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8.8                                                    Double Entry Book Keeping—CBSE XI

                     Solution:                            JOURNAL

                     Date     Particulars                                          L.F.   Dr. (`)   Cr. (`)
                       (i)   Car A/c                                         ...Dr.       10,000
                                To  Cash A/c                                                       10,000
                             (Car purchased for business use)
                       (ii)   Cash A/c                                       ...Dr.       5,000
                                To  Bad Debts Recovered A/c                                         5,000
                             (Cash received against bad debts)
                       (iii)  (a)  Amrit                                     ...Dr.       20,000
                                To  Sales A/c                                                      20,000
                             (Goods sold at profit of 20% on sale price) (WN 1)
                          (b)  Cash A/c                                      ...Dr.       18,000
                             Discount Allowed A/c                            ...Dr.       2,000
                                To  Amrit                                                          20,000
                             (Cash received and allowed 10% discount)
                       (iv)     Loss by Embezzlement A/c                     ...Dr.       2,000
                                To  Cash A/c                                                        2,000
                             (Cash embezzled by an employee)
                       (v)  (a)  D.K. Suppliers                              ...Dr.       51,000
                             Loss on Sale of Machine A/c                     ...Dr.       34,000
                                To  Machinery A/c                                                  85,000
                             (Loss on sale of machine recorded)
                          (b)  Machinery A/c                                 ...Dr.      1,76,000
                                To  D.K. Suppliers                                                1,76,000
                             (An old machine of ` 85,000 sold at ` 51,000 in exchange
                             for a new machine costing ` 1,76,000)
                             Alternatively, combined entry of (a) and (b)
                             Machinery A/c (New Machine)                     ...Dr.      1,76,000
                             Loss on Sale of Machine A/c                     ...Dr.       34,000
                                To  Machinery A/c (Old Machine)                                    85,000
                                To  D.K. Suppliers (Net Invoice)                                  1,25,000
                             (An old machine of ` 85,000 sold at ` 51,000 in exchange
                             for a new machine costing ` 1,76,000)
                       (vi)     Investment A/c                               ...Dr.       24,000
                                To  Bank A/c                                                       24,000
                             (Investment made in shares of SAIL)
                      (vii)     Bhanu                                        ...Dr.       27,100
                                To  Sales A/c                                                      26,400
                                To  Cash A/c                                                         700
                             (Goods sold on credit and freight to be charged from customer)
                      (viii)     No entry can be passed. This is not a transaction.
                       (ix)  (a)  Purchases A/c                              ...Dr.       63,000
                                To  M/s. Kamath Bros.                                              63,000
                             (200 cases of goods @ ` 350 per case purchased less trade
                             discount 10%) (WN 2)
                          (b)  M/s. Kamath Bros.                             ...Dr.       37,800
                                To  Cash A/c                                                       32,130
                                To  Discount Received A/c                                           5,670
                             (60% of invoice price of ` 63,000 paid and received 15% cash discount)
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