Journalize the following transactions in the books of Harbhajan & Co. for the month of 1st April 2019

Balance on 1st April 2019 

Cash in Hand Rs.35,000, Cash at Bank Rs.25,000, Furniture Rs.1,50,000, Laptop Rs.1,00,000, 
Debtors: Sangita Rs.40,000, Viru Rs.30,000. 

2019 

Creditors: Ganesh Rs.10,000, Garima Rs.40,000, Bank Loan Rs.50,000. 

April  1. Purchased goods from Ajay Kumar worth Rs.2,50,000 at 10% Trade Discount @18% GST and paid 1/4 amount in Cash. 
5. Purchased Shares of Infosysis Company Rs.50,000 and Rs.500 paid as brokerage by Demat A/c. 
8. Sold goods to Raj worth Rs.90,000 at 10% Trade Discount and 1/3 amount received by cash and 5% cash discount is allowed. 
12. Paid house rent of proprietor Rs.9,000 and office rent Rs.5,000. 
15. Purchased Laptop of Rs.60,000 @18% GST and paid by cheque. 
20. Paid transport charges on the above Laptop Rs.1,000 @18% GST. 
25. Paid Commission Rs.20,000 to Ram. 
26. Paid Telephone Charges Rs.1,000. 
28. Transferred from private Bank A/c of proprietor to Business Bank A/c Rs.40,000 by cheque. 
30. Exchanged our Furniture of Rs.30,000 against a Motor car of the same value for business. 

Solution: 

In the books of Harbhajan & Co. for the month of 1st April 2019. 

DATE	PARTICULAR	L/F	DEBIT	CREDIT
2019 April 1	Cash in hand A/c             Dr.  Cash at Bank A/c             Dr.  Furniture A/c                   Dr.  Laptop A/c                     Dr.  Debtors: Sangita                  Viru             To Creditor: Ganesh                                    Garima             To Bank Loan A/c  [Being balance brought forward from last year]		35,000  25,000  1,50,000  1,00,000  40,000  30,000	10,000  40,000  50,000
1	Purchase A/c                   Dr.  Input CGST 9%                Dr.  Input SGST 9%                Dr.             To Cash A/c             To Ajay Kumar A/c   [Being Purchased goods from Ajay Kumar at10% T.D. @18% GST and paid ¼ amount in Cash]		2,25,000  20,250  20,250	1,99,125 66,375
5	Share A/c                     Dr.  Bank A/c                      Dr.            To Bank A/c             To Brokerage A/c  [Being purchased share of Infosysis Co. And paid brokerage]		50,000  500	50,000  500
8	Raj A/c                         Dr.  Cash A/c                      Dr.  Discount allow A/c    Dr.              To Sales A/c  [Being sold goods to Raj at 5% C.D and 1/3 amount received by cash]		27,000  51,300  2,700	81,000

12	Drawing A/c               Dr.  Office Rent A/c          Dr.             To Cash A/c   [Being Paid house rent of proprietor and office rent]		9,000  5,000	14,000
15	Laptop A/c                     Dr.  Input CGST @9%          Dr.  Input SGST @9%           Dr.              To Bank A/c   [Being purchased laptop @18% GST by Cheque]		60,000  5,400  5,400	70,800
20	Transport Charges A/c     Dr.  Input CGST 9%             Dr.  Input SGST 9%           Dr.              To Cash A/c  [Being paid for transport charges on laptop @18% GST]		1,000  90  90	1,180
25	Commission A/c                 Dr.             To Ram A/c  [Being Paid Commission to ram]		20,000	20,000
26	Telephone Charges A/c      Dr.             To Cash A/c  [Being paid telephone charges]		1,000	1,000
28	Bank A/c                       Dr.            To Capital A/c  [Being Transferred from private Bank A/c of proprietor to business bank]		40,000	40,000
30	Purchase A/c                   Dr.  Input CGST 6%                Dr.  Input SGST 6%                Dr.             To Bank A/c   [Being Bought goods @12% and paid By Cheque]		1,50,000  9,000  9,000	1,68,000
30	Motor Car A/c                Dr.            To Furniture A/c   [Being Exchanged our Furniture against a Motor car]		30,000	30,000

Explanatory Notes:

28. Transferred from private Bank A/c of proprietor to business Bank A/c Rs.40,000.

The above Transaction is Cash are transferred from proprietor personal bank account to the Business current account which means business Bank account is receiving the Cash therefore Bank account is debited to Debit Side. On Credit Side Capital account because the proprietor transferred Cash to the business Bank from his own bank account which means proprietor introducing the Cash into the business.

30. Exchanged our Furniture of Rs.30,000 against a Motor car of the same value for business.

Motor car is purchased in term of exchanging of Furniture at same price non of amount is paid in this transaction. On Debit Side Motor car account because Motor car is an Asset for the business therefore by real account formula Debit what comes in. And On Credit Side Furniture account because Furniture is going out from the business by real account formula Credit what goes out.

Calculation:

1. Purchased goods from Ajay Kumar worth Rs.2,50,000 at 10% Trade Discount @18% GST and paid 1/4 amount in Cash Calculation:

10% T.D - 2,50,000 *10/100 = 25,000

    GST 18% - 2,25,000 *18/100 = 40,500

    CGST 9% - 2,25,000 *9/100 = 20,250

    SGST 9% - 2,25,000 *9/100 = 20,250

    1/4 by Cash - 2,65,500/4 = 66,375

8. Sold goods to Raj worth Rs.90,000 at 10% Trade Discount and 1/3 amount received by cash and 5% cash discount is allowed Calculation:

10% T.D. - 90,000 *10/100 = 9,000

    5% C.D. - 81,000 *5/1000 = 4,050

    1/3 by Cash - 76,950/3 = 25,650

15. Purchased Laptop of Rs.60,000 @18% GST and paid by cheque Calculation:

GST 18% - 60,000 *18/100 = 10,800

      CGST 9% - 60,000 *9/100 = 5,400

      SGST 9% - 60,000 *9/100 = 5,400 

20. Paid transport charges on the above Laptop Rs.1,000 @18% GST Calculation:

GST 18% - 1,000 *18/100 = 180

      CGST 9% - 60,000 *9/100 = 5,400

      SGST 9% - 60,000 *9/100 = 5,400

30. Exchanged our Furniture of Rs.30,000 against a Motor car of the same value for business Calculation:

GST 12% - 1,50,000 *12/100 = 18,000

      CGST 6% - 1,50,000 *6/100 = 9,000

      SGST 6% - 1,50,000 *6/100 = 9,000

Conclusion: 

Starting with a well-balanced financial position on 1 April 2019, the business performed dynamically:

A strategic purchase from Ajay Kumar, with a combination of trade concessions and GST, shows economic acumen.

Diversification of financial instruments including purchase of Infosys company shares and brokerage payments through demat account.

Sales to Raj, with a mix of trade discounts, cash receipts and cash discounts, reflect customer-centric strategies.

Operational expenses including house rent, office rent and commission payments, ensuring smooth business operations.

Taking laptop with careful payment methods for additional charges and complying with GST norms.

A strategic financial maneuver, including the exchange of furniture for motor cars, aligns assets with business needs.

Prudent financial management including transferring money and paying routine expenses like telephone charges.

Journalize the following transactions in the books of Harbhajan & Co. for the month of 1st April 2019.

3 Gold Rule of  Accounting.

Personal Account: 1. Debit The Receiver.

                               2. Credit The Giver.

Real Account: 1. Debit What Comes In.

                        2. Credit What Goes Out.

Nominal Account: 1. Debit All Expenses And Losses.
                               2. Credit All Income And Gain.

Chapter 4, Ledger Solution