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Analysis of Business Transactions

Here are the journal entries for the transactions: 1. Capital A/c (Mr. A) Dr. 50,000 To Cash A/c 50,000 (Mr. A invested capital) 2. Rent Expense A/c Dr. 7500 To Cash A/c 7500 (Paid 3 months rent) 3. Office Equipment A/c Dr. 10000 To Cash A/c 3000 To A/c Payable (B&Co) 7000 (Bought equipment, paid part cash) 4. Cash A/c Dr. 5000 To Service Revenue A/c 5000 (Received cash for services) 5.

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Sumeet Kumar
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74 views33 pages

Analysis of Business Transactions

Here are the journal entries for the transactions: 1. Capital A/c (Mr. A) Dr. 50,000 To Cash A/c 50,000 (Mr. A invested capital) 2. Rent Expense A/c Dr. 7500 To Cash A/c 7500 (Paid 3 months rent) 3. Office Equipment A/c Dr. 10000 To Cash A/c 3000 To A/c Payable (B&Co) 7000 (Bought equipment, paid part cash) 4. Cash A/c Dr. 5000 To Service Revenue A/c 5000 (Received cash for services) 5.

Uploaded by

Sumeet Kumar
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© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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ANALYSIS OF BUSINESS

TRANSACTIONS

• TITLE OF ACCOUNT ( at least two)


• NATURE OF ACCOUNT ( any of five)
• INCREASE OR DECREASE
• DEBIT OR CREDIT
Q:PURCHASE FURNITURE FOR
CASH RS.4000
• FURNITURE A/C CASH A/C
• ASSET ASSET
• INCREASE DECREASE
• DEBIT CREDIT
Q: PURCASHE MACHINE FOR
CASH RS.5000
• MACHINE A/C CASH A/C
• ASSET ASSET
• INCREASE DECREASE
• DEBIT CREDIT
Q:PURCASHE OFFICE SUPPLIES
FOR CASH RS.700
• OFFICE SUPPLIES CASH A/C
• ASSES ASSET
• INCREASE DECREASE
• DEBIT CREDIT
Q:CASH DEPOSITED IN BANK
A/C RS.25,000
• BANK A/C CASH A/C
• ASSET ASSET
• INCREASE DECREASE
• DEBIT CREDIT
CASH WITHDREW FROM BANK
FOR OFFICE RS.5000
• CASH A/C BANK A/C
• ASSET ASSET
• INCREASE DECREASE
• DEBIT CREDIT
PURCAHSE MERCHANDISE FOR
CASH RS. 10,000
• PURCHASES A/C CASH A/C
• ASSET ASSET
• INCREASE DECREASE
• DEBIT CREDIT
PURCASHE EQUIPMENT AND
PAID BY CHEQUE RS.36,000
• EQUIPMENT A/C BANK
• ASSET ASSET
• INCREASE DECREASE
• DEBIT CREDIT
Q.PAID RENT EXPENSE RS.4000
• RENT EXPENSE CASH
• EXPENSE ASSET
• INCREASE DECREASE
• DEBIT CREDIT
Q.RECEIVED CONSULTING FEE
INCOME RS.25,000
• CASH FEE INCOME
• ASSET REVENUE
• INCREASE INCREASE
• DEBIT CREDIT
BILLED TO MR.AMIR FOR
SERVICES GIVEN ON CREDIT
RS. 32,000
• A/C RECEIVABLE(AMIR) FEE INCOEM
• ASSET REVENUE
• INCREASE INCREASE
• DEBIT CREDIT
RECEIVED CASH FROM
MR. AMIR RS.20,000
• CASH A/C RECEIVABLE(AMIR)
• ASSET ASSET
• INCREASE DECREASE
• DEBIT CREDIT
PURCASHE COMPUTER ON
CREDIT FROM REHMAN
RS.30,000
• EQUIPMENT A/C PAYABLE(Rehman)
• ASSET LIABILITY
• INCREASE INCREASE
• DEBIT CREDIT
PAID BY CHEQUE TO
MR. REHMAN RS. 10,000

• A/C PAYABLE(Rehman) BANK A/C


• LIABILITY ASSET
• DECREASE DECREASE
• DEBIT CREDIT
MR.ABID INVESTED IN
BUSINESS RS.100,000

• CASH A/C CAPITAL-ABID


• ASSET CAPITAL
• INCREASE INCREASE
• DEBIT CREDIT
MR. ABID WITHDRAW FROM
BUSINESS FOR PERSONAL USE
RS.6000
• DRAWING-ABID CASH A/C
• CAPITAL ASSET
• DECREASE DECREASE
• DEBIT CREDIT
MR.ABID
GENERAL JOURANL
DATE DESCRIPTION P/R DEBIT CREDIT
MR.ABID
GENERAL JOURANL
DATE DESCRIPTION P/R DEBIT CREDIT

1 Jan Furniture a/c 4,000


Cash a/c 4,000
(Purchase furniture
by cash)
MR.ABID
GENERAL JOURANL
DATE DESCRIPTION P/R DEBIT CREDIT
1 Jan Furniture a/c 4,000
Cash a/c 4,000
(Purchase furniture by
cash)
2 Jan Machine a/c 5,000
Cash a/c 5,000
(Purchase machine by
cash)
3 Jan Office supplies 700
Cash a/c 700
(Purchase supplies )
Class activity
1. Purchase supplies for cash Rs. 400
2. Purchase machine for cash Rs.7000
3. Services rendered to client for cash Rs. 5000
4. Cash deposited in bank a/c Rs. 10,000
5. Mr. Khalid invested in business Rs. 65,000
6. Services rendered to client on credit to Baber
Rs. 6000
7. Cash withdraw from bank for office Rs.500
8. Purchase computer on credit from Amir Rs.
20,000
9. Paid salaries expense by cheque Rs. 15,000
Class activity
• Purchase equipment for Rs.30,000 from
Amir and paid cash Rs.20,000, balance is
payable
• Sold merchandise for Rs.10,000 to Baber
and received cash Rs.6000, balance is
receivable
• Paid to Amir by cheque Rs.4000
• Received from Baber Rs.1000
• Paid salaries expense by cheque Rs.3000
• Earned commission Rs 7000
CLASS ACTIVITY
• Purchase office building of $256,600 of
which $ 56,600 was applicable to the land.
A cash payment of $156,600 was made
and accept a note for the balance.

• Prepare Journal entry


ANSWER
• DR CR
• BUILDING-----------200,000
• LAND------------------56,600
• CASH----------------------156,600
• NOTE PAYABLE--------100,000
CLASS ACTIVITY
• Five computers were purchased at $500
each from ABC Co. on June 1. Firm paid
cash $1500 and balance will be paid in
two instalment of $500 each.

• Prepare Journal entry


ANSWER
• DR CR
• EQUIPMENT ---------- 2500
• CASH-----------------------------1500
• A/C PAYABLE(ABC)---------1000
CLASS ACTIVITY
• One of the computer got defect and
returned to ABC Co. ABC company
accepted to give allowance of $500.

• Prepare Journal entry


ANSWER
• DR CR
• A/c payable (ABC Co) 500
• Equipment 500
CLASS ACTIVITY
• Sold old plant at $ 126,000 to Classic Co.
Client agree to pay cash $26,000 as down
payment. The balance will be paid in five
installments after every three months.

• Prepare Journal entry


ANSWER
• DR CR

• Cash------------------------- 26,000
• A/c Receivable-----------100,000
• Plant---------------------------126,000
CLASS ACTIVITY
Mr Ahmer borrowed from MCB on five year
term Rs.1 million at 11.5% interest per
annum. This amount is deposited into
business bank account.

Prepare Journal entry


ANSWER
• DR CR

• Bank a/c --------------1,000,000


• Loan payable-------------------1,000,000
CLASS ACTIVITY
• Mr.A started business with Rs.50,000.
• Paid rent for three months at Rs.7500.
• Bought office equipment from B&Co. for
Rs. 10000, paid to them Rs.3000 and
promised to pay the balance after two
months.
• Rendered services to clients and
received cash Rs. 5000
• Purchase supplies for cash Rs. 400
CLASS ACTIVITY
• Paid salaries to staff Rs. 5400
• Bought furniture for Rs. 3200,paid to
K&Co. Rs.1200 and promised to pay
balance after one month
• Withdrew cash for personal use Rs. 3000
• Billed to Nasir for services rendered on
credit Rs. 12500
• Received from Nasir Rs.5000

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