Recording of Transactions - 1 — Account STD 11 Commerce — Question

Prepare a Purchase Book in the books of M/s Modern Furniture House, Lucknow (U.P) from the following transactions assuming CGST @ 6% and SGST @ 6%.

2017
June 5	Bought from Mohan Lal & Co., Kanpur (U.P)
	20 Godrej Chairs @ ₹ 2,000 each
	5 Godrej Tables @ ₹ 6,000 each
	Trade Discount 20%
June 10	Purchased from Bharat Bhushan & Sons, Varanasi (U.P)
	5 Almirahs @ ₹ 12,000 each
	2 Revolving Chairs @ ₹ 20,000 each
	Trade Discount 10%
June 14	Purchased from Surya Traders, Lucknow (U.P)
	80 Desks @ ₹ 2,500 each
	10 Sofa Sets @ ₹ 20,000 each
	Trade Discount @ 15%
June 20	Purchased for cash from Gopi Chand Haldi Ram, Delhi
	4 Tables @ ₹ 5,000 each
25 June	Bought Furniture for office use from New Furniture House, Faridabad on Credit
	5 Chairs @ ₹ 2,500 per Chair.
	2 Tables @ ₹ 5,000 per Table.

Rectify the following errors by passing Journal entries:

1. Old furniture sold for ₹ 500 has been credited to Sales Account.
2. Machinery purchased on credit from Raman for ₹ 2,000 recorded through Purchases Book as ₹ 16,000.
3. Cash received from Rajat ₹ 5,000 was posted to the debit of Bhagat as ₹ 6,000.
4. Depreciation provided on machinery ₹ 3,000 was posted to Machinery Account as ₹ 300.

From the following items prepare a Bank Reconciliation Statement on 31st May 2015:

1. Bank balance as per Cash Book on 31st May 2015 ₹ 17,600.
2. Cash and cheques totalling ₹ 36,000 were sent to bank during May but one cheque of ₹ 11,800 was shown in the Pass Book on 2nd June.
3. As per instructions bankers have directly collected ₹ 4,100 from a customer but there is no mention of it in the Cash Book.
4. Three cheques for ₹ 10,000, ₹ 12,000 and ₹ 4,800 respectively were drawn on 27th May but the cheque for ₹ 4,800 was encashed on 1st June.
5. On 31st May bankers had debited ₹ 45 as bank charges but had intimated it on 3rd June.
6. ₹ 16,200 were withdrawn from bank on 25th May but there is no entry for it in the Cash Book.

Rectify the following errors:

1. Credit sales to Mohan ₹ 7,000 were not recorded.
2. Credit purchases from Rohan ₹ 9,000 were not recorded.
3. Goods returned to Rakesh ₹ 4,000 were not recorded.
4. Goods returned from Mahesh ₹ 1,000 were not recorded.

On Jan 01, 2016, Shankar purchased goods from Parvati for ₹ 8,000 and immediately drew a promissory note in favour of Parvati payable after 3 months. On the date of maturity of the promissory note, the Government of India declared holiday under the Negotiable Instrument Act 1881. Since, Parvati was unaware about the provision of the law regarding the date of maturity of the bill, she handed over the bill to her lawyer, who duly presented the bill and received the payment. The amount of the bill was handed over by the lawyer to Parvati immediately. Recore the necessary Journal entries in the books of Parvati and Shankar.

Enter the following transaction in a two column cash book

2013		Amt (Rs.)
Feb-01	Cash in hand	75,000
Feb-05	Paid to Kartik	15,000
	Discount allowed by Kartik	500
Feb-08	Goods purchased	20,000
Feb-10	Received from Parth	49,000
	Discount allowed to Parth	1,000
Feb-16	Goods sold	20,000
Feb-21	Paid to Aroha	14,750
	Discount allowed by him	250
Feb-28	Paid wages for the month	25,000
	Paid in full settlement of Rs. 20,000 to Amit	19,500

On 10th January, 2017, A sells goods to B for ₹ 12,000. On that date, B accepted a bill drawn upon him by A at two months for ₹ 12,000. A retains the bill till due date and on due date sends the bill to the Banker for collection. In due course, A receives the information from the Bank that the bill has been duly met.
Pass Journal Entries in the books of A and B.

State the need for the preparation of bank reconciliation statement?

On 1st January, 2019, Ajay sold goods to Bhushan for ₹ 50,000. Ajay draws a bill of exchange for two months for the amount due which Bhushan accepts and returns it to Ajay. Bhushan met the bill on the due date. Pass Journal entries in the books of Ajay and Bhushan.

“Cash Basis of Accounting is not a better basis for depicting the correct financial position of an enterprise.” Do you agree? Give reasons in support of your answer.