1. Ram started business with cash 50000 and goods 30000.
2. Ram took a loan from Keshav 25000.
3. Sold 40% of the goods at a mark up of 25% on cost for cash.
4. Paid wages 2000.
5. Rent outstanding 3000.
6. Sold remaining goods to Vijay at a profit of 20% on selling price.
7. Interest due on loan 2500
8. Vijay returned 50% of the goods sold to him.
9. Paid to keshav half amount of the loan together with full interest.
Answers
1. Cash A/c Dr. 50,000
Purchases A/c Dr. 30,000
To Capital A/c 80,000
(Started business with cash)
2. Cash A/c Dr. 25,000
To Loan from Keshav A/c 25,000
(Took loan from Keshav)
3. Cash A/c (WN1) Dr. 15,000
To Sales A/c 15,000
(Sold 40% of goods purchased at 25% profit)
4. Wages A/c Dr. 2,000
To Cash A/c 2,000
(Paid wages in cash)
5. Rent A/c Dr. 3,000
To Outstanding Rent A/c 3,000
(Rent outstanding)
6. Vijay’s A/c Dr. 22,500
To Sales A/c (WN2) 22,500
(Sold remaining 60% of the goods at 20% on selling price)
7. Interest A/c Dr. 2,500
To Outstanding Interest on Loan from Keshav A/c 2,500
(Interest on Keshav’s loan is outstanding)
8. Sales Return A/c Dr. 11,250
To Vijay’s A/c 11,250
(Vijay returned 50% of the goods sold to him)
9. Loan from Keshav A/c Dr. 12,500
Outstanding Interest on Loan from Keshav A/c 2,500
To Cash A/c 15,000
(Paid to Keshav, 50% of the loan and outstanding interest)
Working Notes:
WN1 Calculation of amount of sales
40% of Goods = 40% of 30,000 = Rs 12,000Profit = on Cost = 25% = 25% of 12,000 = Rs 3,000Therefore, Sales = Cost of Goods + Profit = 12,000 + 3,000 = Rs 15,000
WN2 Calculation of amount of sales to Vijay
60% of Goods = 60% of 30,000 = Rs 18,000Profit = 20% on Selling PriceLet Selling price be 'x'Profit = x5Cost + Profit = Selling Price18,000 + x5 = xx = Rs 22,500
Hope this answers your query.
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