Question No 08 B Chapter No 7

Question No 08 B Chapter No 7

08.(B)Prepare a Cash Book with Discount ,Cash and Bank Columns from the following transactions:−

2018 Rs
May.1Cash in hand4,800
 Bank Overdraft30,400
May.2Fresh Capital introduced 20,000
May.3Deposited into Bank 15,000
May.4Sold goods to Mahesh on Credit6,200
May.5An amount of 4,200 due from Ashok written off as bad debts in the previous year, now recovered.  
May.6Withdrew from bank for the payment of Life Insurance Premium3,000
May.8Received a cheque form, Mahesh, for 6,000 in full settlement of his account and deposited the same into the Bank 
May.10Sold goods to Varun on Credit30,000
May.12Received a cheque for 28,000 from Varun in full settlement. 
May.15Cheque received from Varun sent to Bank 
May.18Varun’s cheque returned by Bank dishonored. Bank charged 25 on this cheque 
May.20Received a cheque of 6,800 from Vijay which was endorsed to Amritraj on 23rd May. 
May.25Withdrew cash from Bank 5,000 for paying gift to his daughter on her birthday. 
May.26Bought goods from Gupta General Store for 10,000 on credit and they allowed us trade discount of 25% 
May.28Paid to Gupta General Stores in cash in full settlement7,000
May.28Sale of old machinery, the payment received in cash 7,700. 
May.30Paid Salary by cheque 1,500. Paid Rent in cash 2,200. 
May.31Paid into Current Account the entire balance after retaining 5,000 at office. 

The solution of Question No 08 B Chapter No 7: –

Dr.Cash BookCr.
Discount ReceivedCashBank
2020     2020     
May.1To Balance b/d 4,800May.01By Balance b/d 30,400
May.2To Capital A/c 20,000May.03By Bank A/c 15,000
May.03To Cash A/c 15,000May.6By Manoj & Co A/c 3,000
May.05To Bad Debts Recov A/c 4,200May.18By Machinery A/c 28,025
May.08To Mahesh A/c 2006,000May.25By Machinery A/c  5,000
May.15To Varun A/c 2,000 28,000May.28By Furniture A/c 5007,000
May.28To Machinery A/c 7,700May.30By Kalpna Garments  1,500
May.31To Cash A/c   7,500May.30By Petty Expenses A/c  2,200 
      May.31By Salary A/c  7,500 
Jun.30To Balance c/d 2,200 11,425Jun.30By Balance C/d 500
   2,20036,70067,925   50036,70067,925


May. 12Cheques-in-Hand A/cDr. 28,000 
 Discount Allowed A/cDr. 2,000 
 To Varun a/c   3c,000
 (Being Received cheque from Varun)    
May. 18Varun A/cDr. 2,000 
 To Discount Allowed A/c   2,000
 (Being Cheque received from Varun, dishonoured)    
May. 20Cheques-in-Hand A/cDr. 6,800 
 To Vijay A/c   6,800
 (Being Received cheque from Vijay)    
May. 23Amit A/cDr. 6,800 
 To Cheques-in-Hand A/c   6,800
 (Being Cheque received from Vijay, endorsed to Amrit)    

Cash Deposited into the Bank

Cash Deposited into the bank=Total Cash Column (Dr. side) – Total Cash Column (Cr. side) +Cash Balance maintained
 =36,700 – (24,200 + 5,000)
 =Rs 7,500

Note: Transaction dated May 04, 2016 and May 10, 2016 will not be recorded in Cash Book because credit transactions will not affect the cash/bank balance

Cash Book | Types of Cash Book | Subsidiary Books

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