Assignment Questions – MAA – MGT402

Problem 1 (10 marks)

Journalise the following transactions in the books of Mr. Kumar, post them in the Ledger and prepare trial balance.
Solution -1

Journal Entry for Mr Kumari

Ledger
Folio Nature of
S.NO. Date Particular Number Account Debit Credit
Purchase Goods A/C
1 01.03.2018 Dr 1 Real 25000
to Cash a/c 25000
Being goods purchase on cash

Cash a/c
2 02.03.2018 Dr 2 Real 50000
to Sales A/C 50000
Being goods sold for cash

Purchase A/C
3 03.03.2018 Dr 3 Personal 19000
to Gopal A/c 19000
being goods purchase from Gopal

Milton A/C
4 05.03.2018 Dr 4 Personal 8000
to Sales A/c 8000
being goods sold to Milton
 5 07.03.2018 Cash A/c Dr 5 Real 6000
to Milton A/C 6000
being received cash from Milton

Gopal A/c
6 09.03.2018 Dr 6 Personal 5000
to Cash A/C 5000
being cash paid to Gopal

Furniture A/C
7 20.03.2018 Dr 7 Real 7000
to Cash A/C 7000
being purchase furniture from cash

Ledger Accounts
Purchase Goods A/C
Debit Credit
Date Particular JFNO Amount Date Particulars JF No Amount
01.03.2018 To Cash A/c 25000
03.03.2018 By Gopal A/C 19000

31.03.2018 By Balance c/d 6000

25000 25000
01.04.2018 To Balance b/d 6000

Cash A/C
Debit Credit
Date Particular JFNO Amount Date Particulars JF No Amount
01.03.2018 By Purchase good 25000
02.03.2018 to Sales A/C 50000
07.03.2018 By Milton 6000
09.03.2018 by Gopal A/c 5000
20.03.2018 to Furniture A/C 7000
31.03.2018 By Balance c/d 21000

01.04.2018 To Balance b/d 21000

Sales A/C

Debit Credit
Date Particular JFNO Amount Date Particulars JF No Amount
02.03.2018 By Cash A/C 50000
05.03.2018 To Milton 8000
31.03.2018 to Balance b/d 42000

01.04.2018 By Balance c/d 42000

Gopal A/C

Debit Credit
Date Particular JFNO Amount Date Particulars JF No Amount
03.03.2018 To Purchase A/c 19000

09.03.2018 To Cash A/c 5000

31.03.2018 By Balance c/d 24000
01.04.2018 to Balance b/d 24000

Milton A/C
 Debit Credit
Date Particular JFNO Amount Date Particulars JF No Amount
05.03.2018 by Sales A/C 8000
07.03.2018 To Cash A/c 6000
31.03.2018 to balance b/d 2000
01.04.2018 By Balance c/d 2000

Furniture A/C

Debit Credit
Date Particular JFNO Amount Date Particulars JF No Amount
20.03.2018 by purchase A/c 7000
31.03.2018 to balance b/d 7000
01.04.2018 by Balance c/d 7000

TRIAL BALANCE of Kumar Account

S.No. Ledger Account Debit Credit
1 Purchase Goods A/C 6000
2 Cash A/C 21000
3 Sales A/C 42000
4 Gopal A/C 24000
5 Milton A/C 2000
6 Furniture A/C 7000
Total 51000 51000

Problem 2 (10 marks)

Enter the following transactions in journal and post them in the ledger of Mr. Albert and balance them.
Solution -2

Journal Entry of Accounts

Ledger Nature
Folio of
S.NO. Date Particular Number Account Debit Credit
1 01.08.2018 Plant & Machinery A/C dr Real 250000
to capital A/C 250000
being started business
with Plant & machinery

2 01.08.2018 Stocks dr Real 90000

to capital A/C 90000
being started business
with Stocks

3 01.08.2018 Furniture dr Real 7000

to capital A/C 7000
being started business
with Furniture

4 01.08.2018 Cash A/c dr Real 50000

to capital A/C 50000
being started business
with Cash

5 01.08.2018 by Purchase Goods Nominal 150000

to Sundry Creditors 150000
being started business
with Sundry Creditors

6 02.08.2018 Sundar A/C Personal 150000

 To Sales A/C 150000
being good sold to Sundar

7 03.08.2018 Purchase Goods A/C Real 65000

to Natarajan 65000
being purchase goods
from Natarajan

4 04.08.2018 Sundar A/C Personal 125000

to cash A/C 125000
being cash paid by Sundar

5 06.08.2018 Natarajan A/C Nominal 2000

to Purchase A/c 2000
being goods returned to
Natarajan

6 10.08.2018 Natarajan A/c dr Personal 28000

to cash A/c 28000
being cash paid to
Natarajan

7 31.08.2018 Rent A/c dr Nominal 5000

to Cash A/C 5000
being cash paid towards
rent

8 31.08.2018 Salary A/c dr Nominal 9000

to Cash A/c 9000
being cash paid towards
salary

Ledgers Entry Accounts and Balance

 Plant & Machinery A/C
Debit Credit
JF
Date Particular JFNO Amount Date Particulars No Amount
01.08.2018 to Capital A/C 250000

31.08.2018 By Balance c/d 250000

01.09.2018 to Balance b/d 250000

Stock A/C
Debit Credit
JF
Date Particular JFNO Amount Date Particulars No Amount
01.08.2018 to Capital A/C 90000
31.08.2018 by Balance c/d 90000
01.09.2018 to Balance b/d 90000

Furniture A/C
Debit Credit
JF
Date Particular JFNO Amount Date Particulars No Amount
01.08.2018 to Capital A/C 7000
31.08.2018 by Balance c/d 7000
01.09.2018 to balance b/d 7000

Cash A/C
Debit Credit
JF
Date Particular JFNO Amount Date Particulars No Amount
01.08.2018 to Capital a/C 50000 04.08.2018 by sunder 125000
10.08.2018 by natarajan 28000
31.08.2018 by rent 5000
31.08.2018 by salary 9000
50000 167000
31.08.2018 to balance 117000
01.09.2018 by balance 117000

Sundry Creditors A/C

Debit Credit
JF
Date Particular JFNO Amount Date Particulars No Amount
01.08.18 By Purchase Goods A/C 150000
31.08.2018 to balance 150000
01.09.2018 by balance 150000

Capital A/C
Debit Credit
JF
Date Particular JFNO Amount Date Particulars No Amount
01.08.2018 By Plant & Machinery 250000
01.08.2018 By Stocks 90000
01.08.2018 By Furniture 7000
01.08.2018 By Cash A/C 50000
31.08.2018 to Balance b/d 397000 397000
01.09.2018 By Balance c/d 397000
Sundar A/C
Debit Credit
 JF
Date Particular JFNO Amount Date Particulars No Amount
02.08.2018 to sales A/c 150000
04.08.2018 to cash A/c 125000
31.08.2018 By Balance c/d 275000
01.09.2018 to balance 275000

Sales A/C
Debit Credit
JF
Date Particular JFNO Amount Date Particulars No Amount
02.08.2018 by sunder 150000
31.08.2018 to balance 150000
01.09.2018 by balance 150000

Purchase A/C
Debit Credit
JF
Date Particular JFNO Amount Date Particulars No Amount
01.08.2018 to Sundry Creditors 150000 06.08.2018 by natarajan 2000
03.08.2018 to Natarajan 65000 213000
215000
31.08.2018 by balance 213000
01.09.2018 to balance 213000

Natarajan A/C
Debit Credit
JF
Date Particular JFNO Amount Date Particulars No Amount
06.08.2018 to Purchase A/c 2000 03.08.2018 by purchase a/c 65000
10.08.2018 to cash A/C 28000

31.08.2018 to balance 35000

01.09.2018 by balance 35000

Rent A/C
Debit Credit
JF
Date Particular JFNO Amount Date Particulars No Amount
31.08.2018 to cash A/c 5000
31.08.2018 by balance 5000
01.09.2018 to balance 5000

Salary A/C
Debit Credit
JF
Date Particular JFNO Amount Date Particulars No Amount
31.08.2018 to Cash A/C 9000
31.08.2018 by balance 9000
01.09.2018 to balance 9000
 TRIAL BALANCE of Account
S.No. Ledger Account Debit Credit
1 Plant & Machinery 250000
2 Stock 90000
3 Furniture A/C 7000
4 Cash A/C 117000
5 Sundry Creditors 150000
6 Capital 397000
7 Sundar 275000
8 Sales A/C 150000
9 Purchase 213000
10 Natarajan 35000
11 Rent 5000
12 Salary 9000
Total 849000 849000

Problem 3 (5 marks)
Prepare accounting equation and balance sheet on the basis of the following:
Solution -3
Accounting
Equation
(Figures in rupees)

Transaction Assets
Stock = Liabilities Capital Total
No. Cash of Rent Furniture Total
Goods
i. Pandiyan started business with cash Rs.60,000

60000 60000 = 60000 60000

ii. He purchased furniture Rs.10,000

-10000 10000 0 = 0

iii. He paid rent Rs.2,000

-2000 2000 0 = 0

iv. He purchased goods on credit from Mr. Mahesh Rs.30,000

30000 30000 = 30000 30000

v. He sold goods (cost price Rs.20,000) for cash Rs.25,000

25000 -20000 5000 = 5000

Total 73000 10000 2000 10000 95000 = 30000 65000 95000

Assets = Cash
(73000) + Goods
(10000) + Rent
(2000)
+Furniture
(10000) = 95000

Liabilities =
30000
(Creditors)
Total Capital =
60000(Capital) +
5000 (Profit)

Assets (95000) =
Liabilities
(30000) + Capital
(65000)

Balance Sheet

Liabilities Amount Assets Amount

Capital A/c 65000 Cash A/C 73000
Mahesh A/C 30000 Rent A/C 2000
Goods
A/C 10000
Furniture
A/C 10000

Total 95000 Total 95000

Problem 4 (5 marks)
Hindustan company has incurred the following expenditure and you are required to identify the capital, revenue and deferred revenue expenses.
Solution -4

Expense
S.No. Particular Amount Type
Deferred
Revenue Revenue
Expense Expense
Capital Expense (CE) (RE) (DRE) Reason
Revenue Expense as sales meeting
was successful and would benefit for
1 Travelling Expense 60000 RE 60000 the current year.
It is including the fixed asset cost i.e.
2 Machine Installation Cost 500 CE 500 capital expense.
It is deferred revenue as R&D
revenues are deferred more than
3 R&D 600000 DRE 600000 one year.
It is an operational cost therefore
4 Fuel 500 RE 500 categorized as revenue expense.
It is a revenue whose benefit will be
deferred in future years also, as
alteration done to reduce power
5 Machine Alteration 600 DRE 600 consumption
Total 500 60500 600600

Capital Expense (CE) 500

Revenue Expense (RE) 60500
Deferred Revenue
Expense (DRE) 600600
Working Notesii
Capital Expenditure
1. Capital expenditure is that expenditure the benefits of which are not fully consumed in a year but spread over several years.
2. It is the expenditure which results in the purchase or acquisition of asset or property.
3. It is the expenditure incurred in connection with the purchase of asset.
4. It is the expenditure incurred to bring an old asset into working condition.
5. It is the expenditure incurred for extending or improving an existing asset to increase its productivity or to increase the earning capacity of
business or to decrease working expenditure.
It can be said that the capital expenditure benefits not only in the current accounting year but also many years in the future. The expenditure is
generally non-recurring, and the amount spent is normally large. However, it should be noted that not every big expenditure is capital expenditure.
Capital expenditures are shown in balance sheet.
Revenue Expenditure
1. Revenue expenditure is the expenditure which benefits in the current accounting year. It is not carried forward to the next year or years.
2. It is the expenditure which is incurred in the normal course of business to run the business and to maintain the fixed assets of business.
3. It is the expenditure which is incurred on purchase of goods meant for resale or to purchase materials which will be used to convert them into
final product. Therefore, revenue expenditure is a recurring expenditure made to maintain the business. The amount spent is generally small and
the benefit is for a short period which is not more than a year. All revenue expenditure are charged to trading and profit and loss account.
Deferred Revenue Expenditure
Deferred revenue expenditure is the expenditure which is originally revenue in nature, but the amount spent is so large that the benefit is received
for not a year but for many years. A proportionate amount is charged to profit and loss account of each year and balance is carried forward to
subsequent years as deferred revenue expenditure. It is shown as an asset in the balance sheet, e.g., heavy expenditure incurred on
advertisements.