OPENING ENTRY UNDER JOURNAL

·         LEARN OPENING ENTRY: JOURNAL
PLUS ONE ACCOUNT

·         MEANING OF OPENING ENTRY

·         A JOURNAL ENTRY BY MEANS OF WHICH THE BALANCES OF VARIOUS ASSETS,LIABILITIES AND CAPITAL APPEARING IN THE BALANCE SHEET OF THE PREVIOUS ACCOUNTING PERIOD ARE BROUGHT FORWARD IN THE BOOKS OF CURRENT ACCOUNTING PERIOD

·         KNOWN AS OPENING ENTRY

·         THIS ENTRY IS PASSED BY DEBITING ALL ASSETS AND CREDITING ALL LIABILITIES. IF THE CAPITAL IS NOT GIVEN THEN

·         ASSETS-LIABILITIES = CAPITAL

·         IF THE CAPITAL IS GIVEN, DIFFERENCE COMES ON DR SIDE IT IS GOOD WILL AND IF ON CREDIT SIDE THEN IT IS CAPITAL RESERVE.

·         METHOD OF RECORDING OPENING ENTRY

·         IT IS PASSED IN CASE OF AN EXISTING BUSINESS ONLY. ALL ASSETS, LIABILITIES AND CAPITAL APPEARING ACCOUNTS (INDIVIDUALLY)

·         THE OPENING JOURNAL ENTRY IS:-

·         ASSETS A/C         DR (INDIVIDUALLY)

·         TO LIABILITIES A/C     (INDIVIDUALLY)

·         TO CAPITAL A/C   

·         OPENING ENTRY

·         THE FOLLOWING BALANCES APPEARED IN THE BOOKS ON 31^ST MARCH 2016

·         CASH =15,000     

·         BANK =25,000

·         STOCK =20,000

·         DEBTORS 30,000

·         BUILDING =40,000

·         FURNITURE -5,000

·         SUNDRY CREDITORS = 15,000

·         BILLS PAYABLE =20,000

·         LOAN FROM BANK =25,000

·         ROUGH WORK

·         TOTAL ASSETS= 1,35,000

·         LESS LIABILITIES=  60,000

·         BALANCE AMOUNT=75,000

·         OPENING ENTRY ( SOLUTION)

·         CASH A/C    DR =15,000

·         BANK A/C    DR =25,000

·         STOCK A/C     DR =20,000

·         DEBTORS A/C  DR =30,000

·         BUILDINGS A/C   DR =40,000

·         FURNITURE'S A/C   DR =5,000

·         TO SUNDRY CREDITORS ACCOUNT =15000

·         TO BILL PAYABLE  ACCOUNT   = 20,000

·         TO BANK LOAN ACCOUNT        = 25,000

·         TO CAPITAL ACCOUNT ( BALANCING)  = 75000
( BEING OPENING ENTRY PASSED)

·         GOODWILL

·         ASSETS

• BUILDING =80,000
• CASH = 40,000

·         LIABILITIES

• LOAN  : 25,000
• CAPITAL : 1,25,000

·         ENTRY

·         BUILDING A/C -----DR=80,000

·         CASH A/C --------------DR 40,000

·         GOOD WILL A/C -----DR 30,000

·         TO LOAN A/C    25,000

·         TO CAPITAL A/C 1,25,000

·         ( BEING OPENING ENTRY PASSED)

·         CAPITAL RESERVE

·         ASSETS

• BUILDING =80,000
• CASH = 40,000

·         LIABILITIES

• LOAN  : 25,000
• CAPITAL : 75,000

·         ENTRY

·         BUILDING A/C -----DR=80,000

·         CASH A/C --------------DR 40,000

·         TO LOAN A/C    25,000

·         TO CAPITAL A/C 75,000

·         TO CAPITAL RESERVE A/C 20,000

·         ( BEING OPENING ENTRY PASSED)

·         PROBLEM

·         ASSETS =CASH IN HAND,1200,CASH IN BANK 40,800.STOCK OF GOODS RS 24,000,MACHINERY RS 60,000,FURNITURE RS 6,000.M/S NARAIN BROS OWE RS 9,000,MR KITTY OWE RS 15,000

·         LIABILITIES :-LOAN RS 30,000,SUM OWING TO BALWANT BROS LTD 12,000

·         PAID LIFE INSURANCE PREMIUM RS 1200

·         PAID RS 150 IN COST AS WAGES FOR INSTALLATION OF MACHINE

·         SOLD GOODS TO RAM PRICE RS 12,000 AND SUBJECT TO TRADE DISCOUNT 10% AND 5 % CASH DISCOUNT IF PAYMENT IS MADE IMMEDIATELY. RAM AVAILED CASH DISCOUNT

·         PAID FOR THE REPAIR OF MACHINERY RS 500

·         GOODS WORTH RS 42OO DISTRIBUTED AS SAMPLE         

·         OPENING ENTRY

·         ASSETS =CASH IN HAND,1200,CASH IN BANK 40,800.STOCK OF GOODS RS 24,000,MACHINERY RS 60,000,FURNITURE RS 6,000.M/S NARAIN BROS OWE RS 9,000,MR KITTY OWE RS 15,000

·         LIABILITIES :-LOAN RS 30,000,SUM OWING TO BALWANT BROS LTD 12,000

·         TOTAL ASSETS:-

·         CASH =1200

·         BANK=40,800

·         STOCK=24,000

·         MACHINERY=60,000

·         M/S NARAIN BROS=9000

·         MR KITTY =15,000

·         TOTAL =1,50,000

·         LIABILITIES=42,000

·         CAPITAL= 1,50,000-42,000=1,08000

·         OPENING ENTRY