Question

Mr. Anand Agarwal had 1,000 shares of Reliance Industries Ltd. of ₹ 10 each. In March, 2019
he sold his shares @ ₹1,525 per share. Further he decided to set up a new business of
manufacturing electrical appliances. On 1st April, 2019, he started his business under the name
of M/S Agarwal Electrical Appliances. He decided that all the transactions should be made
through bank and deposited the whole money in Axis bank Ltd. He purchase a running factory
of electrical appliances consisting of entire premises for ₹ 500,000, Plant and Machinery
₹350,000, Furniture ₹80,000, Stock ₹100,000 in against of ₹10,50,000 as purchase
consideration.
He later, raised some money to meet out the working capital requirements of the business, for
which he approached his bank and took a loan of ₹500,000 @ 10% p.a. Interest.
His transactions for the year ending 31st March, 2020, were as follows :
Total Purchases (including ₹410,000 in cash) 12,50,000
Total Sales (including ₹525,000 in cash) ₹20,50,000
Wages ₹230,000
Carriage ₹20,500
Power and lighting ₹15,500
Salary of staff and manager ₹1,25,000
Postage and telephone ₹4,200
Printing & stationery ₹3,800
Advertising ₹16,700
Money collected from Debtors ₹12,50,000
Insurance premium ₹12,100
Conveyance ₹13,200
Payment made to creditors ₹6,50,000
Drawings made during the year ₹5,000 per month.
Here, you are required to prepare :
● Jornalise these transactions and post them into Ledger.
● Prepare Trial Balance.
● Prepare Financial Statements

Answer 1

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