# Problems and Solutions of Journal Entries

Solution of Journal Entries with Problems of Account for class 11 and Bachelor Level Students. It is a complete solution to possible Questions that may be asked in the board examination.

 Previous Solution: Accounting Equations Next Solution: Solution of Subsidiary Book

## Problem 1:

Consider the following transaction

January 1: Started business with cash of 50000, Furniture of 25000, and stock of 20000

January 5: Purchased goods costing 200000

January 7: Purchased goods on credit from Mr. Bhatta 50000

January 9: Purchased goods for cash 50000 and credit for 10000

January 10: Sold goods for cash 150000

January 11: Sold goods to Mr. Shrestha 35000

January 14: Sold goods on credit 7000

January 18: Sold goods (costing 5000) for cash 2000 and on credit to Mr. Acharya 3500

Required: Journal Entries

Journal Entries

 Date Particular L. F. Debit Credit Jan 1: Cash a/c  Dr. 50000 Furniture a/c Dr. 25000 Stock a/c Dr. 20000 To capital a/c 95000 (Being started business with cash, furniture, and stock) Jan 5: Purchase a/c Dr. 200000 To cash a/c 200000 (Being purchased goods on cash) Jan 7: Purchase a/c Dr. 50000 To Mr. Bhatta a/c 50000 (Being purchased goods on credit from Mr. Bhatta) Jan 9: Purchased a/c Dr. 60000 To cash a/c 50000 To creditors a/c 10000 (Being purchased goods on cash and credit) Jan 10: Cash a/c Dr. 150000 To sales a/c (Being sold goods on cash) 150000 Jan 11: Mr. Shrestha a/c Dr. 35000 To sales a/c 35000 (Being sold goods on credit to Mr. Shrestha) Jan 14: Debtors a/c Dr. 7000 To sales a/c 7000 (Being sold goods on credit) Jan 18: Cash a/c Dr. 2000 Mr. Acharya a/c Dr. 3500 To sales a/c (Being sold goods for cash and on credit to Mr. Acharya) 5500 Total 602500 602500

## Problem 2:

Journalized the transactions given below in the books of Makalu Traders.

2019

April 1. Makalu started the business with 200000. Makalu opens an account with bank deposits of 180000

2. Makalu Purchased furniture 8500 and a computer 2500. Payment made by cheque

3. Goods purchased from M / s Basu & Co. for cash of 15000 and on credit of 30000

4. Goods sold for cash 25000 to M / s Arbind & Co.

5. Paid to M/s Basu for full settlement and allowed a discount of 1000

6. Goods sold for cash 10000 and on credit 25000 to M/s Asha Traders.

7. Received a cheque for 24500 from M/s Asha Traders for full settlement

8. Received a bill for two table fans, 4400 from M/ s Ugratara Electrics goods supplier.

9. One fan was stolen

Journal Entries

 Date Particular L.F. Debit Credit 2064 Cash a/c Dr. 200000 April 1 To capital a/c 200000 (Being started business with cash) 1 Bank a/c Dr 180000 To Cash a/c 180000 (Being cash deposited in the bank) 2 Furniture a/c Dr 8500 Office Equipment a/c Dr 25000 To bank a/c 33500 (Being purchased furniture and computer and payment made through cheque) 3 Purchased a/c Dr 45000 To Cash a/c 15000 To M/s Basu & Co. a/c 30000 (Being goods purchased for cash and on credit from M/s Basu and CO 4 Cash a/c Dr 25000 To Sales a/c 25000 (Being goods sold for cash to M/s Arbind & Co.) 5. M/s Basu a/c Dr 30000 To Cash a/c 29000 To Discount a/c 1000 (Being paid cash to M/s Basu for full settlement and received discount) 6. Cash a/c Dr. 10000 M/S Asha Traders a/c Dr 25000 To Sales a/c 35000 (Being goods sold to M/s Asha Traders for cash and on credit) 7. Cash a/c Dr. 24500 Discount a/c Dr. 500 To M/S Asha Traders a/c 25000 (Being a cheque received from M/s Asha Traders for full settlement) 8. Office Equipment a/c 4400 To M/s Ugratara Electrics Suppliers 4400 (Being purchased two table fans from M/s. Ugratara Electrics Goods Suppliers on credit) 9. Loss by theft a/c To Office Equipment a/c (Being stolen of one table fan) Total 580100 580100

## Problem 3:

The following transactions are given

May      1: Business started with cash of 15000

2: Goods purchased for cash 5000

3: Purchased goods from Mr. Agrawal 1000

5: Paid to Mr. Agrawal 1000

9: Paid for postage 120

11: Deposited into bank 7000

14: Sold goods on credit to Ram 1500

15: Received cash from Ram 1000

19: Paid telephone charges of 60

24: Purchased Furniture 30000

29: Cash sales 900

31: Paid salaries for the month of 150

31: Purchase government securities 500

31: Paid for advertising by cheque 150

Required:  Journal Entries

Journal Entries

 Date Particular L.F. Debit Credit May 1 Cash a/c Dr. 15000 To capital a/c 15000 (Being started business with cash) 2 Cash a/c Dr. 5000 To sales a/c 5000 (Being goods purchased for cash) 3 Purchased a/c Dr. 1000 To Mr. Agrawal a/c 1000 (Being purchased goods from Agrawal) 5 Mr. Agrawal a/c Dr. 1000 To cash a/c 1000 (Being cash paid to Mr. Agrawal) 9 Postage a/c Dr. 120 To cash a/c 120 (Being paid for postage) 11 Bank a/c Dr. 7000 To cash a/c 7000 (Being cash deposited into the bank) 14 Ram a/c Dr. 1500 To sales a/c 1500 (Being sold goods on credit from Ram) 15 Cash a/c Dr. 1000 To Ram a/c 1000 (Being cash received from Ram) 19 Telephone expenses a/c Dr. 60 To cash a/c 60 (Being cash paid for telephone expenses) 24 Furniture a/c Dr. 30000 To cash a/c 30000 (Being purchased furniture) 29 Cash a/c Dr. 900 To sales a/c 900 (Being gold sold for cash) 30 Ram a/c Dr. 500 To cash a/c 500 (Being cash received for cash) 31 Salaries a/c Dr. 150 To cash a/c 150 (Being the payment of salaries) 31 Government securities a/c 500 To cash a/c 500 (Being government securities purchased) 31 Advertising a/c Dr. 150 To Bank a/c 150 (Being paid for advertising by cheque) Total 77380 77380

## Problem 4:

Pass the journal entries for the following transaction

 Aug. 1 Started business with cash 190000 Aug. 3 Bought goods: For cash 5000 From Karan 5000 From Janak 5000 Aug. 10 Paid wages 100 Paid Karan 2000 Paid Janak 5000 Aug. 14 Sold goods for cash (Cost 5000) 6000 Aug. 16 Sold goods to Rabin (Cost 3000) 2500 Aug. 18 Sold goods to Gopal on credit 3500 Aug. 20 Cash received from Rabin in full settlement 2400 Aug. 31 Bought furniture 1000 Paid for repairs 250

Journal Entries

 Date Particular L. F. Debit Credit Aug. 1 Cash a/c Dr. 190000 To capital a/c 190000 (Being started business with cash) Aug. 3 Purchased a/c Dr. 15000 To cash a/c 5000 To Karan a/c 5000 To Janak a/c 5000 (Being purchased goods on cash and from Karan, and Janak on credit) Aug. 10 Wages a/c Dr. 100 Karan a/c Dr. 2000 Janak a/c Dr. 5000 To cash a/c 7100 (Being cash paid for Wages, Karan, and Janak) Aug. 14 Cash a/c Dr. 6000 To sales a/c 6000 (Being sales goods on cash) Aug. 16 Rabin a/c Dr. 2500 To sales a/c 2500 (Being sold goods to Rabin) Aug. 18 Gopal a/c Dr. 3500 To sales a/c 3500 (Being goods sold to Gopal on credit) Aug. 20 Cash a/c Dr. 2400 Discount a/c Dr. 100 To Rabin a/c 2500 (Being cash received from Rabin and discount allowed to him) Aug. 31 Furniture a/c Dr. 1000 Repairs a/c Dr. 250 To cash a/c 1250 (Being cash paid for furniture and repair) Total 227850 227850

## Problem 5:

Journalize the following transactions:

a.       Commencement of business with cash 50000

b.       Purchased goods on credit from Kiran for 25000

c.       Received 975 from debtor Mrs. Rita and allowed a discount of 25

d.       A piece of furniture costing 1500 has been sold for 1200 incurring a loss of 300

e.       Received goods returned by Mr. Bharat as being not according to order 1000

f.        Paid installation charge of 900

g.       Amount due from Hira 1000 has been written off as bad debts.

h.       Unused furniture was disposed of for 2700

i.         Allowed discount of 500 to Mr. Varun

j.         Received a loan of 3000 from a bank.

Journal Entries

 Date Particular L.F. Debit Credit a. Cash a/c Dr. 50000 To capital a/c 50000 (Being commencement of business with cash) b. Purchase a/c Dr. 25000 To Kiran a/c 25000 (Being purchased goods on credit from Kiran) c. Cash a/c Dr. 975 Discount a/c Dr. 25 To Mrs. Rita a/c 1000 (Being cash received from Mrs. Rita and allowed a discount) d. Cash a/c Dr. 1200 Loss on sales of furniture a/c 300 To furniture a/c 1500 (Being furniture has been sold incurring a loss) e. Bharat a/c Dr. 1000 To purchase return a/c 1000 (Being goods returned by Mr. Bharat as being not according to order) f. Installation charged a/c Dr. 900 To cash a/c 900 (Being paid installation charge) g. Bad debts a/c Dr. 1000 To Hira a/c 1000 (Being amount due from Hira has been written off as bad debts.) h. Cash a/c Dr. 2700 To furniture a/c 2700 (Being unused furniture were disposed) i Discount a/c Dr. 500 To Mr. Varun a/c 500 (Being discount allowed to Mr. Varun) j. Cash a/c Dr. 3000 To loan a/c 3000 (Being received loan from a bank) Total 86600 86600

## Problem 6:

Give journal entries for the following:

a.       Goods worth 1000 were lost by the accident, and the insurance company admitted no claim.

b.       Peon stole cash 5000 and the insurance company admitted for only 3500

c.       A fire broke into the business and goods worth 10000 were lost. The insurance company admitted the full claim.

d.       Received claim from a customer for 1000 for late supply. Claim admitted for 6000

Journal Entries

 Date Particular L.F. Debit Credit a Goods lost by accident a/c Dr. 1000 To purchase a/c 1000 (Being lost of goods by accident and no claim is admitted by an insurance company) b Loss of cash by theft a/c Dr. 1500 Insurance receivable a/c Dr. 3500 To Cash a/c 5000 (Being cash stolen by peon and insurance company admitted partial claim) c Insurance receivable a/c Dr. 10000 To Purchase a/c 10000 (Being goods lost by fire and the insurance company admitted the full claim) d Debtor a/c Dr. 600 To Cash a/c 600 (Being late supply to the customer and claim received) Total 16600 16600

## Problem 7:

Consider the following transaction

a.       Paid cash for life insurance premium of a proprietor 12000

d.       Received cash for previously recorded outstanding commission

f.        Sold old computer having book value 20000 on credit for 19000

g.       Withdrew cash from bank 15000 for personal use

h.       Paid salary 25000 by cheque, and still due 10000

j.         Paid for salary outstanding 10000

k.       A bad debt of 5000 recovered which was previously written off.

Journal Entries

## Problem 8:

You are given the following information:

a. Interest 250 charged by the bank.

b. Salaries paid to clerk 4000

C. Furniture purchased for 4000 in January is valued at 3600 at the end of December

d. Old equipment having a book value of 9000 was sold for 8000

f. Sold old furniture having a book value of 3600 at 4000

g. Outstanding salary for the last month of the last fiscal year, 5000 now paid

h. Provide 5 percent interest on capital. The amount of capital is 100000

Required: Journal Entries

Journal Entries

 Date Particular L.F. Debit Credit a Interest on Loan a/c Dr. 250 To Loan a/c 250 (Being lost of goods by accident and no claim is admitted by an insurance company) b. Salaries a/c Dr. 4000 To Cash a/c 4000 (Being salaries paid to clerk) c. Depreciation a/c Dr. 400 To Furniture a/c 400 (Being depreciation charged on furniture) d. Cash a/c Dr. 8000 Loss a/c Dr. 1000 To equipment a/c 9000 (Being sold old equipment for cash at a loss) e. Cash a/c Dr. 5000 To Unearned Commission a/c 5000 (Being commission received in advance) f. Cash a/c Dr. 4000 To Furniture a/c 3600 To Profit and Loss a/c 400 (Being furniture sold for cash at a profit) g. Outstanding Salary a/c Dr. 5000 To Cash a/c 5000 (Being outstanding salary paid for cash) h. Interest on capital a/c Dt. 5000 To Capital a/c 5000 (Being interest on capital provided @ 5% of capital)

## Problem 9:

Pass journal entries for the following transaction

a.       Provide depreciation on Furniture 1500 and Machinery 3500

b.       A customer of 4000 was declared insolvent and entire amount receivable from him written off as bad debts

d.       Paid 4000 and 20000 for wages and salary respectively.

e.       Purchased furniture for 16000 for the proprietor and paid the amount by cheque.

Journal Entries

 Date Particular L.F. Debit Credit a. Depreciation a/c Dr. 1000 To Furniture 1000 To Machinery a/c (Being depreciation charged on machinery and furniture) b. Bad Debt a/c Dr. 4000 To Debtor's a/c 4000 (Being bad debt written off) c. Cash a/c Dr. 3150 To Bad debts recovered a/c 3150 (Being bad debt recovered) d. Wages a/c Dr. 4000 Salary a/c Dr. 20000 To Cash a/c 24000 (Being wages and salary paid) e. Drawings a/c Dr. To Bank a/c (Being furniture purchased for private use and paid by cheque)

## Problem 10:

Journalize the following transaction

a.       Commenced business with cash 50000

b.       Bought machinery of 10000 and paid immediately by cheque

c.       Paid for installation charge in machinery 400

Journal Entries

 Date Particular L.F. Debit Credit a Cash a/c Dr. 50000 To capital a/c 50000 (Being a business started with cash) b Bank a/c Dr 40000 To Cash a/c 40000 (Being cash deposited into a bank) c Machinery a/c Dr. 10000 To Bank a/c 10000 (Being recorded the purchase of machinery and payment made by cheque) d Machinery a/c Dr 400 To cash a/c 400 (Being installation charges paid on machinery)

## Problem 11:

For the following transactions given, prepare journal entries.

March 1: Purchased goods for cash 5000 and on credit for 10000

March 3: Sold goods on account for 5000

March 5: Received a cheque from the debtor 4900 for full settlement of his account

March 10: Paid 8000 to the creditor for full settlement of his account

March 11: Goods worth 20000 sold on credit to Shital for 23000

March 14: A cheque received from Shital of 5000 was deposited in the bank

March 17: Shital's cheque was dishonored and returned to her.

March 21: Bank charged 200 for the service charge.

Journal Entries

 Date Particular L.F. Debit Credit March Purchased a/c Dr 15000 1 To cash a/c 5000 To credit a/c 10000 (Being purchased goods for cash and on credit) March Debtors a/c Dr. 3 To sales a/c 5000 (Being sold goods on account) 5000 March Bank a/c Dr 4900 5 Discount a/c Dr 100 To debtor a/c 5000 (Being cheque received from a debtor for full settlement of his account) March Creditors a/c Dr 10000 10 To cash a/c 8000 To Discount a/c 2000l (Being paid to the creditor for full settlement of his account) March Shital's a/c Dr 23000 11 To sales a/c 23000 (Being goods sold on credit to Shital) March Bank a/c Dr 5000 14 To cash a/c 5000 (Being cheque received from Shital deposited in the bank) March Shital a/c Dr 5000 17 To Bank a/c 5000 (Being Shital's cheque was dishonored and returned to her) March A service charge of bank a/c Dr 200 21 To bank a/c 200 (Being Bank charged for service charge)

## Problem 12:

Journalize the following transactions

July 1: Started business by depositing cash into bank 250000

July 3: Purchased goods for 15000; giving a cheque of 5000 and balance on a credit

July 6: Sold goods (costing 3000) for cash 2000

July 10: Fire occurred and destroyed goods costing 1500

Journal Entries

 Date Particular L.F. Debit Credit July Bank a/c Dr. 250000 1 To capital a/c 250000 (Being started business with depositing cash into the bank) July Purchase a/c Dr 15000 3 To bank a/c 5000 To creditors a/c 10000 (Being purchased goods and giving cheque and rest balance on credit) July Cash a/c Dr 2000 6 Loss on sales of goods a/c Dr 1000 To sales a/c 3000 (Being sold goods for cash at loss) July Destroyed goods by fire a/c Dr 1500 10 To purchase a/c 1500 (Being fire occurred and destroyed goods)

## Journalizing Bills of Exchange

### Problem 13:

The following transactions are given to you:

a.       Ram sold goods on credit to Shyam for 25000

b.       Ram received an accepted bill drawn to Shyam for 2 months.

c.       Shyam paid the due amount of the bill on the due date.

d.       Ram purchased goods on credit from Mahesh for 30000

e.       Ram accepted the bill for 3 months drawn to him and returned to Mahesh.

f.        On the due date Ram paid for the bill discounted by Mahesh after a month of issue of the bill

Required: Journal entries in the book of Ram

Journal Entries

 Date Particular L.F. Debit Credit a. Shyam's a/c Dr 25000 To Ram's a/c 25000 (Being goods sold on credit to Ram) b. Bills Receivable a/c Dr 25000 To Shyam's a/c 25000 (Being received accepted bills from Shyam for 2 months) c. Cash a/c Dr 25000 To Bills Receivable a/c 25000 (Being cash received from Shyam on bills on due date) d. Purchased a/c Dr 30000 To Mahesh 30000 (Being goods purchased on credit from Mahesh) e. Mahesh a/c Dr 30000 To Bills payable a/c 30000 (Being accepted of bills drawn by Mahesh for 3 months) f. Bills Payable a/c Dr 30000 To Cash a/c 30000 (Being cash paid on bills on due date)

### Problem 14:

Consider the following transaction of Bishal

April 15: Sold goods to Mohan of 18000

April 15: Bills drawn for 2 months and accepted by Mohan

April 20: The bill endorsed to Rajesh

June 18: The bill was honored.

Required:  Entries in the books Bishal and Mohan

Journal Entries in the books of Bishal

 Date Particular L.F. Debit Credit April Mohan's a/c Dr 18000 15 To sales a/c 18000 (Being goods sold to Mohan) April Bills receivable a/c Dr 18000 15 To Mohan's a/c 18000