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Illustrations · Illustration 5
Q.

Journalise the following transactions of M/s Time Zone and post them to the ledger accounts:

Date (2017)DetailsAmount (₹)
Dec. 01Business started with cash1,20,000
Dec. 02Opened a bank account with ICICI40,000
Dec. 04Goods purchased for cash12,000
Dec. 10Paid cartage500
Dec. 12Goods sold on credit to M/s Lara India25,000
Dec. 14Cash received from M/s Lara India10,000
Dec. 16Goods returned from Lara India3,000
Dec. 18Paid trade expenses700
Dec. 19Goods purchased on credit from Taranum32,000
Dec. 20Cheque received from M/s Lara India for final settlement and deposited sameday into bank11,500
Dec. 22Goods returned to Taranum1,500
Dec. 24Paid for stationery1,200
Dec. 26Cheque given to Taranum on account20,000
Dec. 28Paid rent by cheque4,000
Dec. 29Drew cash for personal use10,000
Dec. 30Cash sales12,000
Dec. 31Goods sold to M/s Rupak Traders11,000
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Journalise 17 transactions (total ₹3,14,900), including a sales return (₹3,000), a purchase return (₹1,500) and a ₹500 discount allowed on Lara India's final settlement, then post everything to the ledger.

Concept — returns and discount on settlement

Goods returned by a customer are debited to Sales Return A/c; goods returned to a supplier are credited to Purchases Return A/c. When a debtor settles in full for less than the amount due, the shortfall is a discount allowed (an expense), debited to Discount A/c.

Solution — Books of Time Zone, Journal

DateParticularsL.F.Debit (₹)Credit (₹)
2017 Dec. 01Cash A/c Dr.1,20,000
  To Capital A/c1,20,000
(Business started with cash)
Dec. 02Bank A/c Dr.40,000
  To Cash A/c40,000
(Opened a current account with ICICI bank)
Dec. 04Purchases A/c Dr.12,000
  To Cash A/c12,000
(Goods purchased for cash)
Dec. 10Cartage A/c Dr.500
  To Cash A/c500
(Cartage paid)
Dec. 12Lara India A/c Dr.25,000
  To Sales A/c25,000
(Goods sold on credit)
Dec. 14Cash A/c Dr.10,000
  To Lara India A/c10,000
(Cash received from Lara India)
Dec. 16Sales Return A/c Dr.3,000
  To Lara India A/c3,000
(Goods returned from Lara India)
Dec. 18Trade Expenses A/c Dr.700
  To Cash A/c700
(Trade expenses paid)
Dec. 19Purchases A/c Dr.32,000
  To Taranum's A/c32,000
(Goods purchased on credit)
Dec. 20Bank A/c Dr.11,500
Discount A/c Dr.500
  To Lara India A/c12,000
(Cheque received for final settlement)
Dec. 22Taranum's A/c Dr.1,500
  To Purchase Return's A/c1,500
(Goods returned to Taranum)
Dec. 24Stationery A/c Dr.1,200
  To Cash A/c1,200
(Cash paid for stationery)
Dec. 26Taranum's A/c Dr.20,000
  To Bank A/c20,000
(Cheque given to Taranum)
Dec. 28Rent A/c Dr.4,000
  To Bank A/c4,000
(Rent paid by cheque)
Dec. 29Drawings A/c Dr.10,000
  To Cash A/c10,000
(Cash withdrawn for personal use)
Dec. 30Cash A/c Dr.12,000
  To Sales A/c12,000
(Goods sold for cash)
Dec. 31Rupak Trader A/c Dr.11,000
  To Sales A/c11,000
(Goods sold on credit)
Total3,14,9003,14,900

Posting in the Ledger Book

Cash Account

DateParticularsJ.F.Amount (₹)DateParticularsJ.F.Amount (₹)
2017 Dec. 01Capital1,20,0002017 Dec. 02Bank40,000
Dec. 14Lara India10,000Dec. 04Purchases12,000
Dec. 30Sales12,000Dec. 10Cartage500
Dec. 18Trade Expenses700
Dec. 24Stationery1,200
Dec. 29Drawings10,000

Capital Account

DateParticularsJ.F.Amount (₹)DateParticularsJ.F.Amount (₹)
2017 Dec. 01Cash1,20,000

Bank Account

DateParticularsJ.F.Amount (₹)DateParticularsJ.F.Amount (₹)
2017 Dec. 02Cash40,0002017 Dec. 26Taranum's20,000
Dec. 20Lara India11,500Dec. 28Rent4,000

Purchases Account

DateParticularsJ.F.Amount (₹)DateParticularsJ.F.Amount (₹)
2017 Dec. 04Cash12,000
Dec. 19Taranum32,000

Cartage Account

DateParticularsJ.F.Amount (₹)DateParticularsJ.F.Amount (₹)
2017 Dec. 10Cash500

Lara India Account

DateParticularsJ.F.Amount (₹)DateParticularsJ.F.Amount (₹)
2017 Dec. 12Sales25,0002017 Dec. 14Cash10,000
Dec. 16Sales return3,000
Dec. 20Bank11,500
Dec. 20Discount500

Sales Account

DateParticularsJ.F.Amount (₹)DateParticularsJ.F.Amount (₹)
2017 Dec. 12Lara India25,000
Dec. 30Cash12,000
Dec. 31Rupak Traders11,000

Sales Return Account

| Date | Particulars | J.F. | Amount (₹) | Date | Particulars | J.F. | Amount (₹) | …

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