Question

Commenced business with cash rupees 50,000 and fixed assets for rupees 1,00,000
Purchased goods from M/s SK, Sons for rupees 20.000,
Sold poods to M/s Krishna Re Sons costing rupees 10,000 for rupees 12,000 for cash.
Depreciate fixed assets @ 10% for 3 months
Paid into bank rupee 20,000
Interest on capital of rupees 1,500 to be allowed​

Answer 1

Answer:

Please find the answer in the explanation section.

Explanation:

Journal entries are as follows:

1. Cash A/c   Dr.                 50000

   Fixed asset A/c Dr.        100000(Please write account name if given like Machinery A/c, Furniture A/c)            

      To Capital A/c             150000

(Being cash, fixed asset introduced in business as capital)

2. Purchase A/c     Dr.      20000

         To M/s SK Sons      20000

(Being Purchased goods on credit from M/s SK and Sons)

3. Cash A/c         Dr.     12000

       To Sales A/c          12000

(Being goods sold for cash)

4. Depreciation A/c  Dr.    2500

        To Fixed asset A/c    2500  (Please write account name if given like Machinery A/c, Furniture A/c)

(Being fixed asset depreciated)

Working note:

10% * 100000 = 10000 * 0.25(3/12) = 2500

5. Bank A/c          Dr.       20000    

       To Cash A/c             20000

(Being paid into bank)

6.  Interest on capital A/c Dr.   1500

              To Cash A/c                  1500

( Being allowed interest on capital)

Hope this helps :)