Compound Journal Entries
Pàss the necessary Journal entries for the following transactions (in the attachment).
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Answers
April 5:
Salaries A/c ... Dr - Rs 30,000
Rent A/c ... Dr - Rs 10,000
Wages A/c ... Dr - Rs 8,000
- To bank A/c - Rs 48,000
(Being salaries, rent and wages received by cheque.)
April 7:
Purchases A/c ... Dr - Rs 27,000
- To discount received A/c - Rs 540
- To cash A/c - Rs 26,460
(Being goods purchased on 10% trade discount and 2% cash discount.)
Calculation of discount:
Trade discount is deducted first.
10% of Rs 30,000 = Rs 3,000
Rs 30,000 - Rs 3,000 = Rs 27,000
Cash discount is deducted after that.
2% of Rs 27,000 = Rs 540
The remaining amount = Rs 27,000 - Rs 540 = Rs 26,460, which is credited to the cash account since it hasn't been specified through what medium [cash/cheque] it was paid.
April 15:
Raju's A/c ... Dr - Rs 12,000
- To cash A/c - Rs 5,000
- To bank A/c - Rs 7,000
(Being amount paid to Raju by cash and by cheque.)
April 18:
Roma's A/c ... Dr - Rs 2,000
Cash A/c ... Dr - Rs 1,940
Discount allowed A/c ... Dr - Rs 60
- To sales A/c - Rs 4,000
(Being goods sold to Roma on 20% trade discount and 3% cash discount, receiving half of the amount.)
Calculation of discount:
Trade discount is deducted first.
20% of Rs 5,000 = Rs 1,000
Rs 5,000 - Rs 1,000 = Rs 4,000
Cash discount is deducted after that.
3% of Rs 4,000 = Rs 120
Rs 4,000 - Rs 120 = Rs 3,880
We take half of the amount, since it is mentioned that only half of it was received.
Rs 3,880 ÷ 2 = Rs 1,940, which is debited to the cash account.
April 20:
Ramesh's A/c ... Dr - Rs 3,000
Bank A/c ... Dr - Rs 5,000
- To sales A/c - Rs 8,000
(Being goods sold to Ramesh, receiving Rs 5,000 immediately.)
April 25:
Cash A/c ... Dr - Rs 10,000
Delivery van A/c ... Dr - Rs 50,000
- To capital A/c - Rs 60,000
(Being additional capital and personal asset introduced.)
April 26:
Anil's A/c ... Dr - Rs 1,000
- To discount received A/c - Rs 25
- To cash A/c - Rs 975
(Being cash paid to Anil, with discount.)
April 30:
Raju's A/c ... Dr - Rs 3,000
- To cash A/c - Rs 1,000
- To bank A/c - Rs 2,000
(Being amount paid to Raju by cash and by cheque.)
April 30:
Mohan's A/c ... Dr - Rs 5,000
- To cash A/c - Rs 4,800
- To discount received A/c - Rs 200
(Being amount paid to Mohan in full settlement.)
It is mentioned that only Rs 4,800 was paid in full settlement, meaning that he is no longer liable. The remaining amount will be considered as a discount.