Bill of Exchange — Account STD 11 Commerce — Question

Enter the following transaction in a double column cash book of M/s.Mohit Traders for January 2017:

		₹
01	Cash in hand	3,500
	Bank overdraft	2,300
03	Goods purchased for cash	1,200
05	Paid wages	200
10	Cash sales	8,000
15	Deposited into bank	6,000
22	Sold goods for cheque which was deposited into bank same day	2,000
25	Paid rent by cheque	1,200
28	Drew from bank for personal use	1,000
31	Bought goods by cheque	1,000

X Ltd. purchased a plant on 1st July, 2010 costing ₹ 5,00,000. It purchased another plant on 1st September, 2010 costing ₹ 3,00,000. On 31st December, 2012, the plant purchased on 1st July, 2010 got out of order and was sold for ₹ 2,15,000. Another plant was purchased to replace the same for ₹ 6,00,000. Depreciation is to be provided at 20% p.a. according to Writen Down Value Method. The accounts are closed every year on 31st March.
Show the Plant Account and Provision for Depreciation Account.

M/s Lokesh Fabrics purchased a Textile Machine on April 01, 2011 for ₹ 1,00,000. On July 01, 2012 another machine costing ₹ 2,50,000 was purchased . The machine purchased on April 01, 2011 was sold for ₹ 25,000 on October 01, 2015. The company charges depreciation @15% p.a. on straight line method. Prepare machinery account and machinery disposal account for the year ended March 31, 2016.

What is Double-Entry System? Explain its principles and advantages.

Journalise the following transactions in the Journal of M/s. Gupta Brothers (Prop. Shri R. K. Gupta), Delhi and post them to the Ledger:

2019		₹
March 1	Started business with cash	2,00,000
March 2	Opened bank account with SBI	80,000
March 4	Goods purchased from Raj, Jaipur (Rajasthan)	22,000
March 5	Goods purchased for cash	30,000
March 8	Goods sold to Naman, Delhi	12,000
March 10	Cash paid to Raj	22,000
March 15	Cash received from Naman	11,700
	Discount allowed	300
March 16	Paid wages	200
March 18	Furniture purchased for office use	5,000
March 20	Withdrawn from bank for personal use	4,000
March 22	Issued cheque for rent	3,000
March 23	Goods taken for household purpose. These goods were purchased from Raj	2,000
March 24	Drawn cash from bank for office use	6,000
March 26	Commission received	1,000
March 27	Bank charges	300
March 28	Cheque issued for life insurance premium of Proprietor	3,000
March 29	Paid salary	10,000
March 30	Cash sales	20,000

Bhushan & Company purchased a Machinery on 1st April, 2015, for ₹ 54,000 and spent ₹ 6,000 on its installation. On 1st December, 2016, it purchased another machine for ₹ 30,000.
On 30th June 2017, the first machine purchased on 1st April, 2015, is sold for ₹ 36,000 and on the same date it purchased a new machinery for ₹ 80,000.
On December 1, 2018, the second machine (purchased on December 1, 2016) was also sold off for ₹ 26,000.
Depreciation was provided on machinery @ 10% p.a. on Original Cost Method annually on 31st March. Give the machinery account for four years.

On 1st January 2017, Hari drew on Gopal, who is his debtor for ₹ 60,000 three bills of exchange: First for ₹ 15,000 at one month, Second for ₹ 20,000 at two months and third for ₹ 25,000 at three months. Gopal accepted all the three bills.
On 5th January 2017, Hari endorsed the first bill to his creditor Satish in full settlement of his account of ₹ 15,200. This bill was duly met on maturity.
On 1st February 2017, the second bill was discounted from the bank @ 12% p.a. This bill was dishonoured on the due date and bank paid ₹ 120 as noting charges. On Gopal's request, Hari drew a fourth bill on Gopal for 2 months for the amount due plus interest @ 15% p.a.
Third bill was paid under a rebate of 12% p.a. one month before maturity. The fourth bill was sent to bank for collection on 4th May 2017 and was duly met on maturity.
Pass Journal entries in the books of Hari, Gopal and Satish.

Rectify the following errors and ascertain the amount of difference in trial balance by preparing suspense account:

1. Credit sales to Mohan ₹ 7,000 were not posted.
2. Credit purchases from Rohan ₹ 9,000 were not posted.
3. Goods returned to Rakesh ₹ 4,000 were not posted.
4. Goods returned from Mahesh ₹ 1,000 were not posted.
5. Cash paid to Ganesh ₹ 3,000 was not posted.
6. Cash sales ₹ 2,000 were not posted.

An extract of Trial balance from the books of Tahiliani and Sons Enterprises on March 31, 2017 is given below:

Name of the Account	Debit Amount	Credit Amount
	₹	₹
Sundry debtors	50,000
Bad debts	6,000
Provision for doubtful debts		4,000

Additional Information:

• Bad Debts proved bad but not recorded amounted to ₹ 2,000.
• Provision is to be maintained at 8% of Debtors.

Give necessary accounting entries for writing off the bad debts and creating the provision for doubtful debts account. Also show the necessary accounts.

Explain the meaning of any three of the following terms:
Consistency.