Ledger Account Preparation and Balancing - Illustration

Notes 18

Illustration - Problem

Journalise the following transactions (Record the following transactions in a Journal) and then post the entries into the ledger.

1. 15th June : Ibrahim a sole proprietor Commenced business with a capital of 2,00,000.
2. 17th June : Bought Furniture for cash 20,000.
3. 17th June : Paid Rent to the shop owner Mr. Murugan 5,000.
4. 18th June : Paid cash into bank 1,50,000
5. 18th June : Bought Goods for cash 10,000 from M/s Shamir Jain & Co.,
6. 18th June : Bought Goods on credit from M/s Ramdas & Brothers for 10,000.
7. 19th June : Sold goods for cash 12,000 to Mr. Naryan Tiwari
8. 20th June : Bought Machinery from M/s Boolani Machinery and paid by cheque 25,000.
9. 21st June : Sold goods on credit to Mr. Natekar for 8,000
10. 21st June : Paid weekly wages to workers 5,000
11. 24th June : Paid M/s Ramdas and Brothers by cheque 5,000
12. 24th June : Received from Mr. Natekar 2,000
13. 24th June : Received commission from M/s Orion Traders for giving a trade lead 500.

Illustration - Solution (Journal)

Journal in the books of __ for the period from __ to __
Date V/R
No. 		Particulars L/F Amount
(Dr) 		Amount
(Cr)
June 15th – Cash a/c
To Capital a/c
Dr
 –
–
 2,00,000
2,00,000
[Being the amount received from Mr. Ibrahim, the proprietor as his capital contribution]
17th – Furniture a/c
To Cash a/c
Dr
 –
–
 20,000
20,000
[Being the amount paid towards Furniture purchased]
17th – Rent Paid a/c
To Cash a/c
Dr
 –
–
 5,000
5,000
[For the amount paid towards rent for the shop for the month of May]
18th – Bank a/c
To Cash a/c
Dr
 –
–
 1,50,000
1,50,000
[For the amount of cash paid into bank]
18th – Goods/Stock a/c
To Cash a/c
Dr
 –
–
 10,000
10,000
[Being the value of stock purchased for cash]
18th – Goods/Stock a/c
To M/s Ramdas & Bros a/c
Dr
 –
–
 10,000
10,000
[Being the value of stock purchased from M/s Ramdas & Brothers, on credit]
19th – Cash a/c
To Goods/Stock a/c
Dr
 –
–
 12,000
12,000
[Being the value of stock sold for cash]
20th – Machinery a/c
To Bank a/c
Dr
 –
–
 25,000
25,000
[Being the amount paid by cheque towards purchase of machinery]
21st – Mr. Natekar a/c
To Goods/Stock a/c
Dr
 –
–
 8,000
8,000
[Being the value of stock sold on credit to Mr. Natekar]
21st – Wages paid a/c
To Cash a/c
Dr
 –
–
 5,000
5,000
[For the amount paid towards weekly wages for the workers]
24th – M/s Ramdas & Bros a/c
To Bank a/c
Dr
 –
–
 5,000
5,000
[For the amount paid by cheque to M/s Ramdas & Brothers, on account]
24th – Cash a/c
To Mr. Natekar a/c
Dr
 –
–
 2,000
2,000
[For the amount received in cash from Mr. Natekar on account]
24th – Cash a/c
To commission Received a/c
Dr
 –
–
 500
500
[For the amount received in cash from Mr. Natekar on account]

Illustration - Working Notes

By going through the above journal entries we can identify the list of ledger accounts affected by these transactions.
  • Cash a/c
  • Capital a/c
  • Furniture a/c
  • Rent Paid a/c
  • Bank a/c
  • Goods/Stock a/c
  • M/s Ramdas & Brothers a/c
  • Machinery a/c
  • Mr. Natekar a/c
  • Wages Paid a/c
  • Commission Received a/c

Illustration - Solution (Ledger)

General Ledger
[Books of Mr. Ibrahim]

Cash a/c
Dr Cr
Date Particulars J/F Amount Date Particulars J/F Amount
15/06/_5
19/06/_5
24/06/_5
24/06/_5 		To Capital a/c
To Goods/Stock a/c
To Mr. Natekar a/c
To Commission Received a/c 		–
–
–
– 		2,00,000
12,000
2,000
500 		17/06/_5
17/06/_5
18/06/_5
18/06/_5
21/06/_5 		By Furniture a/c
By Rent Paid a/c
By Bank a/c
By Goods/Stock a/c
By Wages Paid a/c 		–
–
–
–
– 		20,000
5,000
1,50,000
10,000
5,000

Sub Total

 2,14,500

25/06/_5
Sub Total
By Balance c/d
– 		1,90,000
24,500
tl 2,14,500 tl 2,14,500
25/06/_5 To Balance b/d – 24,500
Capital a/c
Dr Cr
Date Particulars J/F Amount Date Particulars J/F Amount
15/06/_5 By Cash a/c – 2,00,000

25/06/_5
Sub Total
To Balance c/d
– 		0
2,00,000
Sub Total

 2,00,000
tl 2,00,000 tl 2,00,000
25/06/_5 By Balance b/d – 2,00,000
Furniture a/c
Dr Cr
Date Particulars J/F Amount Date Particulars J/F Amount
17/06/_5 To Cash a/c – 20,000

Sub Total

 20,000

25/06/_5
Sub Total
By Balance c/d
– 		0
20,000
tl 20,000 tl 20,000
25/06/_5 To Balance b/d – 20,000
Rent Paid a/c
Dr Cr
Date Particulars J/F Amount Date Particulars J/F Amount
17/06/_5 To Cash a/c – 5,000

Sub Total

 5,000

25/06/_5
Sub Total
By Balance c/d
– 		0
5,000
tl 5,000 tl 5,000
25/06/_5 To Balance b/d – 5,000
Bank a/c
Dr Cr
Date Particulars J/F Amount Date Particulars J/F Amount
18/06/_5 To Cash a/c – 1,50,000 20/06/05
24/06/_5 		By Machinery a/c
By M/s Ramdas
& Brothers a/c
 –
– 		25,000
5,000

Sub Total

 1,50,000

25/06/_5
Sub Total
By Balance c/d
– 		30,000
1,20,000
tl 1,50,000 tl 1,50,000
25/06/_5 To Balance b/d – 1,20,000
Goods/Stock a/c
Dr Cr
Date Particulars J/F Amount Date Particulars J/F Amount
18/06/_5
18/06/_5 		To Cash a/c
To M/s Ramdas
& Brothers a/c
 –
– 		1,50,000
10,000 		19/06/05
21/06/_5 		By Machinery a/c
By Mr. Natekar a/c 		–
– 		12,000
8,000

Sub Total

 1,60,000

Sub Total

 20,000
M/s Ramdas & Brothers a/c
Dr Cr
Date Particulars J/F Amount Date Particulars J/F Amount
24/06/_5 To Bank a/c – 5,000 18/06/05 By Goods/Stock a/c – 10,000

25/06/_5
Sub Total
To Balance c/d
– 		5,000
5,000
Sub Total

 10,000
tl 10,000 tl 10,000
25/06/_5 By Balance b/d – 5,000
Machinery a/c
Dr Cr
Date Particulars J/F Amount Date Particulars J/F Amount
20/06/_5 To Bank a/c – 25,000

Sub Total

 25,000

25/06/_5
Sub Total
By Balance c/d
– 		0
25,000
tl 25,000 tl 25,000
25/06/_5 To Balance b/d – 25,000
Mr. Natekar a/c
Dr Cr
Date Particulars J/F Amount Date Particulars J/F Amount
21/06/_5 To Goods/Stock a/c – 8,000 24/06/_5 By Cash a/c – 2,000

Sub Total

 8,000

25/06/_5
Sub Total
By Balance c/d
– 		2,000
6,000
tl 8,000 tl 8,000
25/06/_5 To Balance b/d – 6,000
Wages Paid a/c
Dr Cr
Date Particulars J/F Amount Date Particulars J/F Amount
21/06/_5 To Cash a/c – 5,000

Sub Total

 5,000

25/06/_5
Sub Total
By Balance c/d
– 		0
5,000
tl 5,000 tl 5,000
25/06/_5 To Balance b/d – 5,000
Commission Received a/c
Dr Cr
Date Particulars J/F Amount Date Particulars J/F Amount
24/06/_5 By Cash a/c – 500

25/06/_5
Sub Total
To Balance c/d
– 		0
500
Sub Total

 500
tl 500 tl 500
25/06/_5 By Balance b/d – 500
Author : The Edifier
Notes 20