Page 52 - ISCDEBK-XI

Journal 7.7

(vii) Withdrew cash ` 500 and goods worth ` 200 for personal use. These goods were bought
from D & Co. getting Trade Discount of 15%.
(viii) Encashed a cheque of ` 3,000 for T charging him ` 10 commission.
(ix) L is declared insolvent and only 40 paise in a rupee is received from his estate.
(x) Sold personal car for ` 50,000 and bought a new one for business with the proceeds plus
` 1,50,000 from office cash.
(xi) Out of the goods worth ` 5,000 insured for ` 4,000, a part is burnt by fire, the loss
amounted ` 400. The insurers admitted the claim for a proportionate loss and paid cash.
(xii) Goods worth ` 600 were spoiled and sold to K for ` 300 only.
(xiii) Old furniture appearing in the books at ` 6,000 is exchanged for new furniture of
` 12,000. The old furniture has been valued at ` 4,000 for exchange purpose.

Solution: JOURNAL
Date Particulars L.F. Dr. (`) Cr. (`)

(i) Stock A/c ...Dr. 25,000
Furniture A/c ...Dr. 10,000
Debtors A/c ...Dr. 7,000
Machinery A/c ...Dr. 8,000
Goodwill A/c (Note) ...Dr. 12,000
To Creditors A/c 22,000
To B’s Loan A/c 10,000
To Cash A/c 30,000
(Being the running business of Rama & Co. acquired for ` 40,000;
out of ` 40,000 paid to Rama & Co., ` 10,000 borrowed from B.
` 12,000 paid in excess of the net intrinsic worth—assets minus
liabilities—of the business transferred to Goodwill Account)
(ii) Cash A/c ...Dr. 94,000
Interest A/c ...Dr. 6,000
To M’s Loan A/c 1,00,000
(Being the loan of ` 1,00,000 from M, interest @ 6% p.a. on
` 1,00,000 deducted in advance for one year)
(iii) Purchases A/c ...Dr. 5,100
To Cash A/c 2,499
To Discount Received A/c 51
To D & Co. 2,550
(Being the goods worth ` 6,000 less 15% trade discount bought from D & Co.;
half of the amount of ` 5,100 paid in cash to avail 2% cash discount)
(iv) Bank A/c ...Dr. 585
Discount Allowed A/c ...Dr. 15
To Sales A/c 600
(Being the goods worth ` 600 sold for cash less 2½% cash discount)
(v) L ...Dr. 600
To Bank A/c 585
To Discount Allowed A/c 15
(Being the L’s cheque returned unpaid by Bank; cash discount
allowed to L written back)