Recording of Transactions - 2 — Account STD 11 Commerce — Question

Prepare Bank Reconciliation Statement as on 31st March, 2019 from the following particulars:

1. R's overdraft as per Pass Book ₹ 12,000 as on 31st March.
2. On 30th March, cheques had been issued for ₹ 70,000 of which cheques amounting to ₹ 3,000 only had been encashed up to 31st March.
3. Cheques amounting to ₹ 3,500 had been paid into the bank for collection but of these only ₹ 500 had been credited in the Pass Book.
4. Bank has charged ₹ 500 as interest on overdraft and the intimation of which has been received on 2nd April, 2019.
5. Bank Pass Book shows credit for ₹ 1,000 representing ₹ 400 paid by debtor of Rdirect into the bank and ₹ 600 collected directly by the bank in respect of interest on R's investment. R had no knowledge of these items.
6. A cheque for ₹ 200 has been debited in the bank column of Cash Book by R but it was not sent to the bank at all.

Following balances appeared in the books of Radhika Traders as on 1st April, 2017:
Assets: Cash ₹ 8,000; Cash at Bank ₹ 7,000; Stock ₹ 30,000; Debtors; ₹ 36,000 (Mohan ₹ 10,000; Sohan ₹ 12,000; Dinesh ₹ 14,000); Furniture ₹ 5,000; Building ₹ 25,000.
Liabilities: Creditors− X ₹ 5,000; Y ₹ 6,000.
In April, 2017, the following transaction took place:

2017		₹
April 2	Bought goods of the list price of ₹ 6,000 from Khanna Brothers less 15% trade discount and 2% cash discount and paid 40% price at the same time.
April 3	Received a draft from Mohan in full settlement and deposited it into Bank
April 5	Purchased goods from Suresh of the list price of ₹ 8,000 at 20% trade discount and paid him by cheque.	9,750
April 8	Sold goods and received a cheque	25,000
April 10	Deposited the above cheque into Bank	12,000
April 12	Sohan deposited in our Bank A/c	4,000
April 16	Paid Income Tax by Cheque	5,600
April 20	Received a cheque from Sohan and sent to Bank	7,800
	Discount allowed	200
April 21	Withdrew from Bank−for office	2,000
	for private use	4,000
April 23	Sent a cheque to X in full settlement of his A/c	4,900
April 27	Cheque of Sohan returned by the bank as dishonoured.
April 28	Dinesh was declared insolvent and a payment of 60 paise in a ₹ received from his estate by a Cheque
April 30	Bank allowed Interest	350
	Paid for Rent by cheque	1,500
	Paid for traveling expenses by cheque	500

Pass Journal entries for the above transactions.

On 1st April, 2015, furniture costing ₹ 55,000 was purchased. It is estimated that its life is 10 years at the end of which it will be sold for ₹ 5,000. Additions are made on 1st April 2016 and 1st October, 2018 to the value of ₹ 9,500 and ₹ 8,400 (Residual values ₹ 500 and ₹ 400 respectively). Show the Furniture Account for the first four years, if Depreciation is written off according to the Straight Line Method.

On 1st March, 2019, R accepted a Bill of Exchange of ₹ 20,000 from S payable 3 months after date in full settlement of his dues. On the same day S endorsed the Bill of Exchange to T together with a cheque for ₹ 5,000 in settlement of his debt to the latter. On 2nd March, 2019, T discounted the Bill of Exchange @ 6% p.a. with his bank. On maturity the Bill of Exchange was dishonoured.
Journalise the transactions in the books of R and T.

A Book-keeper finds that the totals of his trial balance disagree by ₹ 2,800. He temporarily debits a Suspense Account with this amount and closes the books. On an examination of the books, the following errors are discovered:
i. The total of Purchase Return Book ₹ 710 was posted Twice.
ii. Goods costing ₹ 800 were distributed as free samples but no entry was passed in the books.
iii. Purchase of Machinery for ₹ 5,600 on credit was recorded in Purchase Book as ₹ 6,500.
iv. Cash Sales to Roshan Gupta for ₹ 1,200 were recorded in Cash Book as well as in Sales Book and were posted from both.
v. Closing Stock has been overvalued by ₹ 1,500 .
vi. Sales Return Book was untotalled, though personal accounts were posted ₹ 1,580 .
vii. No entries have been made in the Cash Book for the Insurance Premium directly paid by bank ₹ 700 and interest charged on overdraft ₹ 320 .
viii. A sum of ₹ 200 for Drawings on the Credit Side of Cash Book was not posted to the Drawings account.
Pass entries to rectify the above errors. Close the Suspense Account already opened.

M/s. P & Q purchased machinery for ₹ 40,000 on 1st October, 2016. Depreciation is provided @ 10% p.a. on the Diminishing Balance. On 31st January, 2019, one-fourth of the machinery was found unsuitable and disposed off for ₹ 5,600. On the same date new machinery at a cost of ₹ 15,000 was purchased. Write up the Machinery account for the years ended 31st March, 2017, 2018 and 2019. Accounts are closed on 31st March each year.

Explain any two of the following Concepts:

1. Money Measurement Concept.
2. Business Entity Concept.
3. Matching Concept.

On 1st February 2018, A sold goods to B for ₹ 40,000 Charging CGST and SGST @ 9% each. B pays ₹ 17,200 in cash and accepted a three months bill for the balance. On the due date, B expressed his inability to meet the bill and offered ₹ 12,000 in cash and to accept a new bill for one month for the balance plus interest at 18% p.a. A agrees to the proposal. On the due date the bill was duly honoured by B. Pass entries in the books of A and B.

Explain Debit and Credit note in five sentences.

Journalise the following transactions of Satish, Noida (UP):

2019		₹
Jan 1	Started business with cash	40,000
Jan 2	Opened Bank Account by cheque from Savings Account	60,000
Jan 3	Bought goods from M/s. S. Singh & Co., Delhi	20,000
Jan 4	Introduced additional capital by cheque	5,000
Jan 4	Purchased computer against cheque from Computer Mart, Noida	15,000
Jan 6	Paid for postage stamps	150
Jan 8	Sold goods for cash	4,000
Jan 9	Sold goods to M/s Sharda & Co., Delhi	10,000
Jan 15	Paid the due amount to M/s S. Singh & Co. after availing discount of ₹ 400
Jan 25	Sold goods to M/s Ray & Co., Kolkata	5,600
Jan 27	Received cheque from M/s Sharda & Co. in full settlement of amount due from them	11,000
Jan 31	Paid for electricity charges	1,000
Jan 31	Paid rent of building by cheque. Half of the building is used by the proprietor for residential use.	5,000
Jan 31	Drew for personal use	3,500