# Journal Entries and Ledger Question and Answer

Q: Mr Robert commenced business on 1st January, 2011 with a capital of \$100,000 in cash. On the same date he opened the bank account in ADCB and deposited \$20,000. During the month of January 2011 the following transactions took place:

Jan 1 Bought goods for cash 70,000

2 Sold goods to Steve Co. (Credit) 38,000

15 Sold goods for cash 9,000

21 Steve Co. paid by cheque 35,000

22 Stationery bill paid by cheque 2,000

22 Telephone bill by cash 500

31 Paid rent by cash 2,000

Paid salaries by cash 3,000

Withdrew cash personal use 5,000

Required:
Make journal entries for the transactions and post them to ledgers.

A:

JOURNALS

Jan 1 Dr Cash on hand 80,000
Dr Bank 20,000
Cr Capital 100,000

Note that in most accounting questions you won't have to account for "Cash on hand" and "Bank" in separate accounts. In most questions I just combine these into "Bank." But in this question they specifically talk about opening the bank account with \$20,000 of the \$100,000, which indicates they kept cash on hand in addition to the bank account, which needs to be accounted for.

1 Dr Purchases/Inventory 70,000
Cr Cash on hand 70,000

Note that it's "Purchases" for a periodic system of inventory and "Inventory" if it's the perpetual system. See the tutorial on perpetual and periodic inventory for more information.

2. Dr Debtors 38,000
Cr Sales 38,000

15. Dr Cash on hand 9,000
Cr Sales 9,000

21. Dr Bank 35,000
Cr Debtors 35,000

22. Dr Stationery expense 2,000
Cr Bank 2,000

22. Dr Telephone expense 500
Cr Cash on hand 500

31. Dr Rent expense 2,000
Cr Cash on hand 2,000

31. Dr Salaries 3,000
Cr Cash on hand 3,000

31. Dr Drawings 5,000
Cr Cash on hand 5,000

T-ACCOUNTS

There you go. Hope you enjoyed this detailed journal entries and ledger question and answer.

Thanks to Kay Khine, Kong Chenda and others for contributions below that helped solve this question!

- Michael Celender
Founder of Accounting Basics for Students

Tutorials relating to this Journal Entries and Ledger Question and Answer: Find more exercises like this on the Full Accounting Questions and Answers page.

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 Appreciation by: Caren Blessings Thank you so much for your great help. I have received greater knowledge on ledgers, may God bless you so much as you continue to help many by sharing and not keeping it to yourself. THANK YOU!

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 Thank u so much u have saved me from failing God bless u keep on helping us by: Yvonne Thank you very much Very appreciate to Ur hard work God bless u

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 Post to Ledger Account by: Kay Khine Ans: 1-1-2011 Cash On Hand \$100,000 Dr Capital \$100,000 Cr 1-1-2011 ADCB Bank \$20,000 Dr Cash On Hand \$20,000 Cr1-1-2011 Inventories \$70,000 Dr Cash On Hand \$70,000 Cr2-1-2011 A/R (Steve Co.) \$38,000 Dr Sales \$38,000 Cr15-1-2011 Cash On Hand \$9,000 Dr Sales \$9,000 Cr21-1-2011 ADCB Bank \$35,000 Dr A/R (Steve Co.) \$35,000 Cr22-1-2011 Stationery \$2,000 Dr ADCB Bank \$2,000 Cr22-1-2011 Telephone \$500 Dr Cash On Hand \$500 Cr31-1-2011 Rent \$2,000 Dr Cash On Hand \$2,000 Cr31-1-2011 Salaries \$3,000 Dr Cash On Hand \$3,000 Cr31-1-2011 Withdraw \$5,000 Dr Cash On Hand \$5,000 Cr All of ledger posting finished.

 journal entries by: Veronika this is a big huge help. i have needed to run through things and revise. it has simplified my practice big time. i'm so appreciativeYou're welcome Veronika!- Michael

 How to Post These Entries? by: Friend whatever you did is great but my question is HOW DO U POST THESE ENTRIES?I just added all the T-accounts above so there is the full solution now.- Michael

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 student. In India by: John woja Thank you so much. I found it helpful to me. God bless you.Glad to hear and you're most welcome!- Michael

 Good! by: Anonymous Good!

 journal entries and post to ledger account by: Kong chenda I. Make journal entries :Jan 01. Cash on hand.....80,000.00 Cash in bank.....20,000.00 Capital.................100,000.00 To record investment by owner. 01. Inventory.........70,000.00 Cash on hand...............70,000.00 To record purchase inventory for cash. 02. A/R................38,000.00 Sales revenue..............38,000.00 To record sold merchandise on credit. 15. Cash on hand............9,000.00 Sales revenue..................9,000.00 To record sold merchandise for cash. 21. Cash..............35,000.00 A/R.......................35,000.00 To record received payment from customer. 22. Stationery...............2,000.00 Cash in bank...................2,000.00 To record purchase stationery for cash. 22. Telephone expense..........500.00 Cash on hand .................500.00 To record paid for telephone. 31. Rent expense...........2,000.00 Cash on hand ................2,000.00 To record paid rent. 31. Salaries expense......3,000.00 Cash on hand................3,000.00 To record paid for salaries. 31. Withdraw.............5,000.00 Cash on hand................5,000.00 To record withdraw by owner. II. Post to Ledger account.For ledger I did already but I can't put the table so small here...

 good by: Anonymous good

 Posting? by: Anonymous how do I do the posting?Posting to T-accounts now shown above. Enjoy!- Michael