On 1st January, 2016 Mr. ARJUN SINGH decided to start a driving school, also to sell car accessories
through same place. For this purpose, he bought a workshop at a cost of ₹ 40,00,000 and decided to
invest ₹ 15,00,000 as a further capital in the proposed business. He employed assistants and
training staff for this purpose. He wants to start with 5 second hand cars. For further funds he
approached Punjab National Bank and secured a loan of 36,00,000 @ 10% per annum. The loan was
payable in 4 instalments along with interest due.
Amt (₹)
Purchased cars 26,00,000
Security deposited for electricity connection with electricity board 1,20,000
Security deposited with BSNL for telephone and internet connection 3,00,000
Purchased furniture 2,40,000
Fees received from students 39,00,000
Bought car accessories 6,60,000
Sale of car accessories 9,60,000
Wages paid 5,40,000
Salaries paid 7,50,000
Electricity charges 2,85,000
Advertisement 1,32,000
Postage and call 57,000
General expenses 36,000
Insurance premium 27,600
Bought laptop and printer 1,80,000
He withdrew ₹ 72,000 per month as drawings and repaid the annual instalment of bank loan along
with interest due to 31st December, 2016. Assume all transactions took place through Punjab
National Bank.
You are required to
(1) Journalise these transactions after considering the following information
(i) Depreciate building by 5% and cars and furniture@ 10% per annum
(ii) Stationery unpaid ₹ 54,000
(iii) Advertisement includes unissued material worth ₹ 24,000.
(iv) Insurance prepaid ₹ 9,000
(v) Stock of car accessories ₹ 117,000
(2) Post them into ledger and prepare trial balance
(3) Prepare financial statements for the year ended 31st December, 2016.
Shubhi Goswami 4 months, 1 week ago
2Thank You