1. **State the problem:** We need to compile a 3-Column Cash Book for Donald Duck for December 2023, recording Bank, Cash, and Discount columns, accounting for all transactions, and compute balances at 31 December 2023 and bring them down for 1 January 2024. 2. **Initial balances:** - Bank: $5,500 - Cash: $7,000 - Discounts (both cash and bank discount columns start at $0 since not stated) 3. **Analyze transactions (debit or credit):** - 2 Dec: Paid $1,000 cheque loan payable → Bank credit (payment) - 3 Dec: Purchased computer $1,210 paid by cheque → Bank credit Sales $1,800 cheque received → Bank debit (receipt) Received cheque from Natalie $2,000 after deducting $150 cash discount → Bank debit $2,000, Discount allowed in Bank column $150 - 5 Dec: Paid utilities $600 cash → Cash credit Telephone bill $300 cheque → Bank credit - 6 Dec: Deposited $500 cash to bank → Cash credit, Bank debit - 7 Dec: Paid William $3,000 by cheque after deducting $300 cash discount Payment = $2,700 cheque (Bank credit), Discount received $300 bank debit - 12 Dec: Paid William $3,000 cheque → Bank credit - 17 Dec: Purchase $730 paid by cheque → Bank credit - 19 Dec: Owner withdrew $600 from bank → Bank credit, Cash debit (owner’s use cash is usually treated as cash withdrawn? Usually owner's withdrawal reduces bank, no cash involved. Here likely bank credit only.) - 28 Dec: Received commission by cheque of $2,000 → Bank debit 4. **Set up ledger columns:** - Bank Debit, Bank Credit - Cash Debit, Cash Credit - Discount Debit, Discount Credit 5. **Record transactions line by line:** | Date | Particulars | Bank Dr | Bank Cr | Cash Dr | Cash Cr | Discount Dr | Discount Cr | |------|--------------------|---------|---------|---------|---------|-------------|-------------| | Bal b/d | | 5,500 | | 7,000 | | | | | 2 Dec| Loan paid | | 1,000 | | | | | | 3 Dec| Purchase | | 1,210 | | | | | | 3 Dec| Sales | 1,800 | | | | | | | 3 Dec| From Natalie | 2,000 | | | | 150 (Dr) | | | 5 Dec| Utilities paid cash | | | | 600 | | | | 5 Dec| Telephone paid | | 300 | | | | | | 6 Dec| Deposit cash bank | 500 | | | 500 | | | | 7 Dec| William paid cheque | | 2,700 | | | 300 (Dr) | | | 12 Dec| William paid cheque| | 3,000 | | | | | | 17 Dec| Purchase | | 730 | | | | | | 19 Dec| Owner withdraw | | 600 | | | | | | 28 Dec| Commission rec'd | 2,000 | | | | | | 6. **Sum each column:** - Bank Debit = 5,500 + 1,800 + 2,000 + 500 + 2,000 = $11,800 - Bank Credit = 1,000 + 1,210 + 300 + 2,700 + 3,000 + 730 + 600 = $9,540 - Cash Debit = 7,000 (b/d) - Cash Credit = 600 + 500 = $1,100 - Discount Debit = 150 + 300 = $450 - Discount Credit = 0 7. **Calculate closing balances:** - Bank balance = Bank Debit - Bank Credit = $11,800 - $9,540 = $2,260 (debit balance means bank has $2,260 available) - Cash balance = Cash Debit - Cash Credit = $7,000 - $1,100 = $5,900 (cash on hand) - Discount balance = Discount Debit - Discount Credit = $450 - 0 = $450 (this is discount allowed, an expense, usually no balance to carry) 8. **Bring down balances at 1 Jan 2024:** - Bank Balance b/d = $2,260 debit - Cash Balance b/d = $5,900 debit **Final balances for 1 January 2024:** - Bank: $2,260 - Cash: $5,900 - Discount: no balance carried forward --- **Summary:** The 3-column cash book records all transactions with debit and credit in bank, cash, and discount columns accordingly. The closing balances are calculated by subtracting total credits from total debits in respective columns.