22.
ILDO
1
Sold goods to Kamal costing 10,000 at 30% above cost less trade
discount 10% and cash discount 2%. Kamal was not willing to avail
cash discount
2 Bought a second hand machinery from Gopal for 25,000. Spent 4,000
on its repair and 1,000 towards installation
3. Paid insurance premium * 2,500. It includes 3 500 paid for the next year
4 Sold goods to Raman of list price * 10,000 less 15% trade discount and
2% cash discount. He paid the payment on the spot.
5. Kamal died in an accident and nothing could be recovered from him.
6. Allowed interest on capital amounting 50,000 @ 8% p.a.
7. Charge depreciation on Machine @ 10% at the end of the year.
8. Commission Accrued (due but not received) 500
SOLUTION
Answers
Journal Entries
1. Kamal A/C DR 11,700
To Sales A/C 11,700
( Being goods sold )
2. Machinery A/C DR 30,000
To Cash A/C 30,000
( Being old machinery purchased and spent on its repair and installation )
3. Insurance Premium A/C DR 2,500
To Cash A/C 2,500
( Being insurance paid )
4. Cash A/C DR 8,330
Discount A/C DR 170
To Sales A/C 8,500
( Being goods sold and given cash discount )
5. Bad Debt A/C DR 11,700
To Kamal A/C 11,700
( Being bad debt )
6. Interest on Capital A/C DR 4,000
To Cash A/C 4,000
( Being interest on capital given )
7. Depreciation A/C DR 3,000
To Machinery A/C 3,000
( Being depreciation charged )
NOTE - As timeperiod was not given so we have assumed that it was puchased in the starting of the year.
8. Accrued Commission A/C DR 500
To Commission A/C 500
( Being commission accrued )
Answer:
Question 3 is wrong
Explanation:
3. Paid insurance premium 2,500. It includes 500 paid for the next year.