Gagan started Business on 01-OCT-2012 and following events occurred in the month of OCTOBER. 1.

Gagan commenced business with Rs. 100,000. 2. Purchased goods from Mr. Abhishek Rs. 1000 for cash. 3. Purchased goods from Mr. Ankit Rs. 2000 on Credit. 4. Paid Cash Rs. 800 to Mr. Ankit on account. 5. Returned goods worth Rs. 100 to Mr. Ankit. 6. Purchased furniture from Mr. Anil Rs. 3000 on Credit. 7. Purchased machinery for cash Rs. 500. 8. Returned machinery due to a serious defect in the design. 9. Sold goods to Mr. Jitender Rs. 15,000 for cash 10. Sold goods to Mr. Akhtar Rs. 9000 for credit 11. Received cash Rs. 4000 from Mr. Akhtar on account. 12. Mr. Akhtar returned goods worth Rs. 500. 13. Mr. Jitender returned defective goods worth Rs. 1000. 14. Paid Salary Rs. 7000 to Accountant. 15. Paid Landlord, office rent Rs. 5000 16. Paid wages Rs. 1500 17. Received interest on bank deposit Rs. 1200 18. Withdrawn cash Rs. 1000 for personal expenses. 19. Borrowed Bank Loan of Rs. 10,000 20. Deposited cash into bank Rs. 5,000. 21. Withdrawn from bank for office use Rs. 1,000. 22. Paid Mr. Ankit on account by cheque Rs. 200 23. Received Cheque from Mr. Akhtar on Account Rs. 3,000 24. Deposited the above cash into bank.

JOURNAL ENTRIES SL.NO 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 DESCRIPTION Cash A/c To Capital Purchases A/c To Cash Purchases A/c To Ankit Ankit To Cash Ankit To Purchases Returns Furnitures A/c To Anil Machinery A/c To Cash Cash A/c To Machinery Cash A/c To Sales Akhtars A/c To Sales Cash A/c To Akhtar Sales Returns A/c To Akhtar Sales Returns A/c To Cash Salary A/c To Cash Rent A/c To Cash Wages A/c To Cash Cash A/c To Interest Drawings A/c To Cash Cash A/c To Bank Loan Bank A/c To Cash Cash A/c To Bank Ankits A/c To Bank NATURE OF ACCOUNT Asset Capital Expense Asset Expense Liability Liability Asset Liability Expense Asset Liability Asset Asset Asset Asset Asset Revenue Asset Revenue Asset Asset Revenue Asset Revenue Asset Expense Asset Expense Asset Expense Asset Asset Revenue Capital Asset Asset Liability Asset Asset Asset Asset Liability Asset DR (IN USD) 100000 1000 1000 2000 2000 800 800 100 100 3000 3000 5000 5000 5000 5000 15000 15000 9000 9000 4000 4000 500 500 1000 1000 7000 7000 5000 5000 1500 1500 1200 1200 1000 1000 10000 10000 5000 5000 1000 1000 200 200 CR (IN USD) 100000

23 24

Cash A/c To Akhtar Bank A/c To Cash

Asset Asset Asset Asset

3000 3000 3000 3000

Posting of the Journal entries to their respective accounts in the ledger.

CAPITAL ACCOUNT Dr. To Balance Total USD Cr. 100000 By Cash 100000 Total USD 100000 100000

CASH ACCOUNT Dr. To Capital To Machinery To Sales To Akhtar To Interest To Bank Loan To Bank To Akhtar USD 100000 5000 15000 4000 1200 10000 1000 3000 Cr. By Purchases By Ankit By Machinery By Sales Returns By Salary By Rent By Wages By Drawings By Bank By Bank USD 1000 800 5000 1000 7000 5000 1500 1000 5000 3000 108900 139200

Total

By Balance 139200 Total

PURCHASES ACCOUNT Dr. To Cash To Ankit Total USD Cr. 1000 By Balance 2000 3000 Total ANKITS ACCOUNT Dr. To Cash To Purchases Returns To Bank To Balance Total USD Cr. 800 By Purchases 100 200 900 2000 Total USD 2000 USD 3000 3000

2000

PURCHASES RETURNS ACCOUNT Dr. To Balance Total USD Cr. 100 By Ankit 100 Total USD 100 100

FURNITURES ACCOUNT Dr. To Anil Total USD Cr. 3000 By Balance 3000 Total ANILS ACCOUNT Dr. To Balance Total USD Cr. 3000 By Furnitures 3000 Total USD 3000 3000 USD 3000 3000

MACHINERY ACCOUNT Dr. To Cash Total USD Cr. 5000 By Cash 5000 Total USD 5000 5000

SALES ACCOUNT Dr. To Balance Total USD Cr. 24000 By Cash By Akhtar 24000 Total AKHTARS ACCOUNT Dr. To Sales USD Cr. 9000 By Cash By Sales Returns By Cash By Balance 9000 Total USD 4000 500 3000 1500 9000 USD 15000 9000 24000

Total

SALES RETURNS ACCOUNT Dr. To Akhtar To Cash Total USD Cr. 500 By Balance 1000 1500 Total USD 1500 1500

SALARY ACCOUNT Dr. To Cash Total USD Cr. 7000 By Balance 7000 Total USD 7000 7000

RENT ACCOUNT Dr. To Cash Total USD Cr. 5000 By Balance 5000 Total USD 5000 5000

WAGES ACCOUNT Dr. To Cash Total USD Cr. 1500 By Balance 1500 Total USD 1500 1500

INTEREST ACCOUNT Dr. To Balance Total USD Cr. 1200 By Cash 1200 Total USD 1200 1200

DRAWINGS ACCOUNT Dr. To Cash Total USD Cr. 1000 By Balance 1000 Total USD 1000 1000

BANK LOAN ACCOUNT Dr. To Balance Total USD Cr. 10000 By Cash 10000 Total USD 10000 10000

BANK ACCOUNT Dr. To Cash To Cash Total USD Cr. 5000 By Cash 3000 By Ankit By Balance 8000 Total USD 1000 200 6800 8000

TRIAL BALANCE FOR THE MONTH OF OCTOBER-2012 A Asset, L Liability, C Capital, R Revenue, E Expense
SL. No 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 ACCOUNT TITLE Capital (C) Cash (A) Purchases (E) Ankit (L) Purchases Returns (E) Furnitures (A) Anil (L) Machinery (A) Sales (R) Akhtar (A) Sales Returns Account (R) Salary (E) Rent (E) Wages (E) Interest (R) Drawings (C) Bank Loan (L) Bank (A) TOTAL DEBIT 108900 3000 900 100 3000 0 1500 1500 7000 5000 1500 1200 1000 10000 6800 139200 139200 3000 0 24000 CREDIT 100000

Trading Account for the year ending 31-MAR-2013

Dr. Purchases Less: Returns Wages To Gross Profit c/d Total 3000 100 USD Cr. Sales 2900 Less: Returns 1500 18100 22500 Total USD 24000 1500 22500

22500

Profit and Loss Account For the year ending 31-MAR-2013

Expenses Salary (E) Rent (E) To Profit Total USD Revenue 7000 By Gross Profit b/d 5000 Interest 7300 19300 Total USD 18100 1200

19300

Balance Sheet as on 31-MAR-2013

Liabilities Capital Add: Profit Less: Drawings Sundry Creditors Bank Loan Payables Total 100000 7300 1000 USD Assets Furniture Sundry Debtor 106300 Cash in Hand 3900 Cash at Bank 10000 120200 Total USD 3000 1500 108900 6800

120200