JOURNALISE THE FOLLOWING TRANSACTIONS IN THE BOOKS OF SANJAY GENERAL STORES

2019 June,  

1. Started Business with cash Rs. 50,000, Bank Rs. 1,00,000, Goods worth Rs. 50,000. 
5. Purchased Goods from Mohan on credit Rs.80,000 at 10% Trade Discount. 
9. Sold goods to Urmila Rs. 30,000 at 5% Trade Discount. 
12. Paid into Dena bank Rs.40,000. 
15. Goods worth Rs. 5,000 distributed as free sample. 
22. Paid for Commission Rs. 5,000 to Anand. 
24. Received Rs. 28,000 from Urmila in full settlement of her account by Debit Card. 
29. Paid for Advertisement Rs. 9,000. OR paid for google ads Rs. 9,000 
30. Purchased laptop for Rs. 20,000 @28% GST and amount paid by NEFT. 
 

Solution: 

 

In the books of Sanjay General Stores. 

DATE	PARTICULARS	L/F	DEBIT	CREDIT
2019  June  1	Cash A/c                      Dr.  Bank A/c                      Dr.  Goods A/c                   Dr.            To Capital A/c   [Being Business Started with cash, bank and goods]		50,000  100,000  50,000	2,00,000
5	Purchase A/c               Dr.          To Mohan A/c   [Being Purchased goods from Mohan on credit at 10% Discount]		72,000	72,000
9	Urmila A/c                     Dr.           To Sales A/c   [Being sold goods at 5% trade discount to Urmila]		28,500	28,500
12	Dena Bank A/c             Dr.           To Cash A/c   [Being paid to Dena bank]		40,000	40,000
15	Advertisement A/c       Dr.              To Cash A/c   [Being goods distributed as free sample]		5,000	5,000

 

22	Commission A/c        Dr.            To Cash A/c   [Being paid commission to Anand]		5,000	5,000
24	Bank A/c                  Dr.   Loss A/c                  Dr.         To Urmila A/c   [Being Received cash from Urmila in full settlement]		28,000  500	28,500
29	Advertisement A/c    Dr.             To Cash A/c   [Being paid for advertisement]		9,000	9,000
30	Laptop A/c                 Dr.  Input CGST 14%        Dr.  Input SGST 14%        Dr.           To Bank A/c  [Being purchased laptop @28% GST and paid amount by NEFT]		20,000  2,800  2,800	25,600

 

Explanatory Notes:
1. Started Business with Cash, Bank and Goods. Cash, Bank and goods are the Capital for the Business therefore it is Debited to debit side. And capital account is to be Credited because capital account is a nominal account therefore by nominal account formula credit all income and gain though Capital is an income for the business. 
5. Purchased goods from Mohan on Credit at 10% Trade Discount. Purchase account debit to Mohan account because Mohan is not paying the amount immediately. And Calculation of Trade Discount is on Cash price. Trade Discount is not recorded in the books of accounts. 
 

9. Sold goods to Urmila at 5% T.D. cash account Debit to sales account [Refer Personal account formula]. 

 

12. Paid in to Dena Bank. Dena Bank is a receiver therefore it is Debited to Debit side and proprietor is giving cash to the bank therefore cash account is credited to credit side. 

15.Goods distributed as free sample: Goods distributed as free sample means the proprietor is Advertising the goods in the Market therefore Advertisement account is written in the books of account. Hence Advertisement is an expense therefore it is shown on debit side. And cash is going out of the business Hence it is shown on credit side. 

 

22. Paid commission: Commission account is Debited and Anand account is credited because debit all expense and losses commission are an expense. 
 
24. Received Rs. 28,000 from Urmila in full settlement of her account and paid by debit card. Urmila is paying only Rs. 28,000 therefore Urmila account is Credited to credit side and Business is receiving Cash therefore Cash account is Debited. But in Transaction 9 Urmila must pay us Rs. 28,500 now she is paying only Rs. 28,000. We assume that proprietor has given discount of Rs.500 to Urmila therefore discount account is to be debited to debit side. 
 
29. Paid for Advertisement. [Refer Transaction 15].  

  

OR paid for google ads: This is an addition by us, now business is going for paid google ads which can advertise globally. For this Entry would be Advertisement A/c Dr. and Credit to Bank A/c because google ads are paid online through their campaign. 
 
30. Purchased Laptop @28% GST and amount paid by NEFT. Laptop account is debited and CGST and SGST are also debited to debit side because Laptop is coming into business & GST is an expense for Business. And Bank account is credited because amount is paid by NEFT [National Electronic Fund Transfer]. NEFT refers to national electronic fund transfer. 
 
 

Calculations: 

5. 80,000 *10/100 = 8,000 

     = 80,000 - 8,000 = 72,000 

 

9. 30,000 *5/100 = 1,500 

    = 30,000 - 1,500 = 28,500 

 

30. 20,000 *28/100 = 5,600 

                 GST ---- CGST 14% = 2,800 

GST ---- SGST 14% = 2,800  

 

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

JOURNALISE THE FOLLOWING TRANSACTIONS IN THE BOOKS OF SANJAY GENERAL STORES