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Aruna, decided to start business of …

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Aruna, decided to start business of fashion garments under the name M/S Designer Wear from 1st April,2020. She had Savings of Rs. 10,00,000 .She invested Rs. 3,00,000 out of her savings and also borrowed Rs.3,00,000 from State Bank of India. She purchased a commercial space of 500 sq. feet for Rs. 5,00,000. The space so purchased was suitably renovated to make it ready as showroom.she purchased furniture and fixtures for Rs . 75,000. Total amount of bank loan is to be repaid in 20 quarterly instalments beginning 30th June,2020. Annual rate of interest is 12% p.a. Repayment Schedule of Bank Loan in the first year is as follows: Due Date Principal Interest Instalment June 30, 2020 15,000 9,000 24,000 September 30, 2020 15,000 8,550 23,550 December 31, 2020 15,000 8,100 23,100 March 31, 2021 15,000 7,650 22,650 She started business on 1st April, 2020 getting it registered under Goods and Services Tax (GST). In view of further capital requirement, she further deposited Rs. 2,00,000 in the bank. She paid Security Deposits of Rs. 5,000 for the electricity connection with BSES Rajdhani Power Ltd. and Rs. 2,000 to MTNL for telephone connection. Furniture for Rs. 10,000 was purchased further. All payments were to be made by cheque. All the receipts were in cash and to be deposited in the bank in the morning of next day. At the end of the year, her results showed the following: Rs. Total Sales 20,00,000 Total Purchases 17,00,000 Electricity Expenses 40,000 Telephone Charges 50,000 Cartage Outwards 60,000 Travelling Expenses 45,000 Business Promotion (Restaurant Bill) Expenses 5,000 Maintenance Expenses 25,000 Miscellaneous Expenses 15,000 Electricity Expenses Payable 20,000 She withdrew Rs. 5,000 by cheque each month for her personal expenses. Bank Loan was serviced and instalments were paid regularly. 1. Journalise the above transactions in the books of M/s Designer Wear, post them into the Ledger and prepare the Trial Balance. 2. Also, prepare its Trading Account, Profit and Loss Account and Balance Sheet. Charge depreciation @ 5% on Building and 10% on Furniture and Fixtures. Closing Stock at the end of the year was 5,50,000
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