Question

Deri is a sole trader dealing in automobiles. From the following transactions, pass journal entries for the month of January 2018.

1 Commenced business with cash 100,000, with goods 200,000 and with buildings 500,000
2 Purchased goods from A and Co. on credit 300,000
4 Purchased goods from B and Co. and payment made through credit card 5,000
5 Paid A and Co. through cheque
6 Sold goods to C and Co. and cheque received 50,000
8 Purchased goods from Z & Co. and paid through debit card 12,000
9 Stationery purchased for and paid through net banking 6,000
10 Income tax of Deri is paid by cheque 10,000. Draw journal

Answer 1

Journal entries for the month of January 2018 for Deri, a sole trader dealing in automobiles.

Step-by-step explanation:

• Journal Entry for commencement: Cash $100,000, Goods $200,000, Buildings $500,000
  
  Debit:
  Cash - $100,000
  Goods - $200,000
  Buildings - $500,000
  Credit:
  Capital - $800,000

• Journal Entry for purchase from A and Co. on credit: Goods $300,000
  
  Debit:
  Goods - $300,000
  Credit:
  A and Co. - $300,000

• Journal Entry for purchase from B and Co. through credit card: Goods $5,000, Credit card - $5,000
  
  Debit:
  Goods - $5,000
  Credit card - $5,000
  Credit:
  B and Co. - $5,000

• Journal Entry for payment to A and Co. through cheque: A and Co. - $300,000, Cash - $300,000
  
  Debit:
  A and Co. - $300,000
  Credit:
  Cash - $300,000

• Journal Entry for sale to C and Co. and receipt through cheque: Cash - $50,000, Accounts Receivable - $50,000
  
  Debit:
  Cash - $50,000
  Credit:
  Accounts Receivable - $50,000

• Journal Entry for purchase from Z and Co. through debit card: Goods - $12,000, Debit card - $12,000
  
  Debit:
  Goods - $12,000
  Debit card - $12,000
  Credit:
  Z and Co. - $12,000

• Journal Entry for stationery purchase through net banking: Stationery - $6,000, Cash - $6,000
  
  Debit:
  Stationery - $6,000
  Credit:
  Cash - $6,000

• Journal Entry for payment of Deri's Income tax through cheque: Income tax expense - $10,000, Cash - $10,000
  
  Debit:
  Income tax expense - $10,000
  Credit:
  Cash - $10,000