From unit III Processing and reporting Business Transactions
The solution to this question’s journal entries, T accounts & Trial Balance
2018 Fall Q. No. 11 (10 Marks)
Kantipur Delivery Service is incorporated on January 2, 2018, and entered into the following transactions during its first month of operations:
January 2: Field articles of incorporation with the state and issued 100,000 shares of capital stock. Cash of Rs. 100,000 is received from the new owners for the shares.
Jan 3: Purchased a warehouse and land for Rs. 80,000 in cash. An appraiser values the land at Rs. 20,000 and the warehouse at Rs. 60,000.
Jan 4: Signed a three-year promissory note at Third State Bank in the amount of Rs. 50,000.
Jan 6: Purchased five new delivery trucks for a total of Rs. 45,000 in cash.
Jan 15: Performed services on account that amount to Rs. 16,000 during the month.
Jan 25: Cash amounting to Rs. 7,500 was received from customers on the account during the month.
Jan 31: Established an open account at a local service station at the beginning of the month. Purchases of gas and oil during January amounted to Rs. 3000. Kantipur has until the 10th of the following month.
- Prepare journal entries for each transaction.
- Post each transaction to the appropriate T accounts.
- Prepare a trial balance.
The solution to this question journal entries, T accounts & Trail Balance
In the book of Kantipur Delivery Service Incorporation
For this, you have created the table on your copy (To users)
Cash a/c Dr. Rs. 100,000
Share capital a/c Rs. 100,000
(To record the issue of shares on cash and paid-up)
Land a/c Dr. Rs. 20,000
Warehouse a/c Dr. Rs. 60,000
Cash a/c Rs. 80,000
(To record the purchase of land and warehouse on cash)
Cash a/c Dr. Rs. 50,000
Notes payable a/c Rs. 50,000
(To record the exchange of notes for cash)
Delivery trucks a/c Dr. Rs. 45,000
Cash a/c Rs. 45,000
(To record the purchase of five new delivery trucks on cash)
Account receivable a/c Dr. Rs. 16,000
Service revenue a/c Rs. 16,000
(Tor record the service performed on account)
Cash a/c Dr. Rs. 7,500
Account receivable a/c Rs. 7,500
(To record the cash due received from service provided)
Utility expenses a/c Dr. Rs.3,000
Utilities payable a/c Rs.3,000
(To record the utility expenses payable)
b. T accounts
In the book of Kantipur Delivery Service
|S.N.||Particulars||Dr. Rs.||Cr. Rs.|
Share capital a/c
Notes payable a/c
Delivery trucks a/c
Account receivable a/c
Service revenue a/c
Utility expense a/c
Utility payable a/c
|32, 500 |
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