Ananth is a trader dealing in textiles. For the following transactions, pass journal entries for the month of January, 2018 I
Jan.
Rs
1 Commenced business with cash 70,000
2 Purchased goods from X and Co. on credit 30,000
3 Cash deposited into bank 40,000
4 Bought a building from L and Co on credit
5 Cash withdrawn from bank for office use
95,000
5,000
6 Cash withdrawn from bank for personal use of Ananthu 4.000
7 Towels given as charities 3,000
8 Shirts taken over by Ananth for personal use 12,000
9 Sarees distributed as free samples
3,000
Answers
Explanation:
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Answer:
Concept:
Journal Entries are the first step in accounting cycle. It is used to record all the business transactions.
Find:
We pass journal entries for the month of January, 2018
Given:
1 Commenced business with cash 70,000
2 Purchased goods from X and Co. on credit 30,000
3 Cash deposited into bank 40,000
4 Bought a building from L and Co on credit 95000
5 Cash withdrawn from bank for office use 5,000
6 Cash withdrawn from bank for personal use of Ananth 4.000
7 Towels given as charities 3,000
8 Shirts taken over by Ananth for personal use 12,000
9 Sarees distributed as free samples 3,000
Explanation:
Journal entry:
1. Cash A/c ....Dr. 70,000
To Ananth's capital A/c 70,000
(Being Commenced business with cash)
2. Purchases A/c ...Dr. 30,000
To X and Co. A/c 30,000
(Being Credit purchases made)
3. Bank A/c ...Dr. 40,000
To Cash A/c 40,000
(Being Cash deposited into bank)
4. Buildings A/c ...Dr. 95,000
To L and Co. A/c 95,000
(Being Building bought on credit)
5. Cash A/c ...Dr 5,000
To Bank A/c 5,000
(Being Cash withdrawn from bank for office use)
6. Drawings A/c ...Dr. 4,000
To Bank A/c 4,000
(Being Cash withdrawn from bank for personal use)
7. Charities A/c ....Dr. 3,000
To Purchases A/c 3,000
(Being Goods given for charities)
8.Drawings A/c ...Dr. 12,000
To Purchases Alc 12,000
(Being Goods taken over for personal use)
9. Sales promotion A/c .... Dr. 3000
To Purchases A/c 3000
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