LEDGER BALANCING (IE) EXAMPLE

LEDGER BALANCING IE EXAMPLE

FOR OLD BUSINESS

The following are some of the balancing appearing in the ledger of trader on 31-12-1995. Compute gross profit taking and closing stock as Rs 12000.

Opening stock 1-1-95                                             - 6000

Purchases                                                                - 48000

Purchases returns                                                    - 4000

Sales                                                                        - 63200

Sales returns                                                            - 1600

Wages                                                                      - 4000

Solution :

Cost of goods sold = Opening stock + net purchases + Wages – Closing stock

= Rs.6000 + 44000 + 4000 – 12000

= Rs 42000

Net sales = Sales – Sales Returns

= Rs 63,200 - 1600

= Rs 61,600

Gross Profit = Net Sales – Cost of goods sold

= Rs 61,600 – 42,000

= Rs 19,600

DIFFERENCES BETWEEN THE JOURNAL AND THE LEDGER

JOURNAL	LEDGER
It is subsidiary book	It is main or principle book
This is book of original	This is book of final entry
Its is daily record transactions are recorded in this book in the chronological order	Posting is done periodically may be weekly fortnighty or monthly
Entering the transaction in the journal is called journalising	The act of recording entries in ledger called posting
Journal gives information in the form of entries	Ledger contains information in the form of accounts