Illustration 15 (Comprehensive). Journalise the following transactions:
(i) Mr. Peter started business with cash ₹ 1,00,000 and a building valued at ₹ 5,00,000.
(ii) Purchased goods amounting to ₹ 2,00,000 out of which goods of 1,80,000 were purchased on credit from D. Lal.
(iii) Sold goods on credit to Ramesh ₹ 1,60,000.
(iv) Received cheque for ₹ 1,56,000 from Ramesh in full settlement of his account.
(v) Paid ₹ 1,78,000 to D. Lal in full settlement of ₹ 1,80,000 due to him by cheque.
(vi) An old machine with the book value of ₹ 80,000 is exchanged for a new machine of ₹ 2,40,000. The old machine is valued at ₹ 50,000 for exchange purposes by Machine Tools Ltd.
(vii) Purchased a machinery from Pele & Sons for ₹ 50,000 on credit.
(viii) Depreciation of ₹ 5,000 was provided on the machinery at the end of the year.
(ix) Paid income tax ₹ 5,000.
(x) A cheque from a customer amounted to 5,000 deposited in the bank was returned dishonoured.
Solution:
In the Books of Mr. Peter
JOURNAL
* It is assumed the cheque was deposited into bank on the same day.
**The old machine should be credited with the book value and not the exchange value in order to cancel the Old Machine Account.
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