Pass the necessary journal entry . A horse bought on April 20 died on April 30. It's carcase was sold for 5000 rupees.
The following will be the Journal entries-
Journal | |||||
Date | Particulars | L.F. | Debit Amount (Rs) | Credit Amount (Rs) | |
April 20 | Livestock A/c (Horse) | Dr. |
| 20,000 |
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| To Cash A/c |
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| 20,000 |
| (Horse purchased for Rs 20,000) |
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April 30 | Cash A/c | Dr. |
| 5,000 |
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| To Livestock A/c (Horse) |
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| 5,000 |
| (Carcase of horse was sold for Rs 5,000) |
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| 15,000 |
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April 30 | Profit and Loss A/c | Dr. |
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| 15,000 |
| To Livestock A/c (Horse) |
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| (Loss on sale of carcase of horse debited to profit and loss account) |
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Alternatively, for the above two entries, a single Journal entry can also be passed as follows. | |||||
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April 30 | Cash A/c | Dr. |
| 5,000 |
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| Profit and Loss A/c | Dr. |
| 15,000 |
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| To Livestock A/c (Horse) |
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| 20,000 |
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