Too started business with capital of kh120,000, cash in bank 50,000, cash on hand Kshs30,000,stock 40,000 .The following transaction took place in the month of May 2020.Date Kshs.1. Bought goods from JUMA 15,0002. Bought goods from Soni 35,0003. sold goods bob 60, 0005.Sold goods to Sam 25,0006.Goods returned to Juma 3,0007. Sam returned goods 3,35010. Paid Juma by cheque as full settlement 13,00017. Received cheque from Sam as full settlement of hisaccount 24,00019. Bought goods cash 20,000CUEA/ACAD/EXAMINATIONS/DIRECTORATE OF EXAMINATIONS & TIMETABLING Page 2ISO 9001:2015 Certified by the Kenya Bureau of Standards.20. Sold goods cash 30,00023. Withdrew cash for his use 2,00026. Took goods for his use 3,00028. Banked cash 2,00029. Paid telephone cash 2,00030. Paid electricity cash 1,00030. Paid carriage inward 1,30030. Paid carriage outward 1,500Additional informationClosing stock kshs 20,000Required;i) Enter the above in ledgers and books of prime entry .ii) Extract the trial balancesiii) Prepare trading profit and loss account and the balance sheet
Question
Too started business with capital of kh120,000, cash in bank 50,000, cash on hand Kshs30,000,stock 40,000 .The following transaction took place in the month of May 2020.Date Kshs.1. Bought goods from JUMA 15,0002. Bought goods from Soni 35,0003. sold goods bob 60, 0005.Sold goods to Sam 25,0006.Goods returned to Juma 3,0007. Sam returned goods 3,35010. Paid Juma by cheque as full settlement 13,00017. Received cheque from Sam as full settlement of hisaccount 24,00019. Bought goods cash 20,000CUEA/ACAD/EXAMINATIONS/DIRECTORATE OF EXAMINATIONS & TIMETABLING Page 2ISO 9001:2015 Certified by the Kenya Bureau of Standards.20. Sold goods cash 30,00023. Withdrew cash for his use 2,00026. Took goods for his use 3,00028. Banked cash 2,00029. Paid telephone cash 2,00030. Paid electricity cash 1,00030. Paid carriage inward 1,30030. Paid carriage outward 1,500Additional informationClosing stock kshs 20,000Required;i) Enter the above in ledgers and books of prime entry .ii) Extract the trial balancesiii) Prepare trading profit and loss account and the balance sheet
Solution
i) Enter the above in ledgers and books of prime entry:
-
Create the following ledgers:
- Capital
- Cash in Bank
- Cash on Hand
- Stock
- JUMA (Supplier)
- Soni (Supplier)
- Bob (Customer)
- Sam (Customer)
-
Record the transactions in the respective books of prime entry:
-
Date 1: Bought goods from JUMA for Kshs 15,000
- Debit Stock (Kshs 15,000)
- Credit JUMA (Kshs 15,000)
-
Date 2: Bought goods from Soni for Kshs 35,000
- Debit Stock (Kshs 35,000)
- Credit Soni (Kshs 35,000)
-
Date 3: Sold goods to Bob for Kshs 60,000
- Debit Bob (Kshs 60,000)
- Credit Stock (Kshs 60,000)
-
Date 5: Sold goods to Sam for Kshs 25,000
- Debit Sam (Kshs 25,000)
- Credit Stock (Kshs 25,000)
-
Date 6: Goods returned to Juma for Kshs 3,000
- Debit JUMA (Kshs 3,000)
- Credit Stock (Kshs 3,000)
-
Date 7: Sam returned goods for Kshs 3,350
- Debit Stock (Kshs 3,350)
- Credit Sam (Kshs 3,350)
-
Date 10: Paid Juma by cheque as full settlement for Kshs 13,000
- Debit JUMA (Kshs 13,000)
- Credit Cash in Bank (Kshs 13,000)
-
Date 17: Received cheque from Sam as full settlement of his account for Kshs 24,000
- Debit Cash in Bank (Kshs 24,000)
- Credit Sam (Kshs 24,000)
-
Date 19: Bought goods for cash for Kshs 20,000
- Debit Stock (Kshs 20,000)
- Credit Cash on Hand (Kshs 20,000)
-
Date 20: Sold goods for cash for Kshs 30,000
- Debit Cash on Hand (Kshs 30,000)
- Credit Stock (Kshs 30,000)
-
Date 23: Withdrew cash for personal use for Kshs 2,000
- Debit Cash on Hand (Kshs 2,000)
- Credit Capital (Kshs 2,000)
-
Date 26: Took goods for personal use for Kshs 3,000
- Debit Capital (Kshs 3,000)
- Credit Stock (Kshs 3,000)
-
Date 28: Banked cash for Kshs 2,000
- Debit Cash on Hand (Kshs 2,000)
- Credit Cash in Bank (Kshs 2,000)
-
Date 29: Paid telephone bill in cash for Kshs 2,000
- Debit Telephone Expenses (Kshs 2,000)
- Credit Cash on Hand (Kshs 2,000)
-
Date 30: Paid electricity bill in cash for Kshs 1,000
- Debit Electricity Expenses (Kshs 1,000)
- Credit Cash on Hand (Kshs 1,000)
-
Date 30: Paid carriage inward in cash for Kshs 1,300
- Debit Carriage Inward Expenses (Kshs 1,300)
- Credit Cash on Hand (Kshs 1,300)
-
Date 30: Paid carriage outward in cash for Kshs 1,500
- Debit Carriage Outward Expenses (Kshs 1,500)
- Credit Cash on Hand (Kshs 1,500)
-
ii) Extract the trial balances:
Prepare a trial balance by listing all the ledger accounts and their respective debit and credit balances:
| Account | Debit (Kshs) | Credit (Kshs) |
|---|---|---|
| Capital | 120,000 | |
| Cash in Bank | 13,000 | |
| Cash on Hand | 30,000 | 2,000 |
| Stock | 20,000 | 20,000 |
| JUMA (Supplier) | 13,000 | |
| Soni (Supplier) | 35,000 | |
| Bob (Customer) | 60,000 | |
| Sam (Customer) | 24,000 | |
| Telephone Expenses | 2,000 | |
| Electricity Expenses | 1,000 | |
| Carriage Inward Exp. | 1,300 | |
| Carriage Outward Exp. | 1,500 | |
| ---------------------- | -------------- | --------------- |
| Total | 170,000 | 170,000 |
iii) Prepare trading profit and loss account and the balance sheet:
Trading Profit and Loss Account for May 2020:
| Particulars | Amount (Kshs) |
|---|---|
| Sales | 85,000 |
| Less: Cost of Goods Sold | |
| Opening Stock | 40,000 |
| Add: Purchases | 50,000 |
| Less: Returns Outwards | 3,000 |
| Cost of Goods Available for Sale | 87,000 |
| Less: Closing Stock | 20,000 |
| Cost of Goods Sold | 67,000 |
| Gross Profit | 18,000 |
| ----------------------- | --------------- |
| Total | 85,000 |
Balance Sheet as at May 2020:
| Assets | Amount (Kshs) | Liabilities | Amount (Kshs) |
|---|---|---|---|
| Cash in Bank | 13,000 | Capital | 120,000 |
| Cash on Hand | 2,000 | ||
| Stock | 20,000 | ||
| ---------------------- | --------------- | ---------------------- | --------------- |
| Total | 35,000 | Total | 120,000 |
Similar Questions
Started business with Kshs. 600,000 in the bank and 500,000 in cash2 Bought goods on credit from Ndung'u Kshs. 270,0003: Bought goods on credit form S. Muigai Kshs. 75,0005: Bought goods for cash Kshs. 54,0006: We returned goods to Ndung'u Kshs. 12,0008: Bought goods on credit from S. Muigai Kshs. 57,00010: Sold goods on credit to K. Mwaniki Kshs. 117,00012: Sold goods for cash Kshs. 63,00018: Took Kshs.900 of the cash and paid it to the bank21: Bought machinery by cheque Kshs. 165,00022: Sold goods on credit to M. Otieno Kshs. 66,00028: We returned goods to S. Muigai Kshs. 9,00029: We paid Ndung'u by cheque Kshs. 258,00031: Bought machinery on credit from Kinuthia Kshs.81,000Requiredi. Enter the transactions in the relevant ledger accounts. (8 Marks)ii. Balance off the ledger accounts and extract a trial balance. (7 Marks)
The following transactions are given May 1: Business started with cash of 150002: Goods purchased for cash 50003: Purchased goods from Mr. Agrawal 10005: Paid to Mr. Agrawal 10009: Paid for postage 12011: Deposited into bank 700014: Sold goods on credit to Ram 150015: Received cash from Ram 100019: Paid telephone charges of 6024: Purchased Furniture 3000029: Cash sales 90030: Received from Ram 50031: Paid salaries for the month of 15031: Purchase government securities 50031: Paid for advertising by cheque 150Required: Journal Entries
Q-1: Journalise the following transactions:Jan-1 Ramesh started business with cash Rs. 50,000.Jan-4 Purchased goods for cash Rs. 7,000.Jan-5 Sold goods for cash Rs. 5,000.Jan-7 Purchased goods from Mohan on credit worth Rs. 4,500.Jan-12 Sold goods to Sohan on credit worth Rs. 2,000.Jan-16 Paid wages amounted to Rs. 4,000.Jan-17 Paid salaries to Rs. 2,500Jan-22 Received commission Rs. 2,000.Jan-25 Goods returned by Sohan worth Rs. 1,500.Jan-28 Returned goods to Mohan Rs. 1,000.Jan-30 Cash Received from Sohan Rs. 1,200.Jan-31 Purchased furniture from Deepak worth Rs. 5,000.
The following transactions took place in the month of February 2023 in Omolo’s business, a Sole Proprietorship01/02/23Omolo invested shs. 50,000 in the business03/02/23Bought stock worth shs. 15,000 and paid by cash05/02/23Returned some broken stock items worth shs. 500 and was refunded cash06/02/23Bought more stock worth shs. 4000 from Isaac on credit07/02/23Deposited shs. 5000 cash into the business bank account11/02/23Made cash sales to Kamau worth Sh. 600015/02/23Bought furniture worth shs. 3000 and paid by cash20/02/23Made credit sales to Kamau worth shs. 600022/02/23Kamau returned good worth shs. 500 because they had expired25/02/23Paid Isaac shs. 2000 using cash28/02/23Received a cheque of Sh. 3000 from Kamau28/02/23Omolo withdrew Sh. 1000 cash from the business for personal useREQUIRED:Journal entries to record the above transactions in Omollo’s business for the month of February 2023.
From following transaction related to Sundar and Co. Prepare Cash Book with two columns, for the months of September, 2019. Date Details Sept. 01 Bank Balance 01 Cash Balance Purchased goods and payment made by cheque 04 08 13 Sold goods for cash Purchased Machinery and payment made by cheque 16 Sold goods and received cheque (deposited same day) 17 Purchased goods for cash from Mrunal 20 Purchased Stationery and paid by cheque 24 Cheque given to Avadhut 27 Cash withdrawn from Bank 30 Paid Rent by cheque 30 Paid Salary Amount (2) 52,000 15,000 15,000 8,000 10,000 12,000 18,000 2,100 1,800 12,000 500 4,000
Upgrade your grade with Knowee
Get personalized homework help. Review tough concepts in more detail, or go deeper into your topic by exploring other relevant questions.