(a) Pass Journal entries in the books of Sasikumar who is dealing in automobiles.

2017
Oct. 1 Commenced business with goods Rs. 40,000
Oct. 3 Cash introduced in the business Rs. 60,000
Oct. 4 Purchased goods from Arul on Credit Rs. 70,000
Oct. 6 Returned goods to Arul Rs. 10,000

Question

(a) Pass Journal entries in the books of Sasikumar who is dealing in automobiles.

2017
Oct. 1 Commenced business with goods Rs. 40,000
Oct. 3 Cash introduced in the business Rs. 60,000
Oct. 4 Purchased goods from Arul on Credit Rs. 70,000
Oct. 6 Returned goods to Arul Rs. 10,000
Oct. 10 Paid cash to Arul's account Rs. 60,000
Oct. 15 Sold goods to Chandar on credit Rs. 30,000
Oct. 18 Chandar returned goods worth Rs. 6,000
Oct. 20 Received cash from Chandar in full settlement Rs. 23,000
Oct. 25 Paid Salaries through ECS Rs. 2,000
Oct. 30 Sasikumar took for personal use goods worth Rs. 10,000

OR

(b) Prepare accounting equation for the following transactions.
(i) Murugan commenced business with cash Rs. 80,000
(ii) Purchased goods for cash Rs. 30,000
(iii) Paid Salaries by cash Rs. 5,000
(iv) Bought goods from Kumar for Rs. 5,000 and deposited the money in CDM
(v) Introduced additional capital of Rs. 10,000

Accepted Answer

>

> [!TLDR]
> (a) Ten journal entries in Sasikumar's books (with a compound discount entry on Oct 20). (b) Accounting equation balancing at Rs. 90,000 (Assets = Liabilities + Capital).
>
> **(a) Journal of Sasikumar**
>
> | Date | Particulars | L.F. | Debit (Rs.) | Credit (Rs.) |
> | --- | --- | --- | --- | --- |
> | 2017 Oct 1 | Stock A/c Dr | | 40,000 | |
> | | To Capital A/c | | | 40,000 |
> | | (Commenced business with goods) | | | |
> | Oct 3 | Cash A/c Dr | | 60,000 | |
> | | To Capital A/c | | | 60,000 |
> | | (Cash introduced into business) | | | |
> | Oct 4 | Purchases A/c Dr | | 70,000 | |
> | | To Arul A/c | | | 70,000 |
> | | (Goods purchased from Arul on credit) | | | |
> | Oct 6 | Arul A/c Dr | | 10,000 | |
> | | To Purchase Returns A/c | | | 10,000 |
> | | (Goods returned to Arul) | | | |
> | Oct 10 | Arul A/c Dr | | 60,000 | |
> | | To Cash A/c | | | 60,000 |
> | | (Cash paid to Arul, settling his account) | | | |
> | Oct 15 | Chandar A/c Dr | | 30,000 | |
> | | To Sales A/c | | | 30,000 |
> | | (Goods sold to Chandar on credit) | | | |
> | Oct 18 | Sales Returns A/c Dr | | 6,000 | |
> | | To Chandar A/c | | | 6,000 |
> | | (Goods returned by Chandar) | | | |
> | Oct 20 | Cash A/c Dr | | 23,000 | |
> | | Discount Allowed A/c Dr | | 1,000 | |
> | | To Chandar A/c | | | 24,000 |
> | | (Cash received from Chandar in full settlement of Rs. 24,000, discount allowed Rs. 1,000) | | | |
> | Oct 25 | Salaries A/c Dr | | 2,000 | |
> | | To Bank A/c | | | 2,000 |
> | | (Salaries paid through ECS) | | | |
> | Oct 30 | Drawings A/c Dr | | 10,000 | |
> | | To Purchases A/c | | | 10,000 |
> | | (Goods taken by proprietor for personal use) | | | |
>
> Note on Oct 20: Chandar owed 30,000 − 6,000 (returns) = 24,000; Rs. 23,000 received in full settlement, so Rs. 1,000 discount is allowed.
>
> **(b) Accounting Equation (Assets = Liabilities + Capital)**
>
> | Transaction | Cash (Rs.) | Stock (Rs.) | = | Creditors (Rs.) | Capital (Rs.) |
> | --- | --- | --- | --- | --

Date	Particulars	Debit (Rs.)	Credit (Rs.)
2017 Oct 1	Stock A/c Dr	40,000
	To Capital A/c		40,000
	(Commenced business with goods)
Oct 3	Cash A/c Dr	60,000
	To Capital A/c		60,000
	(Cash introduced into business)
Oct 4	Purchases A/c Dr	70,000
	To Arul A/c		70,000
	(Goods purchased from Arul on credit)
Oct 6	Arul A/c Dr	10,000
	To Purchase Returns A/c		10,000
	(Goods returned to Arul)
Oct 10	Arul A/c Dr	60,000
	To Cash A/c		60,000
	(Cash paid to Arul, settling his account)
Oct 15	Chandar A/c Dr	30,000
	To Sales A/c		30,000
	(Goods sold to Chandar on credit)
Oct 18	Sales Returns A/c Dr	6,000
	To Chandar A/c		6,000
	(Goods returned by Chandar)
Oct 20	Cash A/c Dr	23,000
	Discount Allowed A/c Dr	1,000
	To Chandar A/c		24,000
	(Cash received from Chandar in full settlement of Rs. 24,000, discount allowed Rs. 1,000)
Oct 25	Salaries A/c Dr	2,000
	To Bank A/c		2,000
	(Salaries paid through ECS)
Oct 30	Drawings A/c Dr	10,000
	To Purchases A/c		10,000
	(Goods taken by proprietor for personal use)

Transaction	Cash (Rs.)	Stock (Rs.)	=	Creditors (Rs.)	Capital (Rs.)
(i) Commenced with cash 80,000	80,000	0	=	0	80,000
(ii) Purchased goods for cash 30,000	50,000	30,000	=	0	80,000

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