On 1st Jan 2012, Mallam Dangote commenced a trading business with N100,000 cash and a cheque of N70,000 from lottery. Record these transactions in a journal entry.

Economics
On 1st Jan 2012, Mallam Dangote commenced a trading business with N100,000 cash and a cheque of N70,000 from lottery. Record these transactions in a journal entry.

ScanSolve AI Answer

Answer

\begin{array}{|l|l|r|r|} \hline Date & Particulars & Debit (N) & Credit (N) \ \hline 2012 Jan 2 & Bank Account & 45,000 & \ & Cash Account & & 45,000 \ & (Being cash deposited into bank) & & \ \hline 2012 Jan 2 & General Expenses Account & 4,200 & \ & Agreement Fees Account & 1,500 & \ & Cash Account & & 5,700 \ & (Being expenses paid in cash) & & \ \hline 2012 Jan 2 & Furniture and Fittings Account & 25,000 & \ & Bank Account & & 25,000 \ & (Being furniture and fittings acquired by cheque) & & \ \hline \end{array}

Here are the journal entries for the given transactions.

3 (a) Mallam Dangots commenced business by introducing personal cash and a cheque as capital.

DateParticularsDebit(N)Credit(N)2012Jan1CashAccount100,000Owner′sCapitalAccount100,000(Beingcashintroducedascapital)2012Jan1BankAccount70,000Owner′sCapitalAccount70,000(Beingchequeintroducedascapital)\begin{array}{|l|l|r|r|} \hline Date & Particulars & Debit (N) & Credit (N) \\ \hline 2012 Jan 1 & Cash Account & 100,000 & \\ & Owner's Capital Account & & 100,000 \\ & (Being cash introduced as capital) & & \\ \hline 2012 Jan 1 & Bank Account & 70,000 & \\ & Owner's Capital Account & & 70,000 \\ & (Being cheque introduced as capital) & & \\ \hline \end{array}

3 (b) On 2nd Jan 2012, transactions include depositing cash into the bank, paying for business expenses, and acquiring furniture and fittings.

Step 1: Record the deposit of cash into the business bank account. Cash decreases (credit) and Bank increases (debit).

Step 2: Record the payment for business expenses. General Expenses and Agreement Fees are expenses (debit), and Cash decreases (credit).

Step 3: Record the acquisition of furniture and fittings paid by cheque. Furniture and Fittings (asset) increases (debit), and Bank (asset) decreases (credit).

\begin{array{|l|l|r|r|} \hline Date & Particulars & Debit (N) & Credit (N) \\ \hline 2012 Jan 2 & Bank Account & 45,000 & \\ & Cash Account & & 45,000 \\ & (Being cash deposited into bank) & & \\ \hline 2012 Jan 2 & General Expenses Account & 4,200 & \\ & Agreement Fees Account & 1,500 & \\ & Cash Account & & 5,700 \\ & (Being expenses paid in cash) & & \\ \hline 2012 Jan 2 & Furniture and Fittings Account & 25,000 & \\ & Bank Account & & 25,000 \\ & (Being furniture and fittings acquired by cheque) & & \\ \hline \end{array} }
Was this helpful?

Need help with your own homework?

Get instant step-by-step solutions to any question. Free to start.

Ask Your Question
Got a syllabus? Photograph it and I'll tell you what's due and what's worth the most.
Handwritten step-by-step solution preview

Handwritten Step-by-Step Solution

Get this as a handwritten image on WhatsApp — like a tutor wrote it for you.

Try on WhatsApp

More Economics Questions

QDefine market failure What is externalitiesQexplain environmental participation considering the view of classical and neoclassical economicQexplain environmental attitude considering the view of classical and neoclassical economicQexplain environmental skills considering the view of classical and neoclassical economicQLow-income economies generally have a very low percentage of their working population employed in th…
See all Economics questions →

Still have questions?

Quick Answer

Record the deposit of cash into the business bank account. Cash decreases (credit) and Bank increases (debit).

On 1st Jan 2012, Mallam Dangote commenced a trading business with N100,000 cash and a cheque of N70,000 from lottery. Record these transactions in a journal entry.
Economics

This economics question tests your understanding of economic models and analysis. The step-by-step answer below applies the relevant framework and explains the reasoning.

ScanSolve AI Answer
Here are the journal entries for the given transactions. 3 (a) Mallam Dangots commenced business by introducing personal cash and a cheque as capital. |l|l|r|r| Date & Particulars & Debit (N) & Credit (N) \\ 2012 Jan 1 & Cash Account & 100,000 & \\ & Owner's Capital Account & & 100,000 \\ & (Being cash introduced as capital) & & \\ 2012 Jan 1 & Bank Account & 70,000 & \\ & Owner's Capital Account & & 70,000 \\ & (Being cheque introduced as capital) & & \\ 3 (b) On 2nd Jan 2012, transactions include depositing cash into the bank, paying for business expenses, and acquiring furniture and fittings. Step 1: Record the deposit of cash into the business bank account. Cash decreases (credit) and Bank increases (debit). Step 2: Record the payment for business expenses. General Expenses and Agreement Fees are expenses (debit), and Cash decreases (credit). Step 3: Record the acquisition of furniture and fittings paid by cheque. Furniture and Fittings (asset) increases (debit), and Bank (asset) decreases (credit). |l|l|r|r| Date & Particulars & Debit (N) & Credit (N) \\ 2012 Jan 2 & Bank Account & 45,000 & \\ & Cash Account & & 45,000 \\ & (Being cash deposited into bank) & & \\ 2012 Jan 2 & General Expenses Account & 4,200 & \\ & Agreement Fees Account & 1,500 & \\ & Cash Account & & 5,700 \\ & (Being expenses paid in cash) & & \\ 2012 Jan 2 & Furniture and Fittings Account & 25,000 & \\ & Bank Account & & 25,000 \\ & (Being furniture and fittings acquired by cheque) & & \\