journal entries, on april-1,2005,raghu started a business of selling steel pipes and, Accounting Basics

journal entries, Accounting Basics

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on april-1,2005,raghu started a business of selling steel pipes and angles.he invested cash of Rs.50,00,000 & opened a current a/c with bank for Rs.20,00,000.He took loan from ICICI Bank of Rs.40,00,000 for 5yrs.@10%p.a.For this purposee he purchased machinery of Rs.13,00,000 ; land of Rs.20,00,000 & furniture of Rs.10,00,000.He withderw goods worth Rs.4,00,000 for personal use.he hired a worker& agreed to pay him Rs.50,000/month.he purchased an insurance of goods amounting to Rs.8,00,000. He purchased iron rods fro RAM & CO. worth Rs.5,00,000 on credit basis.On apr-12,goods worth Rs.2,00,000 were returned to him. On may-30,he sold steel pipes to Gupta & CO. worth Rs.6,00,000 on credit basis. On june-30,he sold steel angles worth Rs.10,00,000 to Kumar & CO.who settled his payment as 25% cash,15% cheque and drew a bill of remaining balance for 3 months.On july-4,steel pipes worth Rs.50,000 were returned by GUPTA & CO. On sept-4,he purchased iron rods worth Rs.2,50,000 from KHANNA & CO. who drew a bill for 6 monts on him which he duly accepted. He sold steel rods worth Rs.2,00,000 to SHARMA & CO. on march-2 and received half amount immediately and the remaining half was payable after 3 months.He sold steel rods to RAKESH & CO. worth Rs. 8,00,000 on 4th march. On march-15,it was found that SHARMA & CO. become insolvent and 50 paise in a rupee was received from his estate.On july-6,office & administrative expenses worth Rs.20,000 and selling & distribution expenses worth Rs.50,000 were paid. Advertising expenses worth Rs.1,00,000 were paid on 3-aug. On 9-oct,loss due to theft was Rs.5,00,000 & insurance CO. paid it. Rs.3,00,000 were paid to RAM & CO. on 17-oct. On dec-16, Rs.5,50,000 were received from GUPTA & CO. On 12-feb-2006,machinery repair expenses were of rs.70,000. On 31-march, wages amounting to Rs.4,50,000 ; electricity bills amounting to Rs.3,00,000 ; heating & lighting expenses amounting to Rs.2,25,000 ; telefone charges of Rs.80,000 ; carriage and freight of Rs.1,20,000 and miscll.expenses of Rs.96,000 were paid. closing stock was valued @ Rs.6,00,000.Depreciation on machinery and furniture is to be provided @ 10% p.a. Wages amounting to Rs.1,50,000 are outstanding.Manager is entitled it commission of 7% on net profit. Interest on drawings is to be charged @ 2%p.a. Interest on capital @5%p.a. is to be provided.

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journal entries, Accounting Basics

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