Question 33 of 45intermediate🔧 ApplyNumerical6 marks

Enter the following transactions in double column cash book of M/s Ambica Traders for July 2017: 01 Commenced business with cash 50,000 03 Opened bank account with ICICI 30,000 05 Purchased goods for cash 10,000 10 Purchased office machine for cash 5,000 15 Sales goods on credit from Rohan and received cheque 7,000 18 Cash sales 8,000 20 Rohan’s cheque deposited into bank 22 Paid cartage by cheque 500 25 Cash withdrawn for personal use 2,000 30 Paid rent by cheque 1,000

Correct Answer

Cash in hand ₹ 11,000; Cash at bank ₹ 35,500

Exercise: Numerical Questions | Q: 6
For More Understanding

Explanation

This question requires preparing a Double Column Cash Book with Cash and Bank columns. Key points to note: (1) Transaction on July 03 is a contra entry where cash is deposited into bank; (2) Transaction on July 15 involves receiving a cheque from Rohan which is recorded in Cash column, and on July 20 when deposited, it becomes another contra entry; (3) All cheque payments go to Bank column (Credit side); (4) Cash withdrawals for personal use (drawings) go to Cash column (Credit side). The balancing of both columns independently gives the closing balances.

Solution Steps

  1. Step 1: Record opening entry on July 01 - Commenced business with cash ₹50,000 (Debit Cash Column)

  2. Step 2: July 03 - Opened bank account ₹30,000 - Contra Entry (Credit Cash, Debit Bank)

  3. Step 3: July 05 - Purchased goods for cash ₹10,000 (Credit Cash Column)

  4. Step 4: July 10 - Purchased office machine for cash ₹5,000 (Credit Cash Column)

  5. Step 5: July 15 - Received cheque from Rohan ₹7,000 (Debit Cash Column - cheque treated as cash until deposited)

  6. Step 6: July 18 - Cash sales ₹8,000 (Debit Cash Column)

  7. Step 7: July 20 - Rohan's cheque deposited into bank - Contra Entry (Credit Cash ₹7,000, Debit Bank ₹7,000)

  8. Step 8: July 22 - Paid cartage by cheque ₹500 (Credit Bank Column)

  9. Step 9: July 25 - Cash withdrawn for personal use ₹2,000 (Credit Cash Column - Drawings)

  10. Step 10: July 30 - Paid rent by cheque ₹1,000 (Credit Bank Column)

  11. Step 11: Balance Cash Column - Debit Total: ₹65,000; Credit Total: ₹54,000; Balance c/d: ₹11,000

  12. Step 12: Balance Bank Column - Debit Total: ₹37,000; Credit Total: ₹1,500; Balance c/d: ₹35,500

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