Ledger Account Preparation and Balancing - Illustration

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 M/s __ 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
15/06/05
19/06/05
24/06/05
24/06/05
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
17/06/05
17/06/05
18/06/05
18/06/05
21/06/05
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   sub-total   1,90,000
        25/06/05 By Balance c/d 24,500
  Total   2,14,500   Total   2,14,500
25/06/05 To Balance b/d 24,500        
Capital a/c
Dr Cr
Date Particulars J/F Amount Date Particulars J/F Amount
        15/06/05 By Cash a/c 2,00,000
  sub-total   0   sub-total   2,00,000
25/06/05 To Balance c/d 2,00,000        
  Total   2,00,000   Total   2,00,000
        25/06/05 By Balance b/d 2,00,000
Furniture a/c
Dr Cr
Date Particulars J/F Amount Date Particulars J/F Amount
17/06/05 To Cash a/c 20,000        
  sub-total   20,000   sub-total   0
        25/06/05 By Balance c/d 20,000
  Total   20,000   Total   20,000
25/06/05 To Balance b/d 20,000        
Rent Paid a/c
Dr Cr
Date Particulars J/F Amount Date Particulars J/F Amount
17/06/05 To Cash a/c 5,000        
  sub-total   5,000   sub-total   0
        25/06/05 By Balance c/d 5,000
  Total   5,000   Total   5,000
25/06/05 To Balance b/d 5,000        
Bank a/c
Dr Cr
Date Particulars J/F Amount Date Particulars J/F Amount
18/06/05 To Cash a/c 1,50,000 20/06/05
24/06/05
By Machinery a/c
By M/s Ramdas
      & Brothers a/c


25,000

5,000
  sub-total   1,50,000   sub-total   30,000
        25/06/05 By Balance c/d 1,20,000
  Total   1,50,000   Total   1,50,000
25/06/05 To Balance b/d 1,20,000        
Goods/Stock a/c
Dr Cr
Date Particulars J/F Amount Date Particulars J/F Amount
18/06/05
18/06/05
To Cash a/c
By M/s Ramdas
      & Brothers a/c


10,000

10,000
19/06/05
21/06/05
By Cash a/c
By Mr. Natekar a/c

12,000
8,000
  sub-total   20,000   sub-total   20,000
  Total   20,000   Total   20,000
               
M/s Ramdas & Brothers a/c
Dr Cr
Date Particulars J/F Amount Date Particulars J/F Amount
24/06/05 To Bank a/c 5,000 18/06/05 By Goods/Stock a/c 10,000
  sub-total   5,000   sub-total   10,000
25/06/05 To Balance c/d 5,000        
  Total   10,000   Total   10,000
        25/06/05 By Balance b/d 5,000
Machinery a/c
Dr Cr
Date Particulars J/F Amount Date Particulars J/F Amount
20/06/05 To Bank a/c 25,000        
  sub-total   25,000   sub-total   0
        25/06/05 By Balance c/d 25,000
  Total   25,000   Total   25,000
25/06/05 To Balance b/d 25,000        
Mr. Natekar a/c
Dr Cr
Date Particulars J/F Amount Date Particulars J/F Amount
21/06/05 To Goods/Stock a/c 8,000 24/06/05 By Cash a/c 2,000
  sub-total   8,000   sub-total   2,000
        25/06/05 By Balance c/d 6,000
  Total   8,000   Total   8,000
25/06/05 To Balance b/d 6,000        
Wages Paid a/c
Dr Cr
Date Particulars J/F Amount Date Particulars J/F Amount
21/06/05 To Cash a/c 5,000        
  sub-total   5,000   sub-total   0
        25/06/05 By Balance c/d 5,000
  Total   5,000   Total   5,000
25/06/05 To Balance b/d 5,000        
Commission Received a/c
Dr Cr
Date Particulars J/F Amount Date Particulars J/F Amount
        24/06/05 By Cash a/c 500
  sub-total   0   sub-total   500
25/06/05 To Balance c/d 500        
  Total   500   Total   500
        25/06/05 By Balance b/d 500