Yes. Let's take a set of transactions and prepare all the requisite information asked. Following are the transactions for the period April 20x1 to March 20x2 in the books of Michael Traders 1-Apr Michael started business with cash 600,000, cash at Bank of America 700,000, furniture 200,000. 1-Apr PuRead more
Yes.
Let’s take a set of transactions and prepare all the requisite information asked.
Following are the transactions for the period April 20×1 to March 20×2 in the books of Michael Traders
1-Apr | Michael started business with cash 600,000, cash at Bank of America 700,000, furniture 200,000. |
1-Apr | Purchased Plant & Machinery worth 250,000 by cheque. |
25-Apr | Purchased goods from ABC Ltd worth 800,000 @10% trade discount. |
5-May | Cash Sales 1,000,000 @5% trade discount to XYZ Traders |
15-May | Deposited cash with Bank of America 500,000. |
5-Jun | Paid ABC Ltd 300,000 in cash. |
10-Jun | Received commission 75,000 by cheque. |
25-Jun | Cash Purchases 250,000. |
5-Jul | Sold goods to XYZ Traders 475,000. |
15-Jul | Received 275,000 by cheque from XYZ Traders. |
5-Aug | Loan taken from Bank of America 200,000 |
25-Aug | Purchased goods from ABC Ltd 50,000. |
27-Aug | Withdrew cash from bank 10,000. |
5-Sep | Received commission 55,000 in cash. |
10-Sep | Paid ABC Ltd 70,000 by cheque. |
20-Sep | Received 90,000 in cash from XYZ Traders. |
1-Oct | Bank loan repaid 50,000. |
25-Oct | Cash Purchases 25,000. |
5-Nov | Sold goods to XYZ Traders 47,000. |
15-Nov | Withdrew cash from bank 15,000. |
5-Dec | Received interest from bank 5,000. |
25-Dec | Purchased goods from ABC Ltd 75,000. |
5-Jan | Cash Sales 100,000. |
15-Jan | Deposited cash with Bank of America 35,000. |
25-Feb | Cash Purchases 450,000. |
28-Feb | Office was taken on rent in the month of Feb. Office rent paid in cash 50,000. |
28-Feb | Employees were hired in the month of Feb. Paid salary by cheque 30,000 & cash 30,000 for the month of Feb 20×2. |
5-Mar | Sold goods to XYZ Traders 675,000. |
31-Mar | Paid office rent by cheque 50,000. |
31-Mar | Paid salary in cash 30,000 for the month of March 20×2. |
You are required to:
(i) Journalize the above transactions and post them in Ledgers and prepare a Trial Balance.
(ii) Prepare Trading A/c, Profit & Loss A/c and Balance Sheet taking into consideration:
1. Closing Stock as on 31st March 20×2 is 200,000.
2. Salary outstanding for the month of March 20×2 is 30,000.
3. [email protected]% to be charged on Furniture & Fixtures and @15% on Plant & Machinery.
1. Journal Entries
2. Ledgers
3. Trial Balance
4. Trading A/c & Profit and Loss A/c
5. Balance Sheet
An excel sheet of the entire transactions along with the requisite information asked has been attached for your reference.
30-transactions-of-Journal-Ledger-Trial-Balance-Financial-Statements
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What is Suspense account? Suspense account is a general ledger account prepared in the following situations- 1. Transactions are unidentified or unclassified at the time of occurrence, or 2. Difference arise between the total of debit side & credit side of the trial balance. When the right accouRead more
What is Suspense account?
Suspense account is a general ledger account prepared in the following situations-
1. Transactions are unidentified or unclassified at the time of occurrence, or
2. Difference arise between the total of debit side & credit side of the trial balance.
When the right account is determined or error is rectified, the amount shall be moved from the suspense account to its proper account.
Presentation of Suspense account in Financial Statements
In case Suspense A/c is not closed at the end of the accounting period, the balance in the Suspense A/c is presented in the Balance Sheet.
Extracts of the balance sheet have been attached for better understanding.
Example of Suspense A/c
A customer of ABC Ltd makes online payment of 50,000 but he did not specify against which open invoice (out of the 20 open invoices) the amount needs to be settled. In this case, the accountant will pass the initial entry in the suspense account till he identifies the correct open invoice.
Journal entry to park the unidentified amount in the suspense account-
The accountant identifies the open invoice against which the amount of 50,000 is to be settled.
Journal entry to close the suspense account and post the amount received against the appropriate invoice and proper account-