Pass Journal Entries: Mr. A started business with 50,000$. Bought merchandise for cash

10,000$. Sold goods for cash 15,000$. Purchased goods from X on credit

for 5,000$. Sold good for cash6,000$. Purchased furniture for office use in

cash 4,000$. Paid wages in cash 4,000$.

May 1 2009 Mr. A Started business with cash.

Debit: Cash (increase an assets). (current asset)

Capital is introduced in the business is an increase in liability.

(Owner investment)

Date Description Post.Ref

Debit$ Credit

$

2009

May 1

Cash a/c

Capital a/c

Introduced cash in business

50,000

50,000

(2 May 2009 Bought merchandise for cash 10,000)

Debit : Merchandise increase in expenses (merchandise purchased for resale).

Credit : Cash credit because going out (decrease in assets). (current assets)

Date Description Post.

Ref

Debit

$

Credit

$

May 2 Merchandise a/c

Cash a/c

Merchandise purchased

10,000

10,000

May 3 Sold goods for cash 15,000$. Debit: cash (increase in an assets

a/c) (cash is coming into the business that is the increased in an asset.)

Credit: Sale (increase in revenue a/c)

Date Description Post.Ref

Debit

$

Credit

$

May 3 Cash a/c

sale a/c

Sold goods for cash

15,000

15,000

Purchased goods from x 5000$. Debit: Merchandise a/c

(increase in expenses)

•Credit: Account payable (increase in liability)

Date Description Post.

Ref

Debit

$

Credit

$

May 4

Merchandise a/c

Act. Pay a/c

(Goods purchased on account from x)

5,000

5,000

5 may 2009 Sold goods to b for 6,000$.

Debit: Account receivable (increase in an assets a/c)

Credit: Sale (increase in revenue a/c)

Date Description Post. Ref

Debit

$

Credit

$

May 5 Account Receivable (B) a/c

Sale a/c

Goods sold on account

6,000

6,000

(6 may 2009 Furniture purchased for office use in cash 4,000$.)

Debit: Furniture (increase in an assets). (fixed asset).

Credit: Cash (Decrease in an asset)

Date Description Post. Ref

Debit

$

Credit

$

May 6 Furniture a/c

Cash a/c

Asset purchased

4,000

4,000

(7 may 2009 plant purchased on cash 10,000$.)

Debit: Plant (Increase in an assets).

Credit: Cash (Decrease in an asset)

Date Description Post. Ref

Debit

$

Credit

$

May 7 Plant a/c

Cash a/c

Plant purchased

10,000

10,000

(7 may 2009 Wages paid in cash 4,000$).

Debit: Wages (Increase in Expenses)

Credit: Cash (decrease in asset)

Date Description post. Ref

Debit

$

Credit

$

May 7 Wages a/c

Cash a/c

Wages paid

4,000

4,000

02 : Purchased merchandise for cash 15000004 : Purchased furniture for cash 1500006 : Purchased merchandise from Ahmad worth

5000009 : Sold merchandise in cash 3500010 : Returned merchandise to Ahmad 2000012 : Sold merchandise to Sameen for 2000017 : Settle the claim of Ahmad in full24 : Received cash from Sameen 2000030 : Paid rent expense in cash 25000

01: Laiba started a business with cash 50000$02: Purchased a car for Cash 10000$05: Purchased merchandise from Sami 5000$11: Purchased Furniture for cash 3000$15: Sold merchandise to Sania for 2500$19: Salaries paid 6000$ 20: Sania returned merchandise worth 1000$27: Received cash from Sania 1500$

2010 March, 1:Mr.Peter commences business as a computer merchant trading under the name of “Computer Point”with capital of 400000 in cash

3: He buys 10 computers @30000 each from “Brilliant computers Ltd.” on credit15: He opens a bank account by depositing 100000 cash20: He sells 6 computers on credit to ABC computers @ 35000 each22: Paid wages 500025: He issues a cheque to Brilliant computers Ltd. for 30000.

2

Oct 1. The owner Fahad invested an additional $80,000 cash in the business.

Oct 5. Purchased a plot for $102,000 of which $30600 was paid in cash , a account payable is created for balance.

Oct15.Issued a check for $71400 in full payment of an account payable.

Oct18.Borrowed $30,000 cash from the bank by signing a 90 day note payable.

Oct23. Collected an account receivable of $2900 from customer

Oct30. Acquired office equipment for $6000 made a cash down payment of $2000,balance to be paid with in 30 days.

1ST Oct: Fahad as an owner started a business with cash so for fahad you will apply the rule of Owner equity and 2nd account is cash.so for cash u will apply the rule of Asset.

Increase in asset in shape of cash Increase in owner equity as capital so entry

will be Cash a/c Debit 80000 Capital a/c Credit 80000(started business with cash)

05th Jan: It is a compound entry. compound entry involves three or more than three accounts. So

Plot a/c Debit 102000(Increase in asset) Cash a/c Credit 30600(decrease in

Asset) Account Payable Cr 71400(Increase in

Liability) Note: 102000-30600=71400 for balance

u have created liability of outsider

15th Oct: we have issued a check in favor of an account payable instead of cash so he will draw money from our bank account then entry is:

Account payable Dr 71400(Decrease in Liability)

Bank a/c Cr 71400(Decrease in Asset)

Oct18: we have taken loan from a bank so increased in Asset and increased in outsider Liability

Cash a/c Dr 30000(Increase in Asset) Bank Loan Cr 30000(Increase in

Liability)

23 Oct: Received cash from A/c Receivable. It means increase in cash bcoz we have received cash and decrease in another asset i.e. A/c Receivable

Cash a/c Dr 2900(Increase in Asset) A/c Receivable Cr 2900(Decrease in

asset)

30th Oct: Again Compound Entry: Office Equipment Dr 6000(increase in Asset) Cash a/c Cr 2000(Decrease in Asset) A/c Payable Cr 4000 (Increase in Liability)

Note: Out of 6000 we have paid only 2000 so a portion(balance) is still payable to creditor i.e.

6000 – 2000= 4000(Balance Amount)