Rent a/c
By Balance c/d







20,000
10,000
5,000
7,800
10,000
5,000
2,000
67,100
tl 1,26,900 tl 1,26,900
01/11/_5 To Balance b/d 67,100
Capital a/c
Dr Cr
Date Particulars J/F Amount Date Particulars J/F Amount
31/10/_5 To Balance c/d 1,00,000 01/10/_5 By Cash a/c 1,00,000
tl 1,00,000 tl 1,00,000
01/11/_5 By Balance b/d 1,00,000
Purchases a/c
Dr Cr
Date Particulars J/F Amount Date Particulars J/F Amount
02/10/_5
05/10/_5
12/10/_5
To Ravi a/c
To Cash a/c
To Shoban a/c


10,000
20,000
10,000
28/10/_5
31/10/_5
By Drawings a/c
By Balance c/d

1,000
39,000
tl 40,000 tl 40,000
01/11/_5 To Balance b/d 39,000
Ravi a/c
Dr Cr
Date Particulars J/F Amount Date Particulars J/F Amount
10/10/_5
14/10/_5
14/10/_5
To Purchase Returns a/c
To Cash a/c
To Discount Received a/c


2,000
7,800
200
02/10/_5 By Purchases a/c 10,000
tl 10,000 tl 10,000
Gopi a/c
Dr Cr
Date Particulars J/F Amount Date Particulars J/F Amount
04/10/_5 To Sales a/c 20,000 16/10/_5
22/10/_5
22/10/_5
31/10/_5
By Sales Returns a/c
By Cash a/c
By Discount Allowed a/c
By Balance c/d



3,000
6,900
100
10,000
tl 20,000 tl 20,000
01/11/_5 To Balance b/d 10,000
Sales a/c
Dr Cr
Date Particulars J/F Amount Date Particulars J/F Amount
31/10/_5 To Balance c/d 52,000 04/10/_5
08/10/_5
18/10/_5
By Gopi a/c
By Cash a/c
By Bhuwan a/c


20,000
20,000
12,000
tl 52,000 tl 52,000
01/11/_5 By Balance b/d 52,000
Bank a/c
Dr Cr
Date Particulars J/F Amount Date Particulars J/F Amount
06/10/_5
17/10/_5
25/10/_5
To Cash a/c
To Cash a/c
To Interest a/c


10,000
10,000
2,000
09/10/_5
19/10/_5
31/10/_5
By Furniture a/c
By Advertisement a/c
By Balance c/d


2,000
1,000
19,000
tl 22,000 tl 22,000
01/11/_5 To Balance b/d 19,000
Salaries a/c
Dr Cr
Date Particulars J/F Amount Date Particulars J/F Amount
07/10/_5 To Cash a/c 5,000 31/10/_5 By Balance c/d 5,000
tl 5,000 tl 5,000
01/11/_5 To Balance b/d 5,000
Furniture a/c
Dr Cr
Date Particulars J/F Amount Date Particulars J/F Amount
09/10/_5 To Bank a/c 2,000 31/10/_5 By Balance c/d 2,000
tl 2,000 tl 2,000
01/11/_5 To Balance b/d 2,000
Purchase Returns a/c
Dr Cr
Date Particulars J/F Amount Date Particulars J/F Amount
31/10/_5 To Balance c/d 2,000 10/10/_5 By Ravi a/c 2,000
tl 2,000 tl 2,000
01/11/_5 By Balance b/d 2,000
Shoban a/c
Dr Cr
Date Particulars J/F Amount Date Particulars J/F Amount
20/10/_5
31/10/_5
To Cash a/c
To Balance c/d

5,000
5,000
12/10/_5 By Purchases a/c 10,000
tl 10,000 tl 10,000
01/11/_5 By Balance b/d 5,000
Discount Received a/c
Dr Cr
Date Particulars J/F Amount Date Particulars J/F Amount
31/10/_5 To Balance c/d 200 14/10/_5 By Ravi a/c 200
tl 200 tl 200
01/11/_5 By Balance b/d 200
Sales Returns a/c
Dr Cr
Date Particulars J/F Amount Date Particulars J/F Amount
16/10/_5 To Gopi a/c 3,000 31/10/_5 By Balance c/d 3,000
tl 3,000 tl 3,000
01/11/_5 To Balance b/d 3,000
Bhuwan a/c
Dr Cr
Date Particulars J/F Amount Date Particulars J/F Amount
18/10/_5 To Sales a/c 12,000 31/10/_5 By Balance c/d 12,000
tl 12,000 tl 12,000
01/11/_5 To Balance b/d 12,000
Advertisement a/c
Dr Cr
Date Particulars J/F Amount Date Particulars J/F Amount
19/10/_5 To Bank a/c 1,000 31/10/_5 By Balance c/d 1,000
tl 1,000 tl 1,000
01/11/_5 To Balance b/d 1,000
Discount Allowed a/c
Dr Cr
Date Particulars J/F Amount Date Particulars J/F Amount
22/10/_5 To Gopi a/c 100 31/10/_5 By Balance c/d 100
tl 100 tl 100
01/11/_5 To Balance b/d 100
Interest a/c
Dr Cr
Date Particulars J/F Amount Date Particulars J/F Amount
31/10/_5 To Balance c/d 2,000 25/10/_5 By Bank a/c 2,000
tl 2,000 tl 2,000
01/11/_5 By Balance b/d 2,000
Drawings a/c
Dr Cr
Date Particulars J/F Amount Date Particulars J/F Amount
28/10/_5 To Purchases a/c 1,000 31/10/_5 By Balance c/d 1,000
tl 1,000 tl 1,000
01/11/_5 To Balance b/d 1,000
Rent a/c
Dr Cr
Date Particulars J/F Amount Date Particulars J/F Amount
31/10/_5 To Cash a/c 2,000 31/10/_5 By Balance c/d 2,000
tl 2,000 tl 2,000
01/11/_5 To Balance b/d 2,000

Trial Balance
[Modern Method]

Trial Balance of Mr. Manohar as on 31/10/_5
Particulars L/F Amount
(Dr)
Amount
(Cr)
Cash a/c
Capital a/c
Purchases a/c
Ravi a/c
Gopi a/c
Sales a/c
Bank a/c
Salaries a/c
Furniture a/c
Purchase Returns a/c
Shoban a/c
Discount Received a/c
Sales Returns a/c
Bhuwan a/c
Advertisement a/c
Discount Allowed a/c
Interest a/c
Drawings a/c
Rent a/c


















67,100

39,000

10,000

19,000
5,000
2,000



3,000
12,000
1,000
100

1,000
2,000

1,00,000



52,000



2,000
5,000
200




2,000

Total 1,61,200 1,61,200

Problem - 2

Jounalise the following transactions and post them into the ledger. Also prepare a trial balance.

Nov 1



2
3
5
6
9
10
11
12
15
16
17

19
21
22

23
25
26
28
30
Venkat & Co. commenced business
with furniture 25,000,
Cash 75,000 and
goods 20,000
Sales
Purchases
Sold goods to Mahesh
Bought goods from Ramesh
Sold goods to Kesav for cash
Mahesh returned goods
Commission received
Returned goods to Ramesh
Cash deposited into bank
Bought goods from Suresh
Paid to Ramesh by cheque
Discount received
Withdrew from bank for domestic use
Sold goods to Madhav
Cash received from Mahesh
Discount allowed
Stationery expenses
Cash paid to Suresh
Cash received from Madhav
Cash deposited into bank
Paid salaries by cheque




10,000
8,000
12,000
7,000
6,000
6,000
1,000
1,500
15,000
12,000
4,000
200
3,000
9,000
4,000
100
500
3,000
5,000
10,000
3,000

Solution

Journal in the books of M/s. Venkat & Co.
for the period from Nov. 1st, _5 to Nov. 31th, _5
Date V/R
No.
Particulars L/F Amount
(Dr)
Amount
(Cr)
Oct. 1st Furniture a/c
Cash a/c
Purchases a/c
To Capital a/c
Dr
Dr
Dr




25,000
75,000
20,000



1,20,000
[Being the amount of assets brought in by M/s Venkat & Co. as their capital contribution vide receipt no:___ dated:__]
2nd Cash a/c
To Sales a/c
Dr


10,000
10,000
[Being the value of stock sold for cash vide bill no:___ dated:__]
3rd Purchases a/c
To Cash a/c
Dr


8,000
8,000
[Being the value of stock purchased for cash vide bill no:___ dated:__]
5th Mahesh a/c
To Sales a/c
Dr


12,000
12,000
[Being the value of stock sold to Mahesh vide bill no:___ dated:___]
6th Purchases a/c
To Ramesh a/c
Dr


7,000
7,000
[Being the value of stock purchased to Mr. Ramesh on credit vide bill no:___ dated:__]
9th Cash a/c
To Sales a/c
Dr


6,000
6,000
[Being the value of stock sold for cash to Kesav vide voucher no:___ dated:__]
10th Sales Returns a/c
To Mahesh a/c
Dr


6,000
6,000
[Being the value of stock returned by Mahesh vide credit note no:__ dated:__]
11th Cash a/c
To Commission a/c
Dr


1,000
1,000
[Being the amount of cash received as commission vide receipt no:____ dated:____]
12th Ramesh a/c
To Purchase Returns a/c
Dr


1,500
1,500
[Being the value of stock returned to Mr. Ramesh vide credit note no:__ dated:__]
15th Bank a/c
To Cash a/c
Dr


1,500
1,500
[Being the amount of cash deposited into bank vide bill no:___ dated:____]
16th Purchases a/c
To Suresh a/c
Dr


12,000
12,000
[Being the value of stock Purchased from Mr. Suresh vide bill no:___ dated:__]
17th Ramesh a/c
To Bank a/c
To Discount Received a/c
Dr



4,200
4,000
200
[Being the amount paid to Ramesh after receiving a discount of 200vide cheque no:___ dated:__]
19th Drawings a/c
To Bank a/c
Dr


3,000
3,000
[Being the amount of cash withdrawn from bank for domestic use vide cheque no:___ dated:__]
21th Madhav a/c
To Sales a/c
Dr


9,000
9,000
[Being the value of stock sold to Madhav on credit vide bill no:___ dated:__]
22nd Cash a/c
Discount Allowed a/c
To Mahesh a/c
Dr
Dr



4,000
100


4,100
[Being the amount of cash received from Mahesh after allowing a discount of 100 vide bill no:___ dated:__]
23rd Stationery a/c
To Cash a/c
Dr


500
500
[Being the amount of cash paid for stationery expenses vide bill no:___ dated:__]
25th Suresh a/c
To Cash a/c
Dr


3,000
3,000
[Being the amount of cash paid to Mr. Suresh vide bill no:___ dated:__]
26th Cash a/c
To Madhav a/c
Dr


5,000
5,000
[Being the amount of cash received from Mr. Madhav vide bill no:___ dated:__]
28th Bank a/c
To Cash a/c
Dr


10,000
10,000
[Being the amount of cash deposited into bank vide bill no:___ dated:____]
30th Salaries a/c
To Bank a/c
Dr


3,000
3,000
[Being the amount of cash paid for salaries vide cheque no:___ dated:____]

General Ledger
[Books of M/s. Venkat & Co.]

Furniture a/c
Dr Cr
Date Particulars J/F Amount Date Particulars J/F Amount
01/11/_5 To Capital a/c 25,000 30/11/_5 By Balance c/d 25,000
tl 25,000 tl 25,000
01/12/_5 To Balance b/d 25,000
Cash a/c
Dr Cr
Date Particulars J/F Amount Date Particulars J/F Amount
01/11/_5
02/11/_5
09/11/_5
11/11/_5
22/11/_5
26/11/_5
To Capital a/c
To Sales a/c
To Sales a/c
To Commission a/c
To Mahesh a/c
To Madhav a/c





75,000
10,000
6,000
1,000
4,000
5,000
03/11/_5
15/11/_5
23/11/_5
25/11/_5
28/11/_5
30/11/_5
By Purchases a/c
By Bank a/c
By Stationery a/c
By Suresh a/c
By Bank a/c
By Balance c/d





8,000
1,500
500
3,000
10,000
78,000
tl 1,01,000 tl 1,01,000
01/12/_5 To Balance b/d 78,000
Purchases a/c
Dr Cr
Date Particulars J/F Amount Date Particulars J/F Amount
01/11/_5
03/11/_5
06/11/_5
16/11/_5
To Capital a/c
To Cash a/c
To Ramesh a/c
To Suresh a/c



20,000
8,000
7,000
12,000
30/11/_5 By Balance c/d 47,000
tl 47,000 tl 47,000
01/12/_5 To Balance b/d 47,000
Capital a/c
Dr Cr
Date Particulars J/F Amount Date Particulars J/F Amount
30/11/_5 To Balance c/d 1,20,000 01/11/_5
01/11/_5
01/11/_5
By Furniture a/c
By Cash a/c
By Purchases a/c


25,000
75,000
20,000
tl 1,20,000 tl 1,20,000
01/12/_5 By Balance b/d 1,20,000
Sales a/c
Dr Cr
Date Particulars J/F Amount Date Particulars J/F Amount
30/11/_5 To Balance c/d 37,000 02/11/_5
05/11/_5
09/11/_5
21/11/_5
By Cash a/c
By Mahesh a/c
By Cash a/c
By Madhav a/c



10,000
12,000
6,000
9,000
tl 37,000 tl 37,000
01/12/_5 By Balance b/d 37,000
Mahesh a/c
Dr Cr
Date Particulars J/F Amount Date Particulars J/F Amount
05/11/_5 To Sales a/c 12,000 10/11/_5
22/11/_5
22/11/_5
30/11/_5
By Sales Returns a/c
By Cash a/c
By Discount Allowed a/c
By Balance c/d



6,000
4,000
100
1,900
tl 12,000 tl 12,000
01/12/_5 To Balance b/d 1,900
Ramesh a/c
Dr Cr
Date Particulars J/F Amount Date Particulars J/F Amount
12/11/_5
17/11/_5
17/11/_5
30/11/_5
To Purchase Returns a/c
To Bank a/c
To Discount Received a/c
To Balance c/d



1,500
4,000
200
1,300
06/11/_5 By Purchases a/c 7,000
tl 7,000 tl 7,000
01/12/_5 By Balance b/d 1,300
Sales Returns a/c
Dr Cr
Date Particulars J/F Amount Date Particulars J/F Amount
10/11/_5 To Mahesh a/c 6,000 30/11/_5 By Balance c/d 6,000
tl 6,000 tl 6,000
01/12/_5 To Balance b/d 6,000
Commission a/c
Dr Cr
Date Particulars J/F Amount Date Particulars J/F Amount
30/11/_5 To Balance c/d 1,000 11/11/_5 By Cash a/c 1,000
tl 1,000 tl 1,000
01/12/_5 By Balance b/d 1,000
Purchase Returns a/c
Dr Cr
Date Particulars J/F Amount Date Particulars J/F Amount
30/11/_5 To Balance c/d 1,500 12/11/_5 By Ramesh a/c 1,500
tl 1,500 tl 1,500
01/12/_5 By Balance b/d 1,500
Bank a/c
Dr Cr
Date Particulars J/F Amount Date Particulars J/F Amount
15/11/_5
28/11/_5
To Cash a/c
To Cash a/c

1,500
10,000
17/11/_5
19/11/_5
30/11/_5
30/11/_5
By Ramesh a/c
By Drawings a/c
By Salaries a/c
By Balance c/d



4,000
3,000
3,000
1,500
tl 11,500 tl 11,500
01/12/_5 To Balance b/d 1,500
Suresh a/c
Dr Cr
Date Particulars J/F Amount Date Particulars J/F Amount
25/11/_5
30/11/_5
To Cash a/c
To Balance c/d

3,000
9,000
16/11/_5 By Purchases a/c 12,000
tl 12,000 tl 12,000
01/12/_5 By Balance b/d 9,000
Discount Received a/c
Dr Cr
Date Particulars J/F Amount Date Particulars J/F Amount
30/11/_5 To Balance c/d 200 17/11/_5 By Ramesh a/c 200
tl 200 tl 200
01/12/_5 By Balance b/d 200
Drawings a/c
Dr Cr
Date Particulars J/F Amount Date Particulars J/F Amount
19/11/_5 To Bank a/c 3,000 30/11/_5 By Balance c/d 3,000
tl 3,000 tl 3,000
01/12/_5 To Balance b/d 3,000
Madhav a/c
Dr Cr
Date Particulars J/F Amount Date Particulars J/F Amount
21/11/_5 To Sales a/c 9,000 26/11/_5
30/11/_5
By Cash a/c
By Balance c/d

5,000
4,000
tl 9,000 tl 9,000
01/12/_5 To Balance b/d 4,000
Discount Allowed a/c
Dr Cr
Date Particulars J/F Amount Date Particulars J/F Amount
22/11/_5 To Mahesh a/c 100 30/11/_5 By Balance c/d 100
tl 100 tl 100
01/12/_5 To Balance b/d 100
Stationery a/c
Dr Cr
Date Particulars J/F Amount Date Particulars J/F Amount
23/11/_5 To Cash a/c 500 30/11/_5 By Balance c/d 500
tl 500 tl 500
01/12/_5 To Balance b/d 500
Salaries a/c
Dr Cr
Date Particulars J/F Amount Date Particulars J/F Amount
30/11/_5 To Bank a/c 3,000 30/11/_5 By Balance c/d 3,000
tl 3,000 tl 3,000
01/12/_5 To Balance b/d 3,000

Trial Balance
[Modern Method]

Trial Balance of M/s. Venkat & Co. as on 30/11/_5
Particulars L/F Amount
(Dr)
Amount
(Cr)
Furniture a/c
Cash a/c
Purchases a/c
Capital a/c
Sales a/c
Mahesh a/c
Ramesh a/c
Sales Returns a/c
Commission a/c
Purchase Returns a/c
Bank a/c
Suresh a/c
Discount Received a/c
Drawings a/c
Madhav a/c
Discount Allowed a/c
Stationery a/c
Salaries a/c

















25,000
78,000
47,000


1,900

6,000


1,500


3,000
4,000
100
500
3,000



1,20,000
37,000

1,300

1,000
1,500

9,000
200




Total 1,70,000 1,70,000