What will be entry for that: Busines strarted with brrowed
cash Rs. 25000 from Mr. X. if capital will be creadit.
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Answer Posted / shikha
The above question is in reference to a "Sole Proprietorship" It will have two solutions:
Case I In this treatment, we would consider that the proprietor has taken the loan from Mr. X privately seperate of the business concern. In such a situation the entry in the books of the firm would be:
Cash A/c Dr. 25,000
To Capital A/c 25,000
(Being Capital introduced in business)
Case II In this we would assume that the loan is taken by the proprietor keeping the business into consideration. The entry would be:
Cash A/c Dr. 25,000
To Capital A/c 25,000
(Being Capital introduced in business)
Capital A/c Dr. 25,000
To Mr. X's Loan A/c 25,000
(Being Mr. X's Loan recognized for
financing capital)
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From the following particulars taken on 31 December, 1995, you are required to prepare a bank reconciliation statement to reconcile the bank balance shown in the Cash Book with that shown in the Pass Book: (i) Balance as per Pass Book on 31 December, 1995, O/D Rs 1,027. (ii) Four cheques drawn on 31 December but not cleared till January are as follows: Rs 12; Rs 1,021; Rs 98; and Rs 113. (iii) Interest on O/D not entered in Cash Book Rs 51. (iv) Three cheques received on 30 December and entered in the bank column of the Cash Book but not lodged in bank for collection till 3 January next: Rs 1,160; Rs 2,100; and Rs 2,080. (v) Cost of cheque book, Pass Book, etc; Rs 1.50 entered twice erroneously in Cash Book in November. (vi) A Bill Receivable for Rs 250 due on 29 December, 1995 was passed to the bank for collection on 28 December, 1990 and was entered in Cash Book forthwith whereas the proceeds were credited in the Pass Book only in January following. (vii) Chamber of Commerce subscription Rs 10 paid by bank on 1 December, 1990 had not been entered in the Cash Book. (viii) Bank charges of Rs 5 had been debited in the pass book twice erroneously. . . . plz be fast
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