This accounting problem is solved step by step below, with detailed explanations to help you understand the method and arrive at the correct answer.
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\pounds5,320
Here is the two-column cash book for the bedroom furniture shop for July 2016:
\hline Date & Particulars & F & Cash (\pounds) & Bank (\pounds) & Date & Particulars & F & Cash (\pounds) & Bank (\pounds) \\ \hline 2016 & & & & & 2016 & & & & \\ July 1 & Capital & & 10,000 & & July 2 & Rent & & 1,000 & \\ July 3 & G. Broad (Loan) & & & 12,000 & July 4 & J. Fine & & & 1,800 \\ July 5 & Sales & & 800 & & July 9 & A. Moore & & 300 & \\ July 7 & F. Love & & & 200 & July 16 & Bank (Contra) & C & 4,000 & \\ July 11 & Sales & & & 600 & July 19 & R. Onions & & & 2,000 \\ July 15 & P. Hood & & 700 & & July 26 & Motor Expenses & & & 460 \\ July 16 & Cash (Contra) & C & & 4,000 & July 30 & Cash (Contra) & C & & 320 \\ July 22 & Sales & & & 1,200 & July 31 & Wages & & 1,200 & \\ July 30 & Bank (Contra) & C & 320 & & July 31 & Balance c/d & & 5,320 & 13,420 \\ \cline{1-5} \cline{6-10} & Total & & 11,820 & 18,000 & & Total & & 11,820 & 18,000 \\ \cline{1-5} \cline{6-10} Aug 1 & Balance b/d & & 5,320 & 13,420 & & & & & \\ \hline \end{array}$$ * **Explanation of entries:** * **Debit side (Receipts):** All money received, whether in cash or directly into the bank, is recorded here. Contra entries (C) indicate transfers between the cash and bank accounts within the business. * **Credit side (Payments):** All money paid out, whether in cash or by cheque from the bank, is recorded here. Contra entries (C) also appear here for transfers. * **Balance c/d (carried down):** This is the closing balance for the month, calculated as total debits minus total credits for each column. It is placed on the side with the smaller total to make both sides equal. * **Balance b/d (brought down):** This is the opening balance for the next month, which is the same as the closing balance from the previous month, but recorded on the opposite side (debit side for positive balances). * **Calculations for balances:** * **Cash Column:** * Total Debits: $\pounds10,000 + \pounds800 + \pounds700 + \pounds320 = \pounds11,820$ * Total Credits: $\pounds1,000 + \pounds300 + \pounds4,000 + \pounds1,200 = \pounds6,500$ * Balance c/d: $\pounds11,820 - \pounds6,500 = \text{\pounds5,320}$ * **Bank Column:** * Total Debits: $\pounds12,000 + \pounds200 + \pounds600 + \pounds4,000 + \pounds1,200 = \pounds18,000$ * Total Credits: $\pounds1,800 + \pounds2,000 + \pounds460 + \pounds320 = \pounds4,580$ * Balance c/d: $\pounds18,000 - \pounds4,580 = \text{\pounds13,420}$Get instant step-by-step solutions to any question. Free to start.
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|l|l|l|r|r||l|l|l|r|r| Date & Particulars & F & Cash () & Bank () & Date & Particulars & F & Cash () & Bank () \\ 2016 & & & & & 2016 & & & & \\ July 1 & Capital & & 10,000 & & July 2 & Rent & & 1,000 & \\ July 3 & G.
This accounting problem is solved step by step below, with detailed explanations to help you understand the method and arrive at the correct answer.