Journal entries:

1) 1 jan

Cash A/c Dr 100000

To Capital A/c 100000

(Being capital invested in business )

2) Jan 1

Prepaid Rent A/c Dr 3000

To Cash A/c 3000

(Being 3 months rent paid in advance for office premises )

3) Jan 2

Purchases A/c Dr 800

To Cahs A/c 800

(Being office supplies purchased )

4) Jan 4

Bank A/c Dr 15000

To Cash A/c 15000

(Being cash deposited in bank )

5) Jan 5

Cash A/c Dr 2000

To Advacne fee received A/c 2000

(Being adavance fee received for investigation services )

6) Jan 6

Office Equipmet A/c Dr 10000

To note Payable A/c 10000

(Being pistol purchased by issuing note payable )

7) Jan 6

Insurance Expense A/c dr 600

To Cash A/c 600

(Being insuracne expenses paid for 1 year )

8) Jan 7

Travelling Expenses A/c Dr 400

Accomodation Expenses A/c Dr 1400

To Cash A/c 1800

(Being ticket & room rent paid )

9) Jan 10

Advacne fee Recieved A/c Dr 2000

To Service Revenue A/c 2000

(Being service revenue recognised )

10) Jan 15

Merchandise products purchases A/c Dr 20000

To Accounts Payable A/c 20000

(Being merchandise products purchased on terms 2/10,n/30 )

11) To Cash A/c 900

(Being frieght charges paid )

12) Jan 17

Accounts Receivable A/c Dr 18000

To Sale of merchandise A/c 18000

(Being merchandise sold to ananda publishers on terms of 5/10, n/30 )

13) Jan 18

Sales Return A/c Dr 4000

To Accounts Receivable A/c 4000

(Being sales made are returned by customer )

14) Jan 19

Accounts Payable A/c Dr 2000

To Purchase Return A/c 2000

(Being damaged goods are returned to jatayu )

15) Jan 23

Cash A/c Dr 18000

To Accounts Receivabe A/c 18000

(Being amount received from ananda publishers )

16) Jan 24

Accounts payable A/c Dr 18000

To Cash A/c 18000

(Being amount paid to jatayu against purchases )

Instructions:

1. Open ledger account and post the January transactions.
2. Prepare an income statement for the month ended January 31, 1974