Journal Entries in the books of MNM Co.

Date Particulars Debit Rs. Credit Rs.

1/1/2010 Cash Ac Dr 150,000
To Capital Ac 150,000
(Being Capital brought in as Cash)

1/5/2010 Furniture Ac Dr 45,000

To Capital Ac 45,000
(Being Capital brought in as Furniture)

1/10/2010 Motor Car Ac Dr 75,000

To Capital Ac 75,000
(Being Capital brought in as Motor Car
valued at Fair Value)

1/20/2010 Purchases Ac Dr 50,000

To Cash Ac 40,000
To Creditors 10,000
(Being purchases made partly in cash
and partly in credit)

1/25/2010 Cash Ac Dr 35,000

To Sales Ac 35,000
(Being Cash sales made)

1/31/2010 Salary Ac Dr 13,000

To Cash Ac 13,000
(Being Salary expenses paid)

1/31/2010 Salary Ac Dr 2,000

To Outstanding Expenses Ac 2,000
(Being Salary due but not paid)

1/31/2010 Debtors Ac / Accounts Receivable Ac Dr 39,000

To Sales Ac 39,000
(Being Credit Sales made)

2/10/2010 Equipment Ac Dr 19,500

To Cash Ac 19,500

(Being Equpiment purchased and

installation and handling cost
capitalised along with the purchase
price)
2/20/2010 Prepaid Expenses Ac Dr 5,500
To Cash Ac 5,500

2/28/2010 Salary Ac Dr 15,000

To Cash Ac 15,000

2/28/2010 Outstanding Expenses Ac Dr 2,000

To Cash Ac 2,000

(Being Outstanding Expenses of last

month paid in the current month)

Trial Balance

Dr Cr
Cash Ac 90,000
Debtors Ac / Accounts Receivable Ac 39,000
Furniture Ac 45,000
Motor Car Ac 75,000
Purchases Ac 50,000
Salary Ac 30,000
Equipment Ac 19,500
Prepaid Expenses Ac 5,500
Capital 270,000
Creditors 10,000
Sales Ac 74,000
354,000 354,000
P&L

Debits Amt Credits Amt

Purchases 50,000 Sales 74,000
Salary 30,000 Closing Stock 13,000
Profit 7,000

87,000 87,000

BS

Liabilities Amt Assets Amt

Capital 270,000 Furniture Ac 45,000

Reserves & Surplus 7,000 Motor Car Ac 75,000

Creditors 10,000 Equipment Ac 19,500

Cash Ac 90,000

Debtors Ac / Accounts Receivable Ac 39,000

Prepaid Expenses Ac 5,500

Inventory 13,000

287,000 287,000