Reference no: EM132671593
Problem - Prepare Journal entries of the following transactions of a hypothetical business organization:
a) The owner transfers a sum of Rs. 5 million from personal bank account to business account.
b) He pays Rs. 200,000 as deposit, and Rs. 150,000 as advance rent for three months, to the landlord of the shop rented for showroom.
c) He purchases furniture and fixtures for the shop from single dealer at the lump sum price of Rs. 500,000, out of which 60% is paid in cash and the rest deferred for a month.
d) Air conditioners worth Rs. 150,000 were purchased in cash.
e) An old Pick-up was purchased for the business for Rs. 450,000 in cash.
f) An insurance premium of Rs 27,000 was paid for one year coverage.
g) The total amount of employees' salaries is Rs. 360,000/month, and salaries are paid on 7th of every month for the previous month. Show the entries for 1st and 8th of April, 2020 separately.
h) Electric Bill of Rs. 44,000 is received on 8th of May, which has the due date of 20th May, 2020.
i) Show the transactions of 8th and 20th May, separately.
j) Merchandise of worth Rs, 2,200,000 is purchased on credit from a supplier M/s Star brothers.
k) Cash Sales of Rs. 847,000 on 25th April were recorded.
l) Sold Items of Rs. 5,000 were returned as defective.
m) Rs. 1,500,000 were paid to M/s Star Brothers.
n) Owner issued Rs. 200,000 cheque from Company's account to the University for his daughter's fees.