Sample Question -1

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Sample Question -1

Posted by Ripon Abu Hasnat on Thursday, October 16, 2014 | 0 comments

Talukder Textile Mills was incorporated on January 1, 2012 with an initial capital of 5,000 shares of common stock having TK. 20 par value. During the first month of its operations, the company engaged in following transactions:

Date	Transaction
Jan 2	An amount of TK. 36,000 was paid as advance rent for three months.
Jan 3	Paid TK. 60,000 cash on the purchase of equipment costing TK. 80,000. The remaining amount was recognized as a one year note payable with interest rate of 9%.
Jan 4	Purchased office supplies costing TK. 17,600 on account.
Jan 13	Provided services to its customers and received TK. 28,500 in cash.
Jan 13	Paid the accounts payable on the office supplies purchased on January 4.
Jan 14	Paid wages to its employees for first two weeks of January, aggregating TK. 19,100.
Jan 18	Provided TK. 54,100 worth of services to its customers. They paid TK. 32,900 and promised to pay the remaining amount.
Jan 23	Received TK. 15,300 from customers for the services provided on January 18.
Jan 25	Received TK. 4,000 as an advance payment from customers.
Jan 26	Purchased office supplies costing TK. 5,200 on account.
Jan 28	Paid wages to its employees for the third and fourth week of January: TK. 19,100.
Jan 31	Paid TK. 5,000 as dividends.
Jan 31	Received electricity bill of TK. 2,470.
Jan 31	Received telephone bill of TK. 1,494.
Jan 31	Miscellaneous expenses paid during the month totaled TK. 3,470

You have to journalize the above transaction in Talukder Textile Mills journal Book

Solutions:

Date	Particulars	Debit	Credit
Jan 1	Cash	100,000
	Common Stock		100,000
Jan 2	Prepaid Rent	36,000
	Cash		36,000
Jan 3	Equipment	80,000
	Cash		60,000
	Notes Payable		20,000
Jan 4	Office Supplies	17,600
	Accounts Payable		17,600
Jan 13	Cash	28,500
	Service Revenue		28,500
Jan 13	Accounts Payable	17,600
	Cash		17,600
Jan 14	Wages Expense	19,100
	Cash		19,100
Jan 18	Cash	32,900
	Accounts Receivable	21,200
	Service Revenue		54,100
Jan 23	Cash	15,300
	Accounts Receivable		15,300
Jan 25	Cash	4,000
	Unearned Revenue		4,000
Jan 26	Office Supplies	5,200
	Accounts Payable		5,200
Jan 28	Wages Expense	19,100
	Cash		19,100
Jan 31	Dividends	5,000
	Cash		5,000
Jan 31	Electricity Expense	2,470
	Utilities Payable		2,470
Jan 31	Telephone Expense	1,494
	Utilities Payable		1,494
Jan 31	Miscellaneous Expense	3,470
	Cash		3,470