Certainly! Let's walk through each transaction step by step and prepare the corresponding journal entries for ABC Company.
### 1. Started business with cash Rs. 50,000. (1-1-2023)
This entry records the initial capital brought into the business in the form of cash.
Journal Entry:
```
Date: 1-1-2023
--------------------------------------
Cash Account Dr. 50,000
To Capital Account 50,000
(Being business started with cash)
```
### 2. Proprietor life insurance premium paid Rs. 5,000. (6-1-2023)
This entry records the payment of the life insurance premium, which is a personal expense of the owner.
Journal Entry:
```
Date: 6-1-2023
--------------------------------------
Drawings Account Dr. 5,000
To Cash Account 5,000
(Being life insurance premium paid)
```
### 3. Cash withdrawn from bank for office use Rs. 10,000. (11-1-2023)
This entry records the withdrawal of cash from the bank for office use.
Journal Entry:
```
Date: 11-1-2023
--------------------------------------
Cash Account Dr. 10,000
To Bank Account 10,000
(Being cash withdrawn from bank for office use)
```
### 4. Cash withdrawn from bank for personal use Rs. 15,000. (18-1-2023)
This entry records the withdrawal of cash from the bank for the proprietor's personal use.
Journal Entry:
```
Date: 18-1-2023
--------------------------------------
Drawings Account Dr. 15,000
To Cash Account 15,000
(Being cash withdrawn from bank for personal use)
```
### 5. Goods withdrawn for personal use Rs. 8,000. (23-1-2023)
This entry records the withdrawal of goods by the proprietor for personal use, affecting the inventory.
Journal Entry:
```
Date: 23-1-2023
--------------------------------------
Drawings Account Dr. 8,000
To Purchases Account 8,000
(Being goods withdrawn for personal use)
```
### Summary
- After making the initial cash entry for starting the business, the cash balance was Rs. 50,000.
- Following the life insurance premium payment, the cash balance reduced to Rs. 45,000.
- With the withdrawal of Rs. 10,000 for office use, the cash balance stood at Rs. 35,000.
- After withdrawing Rs. 15,000 for personal use, the remaining cash balance was Rs. 20,000.
At the end of these transactions:
- Cash balance: Rs. 20,000
- Noted impact on the goods inventory due to personal withdrawal: Rs. 8,000 reduction
These entries conform to the given transactions and reflect accurate accounting practices for ABC Company.
