Asghar Trading Corporation was established on 4 January, 2020. The following business transactions were conducted during the month: - January 2020. 04. Invested Rs. 400,000 cash by the proprietor. 05. Purchased merchandise at the cash price of Rs. 250

Below are the steps to record the transactions of Asghar Trading Corporation for January 2020. We will prepare:

1. A General Journal
2. Ledger Accounts
3. A Trial Balance

### 1) General Journal

| Date        | Account Title                        | Debit (Rs.)  | Credit (Rs.)  | Description                                                   |
|-------------|-------------------------------------|---------------|----------------|---------------------------------------------------------------|
| 04 Jan 2020| Cash                                 | 400,000       |                | Invested cash by proprietor                                   |
|             | Capital                               |               | 400,000        |                                                               |
| 05 Jan 2020| Merchandise Inventory                 | 250,000       |                | Purchased merchandise at cash price                           |
|             | Cash                                 |               | 250,000        |                                                               |
| 06 Jan 2020| Rent Expense                         | 40,000        |                | Paid rent for the month                                       |
|             | Cash                                 |               | 40,000         |                                                               |
| 08 Jan 2020| Fixtures                             | 15,000        |                | Purchased and installed fixture                                 |
|             | Cash                                 |               | 15,000         |                                                               |
| 09 Jan 2020| Cash                                 | 22,000        |                | Sold goods for cash                                          |
|             | Sales Revenue                       |               | 22,000         |                                                               |
|             | Cost of Goods Sold                  | 15,000        |                | Cost of goods sold                                            |
|             | Merchandise Inventory                 |               | 15,000         |                                                               |
| 10 Jan 2020| Cash                                 | 60,000        |                | Sold merchandise for cash                                     |
|             | Sales Revenue                       |               | 60,000         |                                                               |
|             | Cost of Goods Sold                  | 40,000        |                | Cost of goods sold                                            |
|             | Merchandise Inventory                 |               | 40,000         |                                                               |
| 13 Jan 2020| Utility Expense                     | 4,000         |                | Paid utility bill                                            |
|             | Cash                                 |               | 4,000          |                                                               |
| 16 Jan 2020| Accounts Receivable                   | 45,000        |                | Sold merchandise on credit                                    |
|             | Sales Revenue                       |               | 45,000         |                                                               |
|             | Cost of Goods Sold                  | 30,000        |                | Cost of goods sold                                            |
|             | Merchandise Inventory                 |               | 30,000         |                                                               |
| 18 Jan 2020| Merchandise Inventory                | 50,000        |                | Purchased merchandise on credit                                |
|             | Accounts Payable                     |               | 50,000         |                                                               |
| 26 Jan 2020| Cash                                 | 30,000        |                | Collected cash from Mr. Subhan                                 |
|             | Accounts Receivable                   |               | 30,000         |                                                               |
| 30 Jan 2020| Salary Expense                      | 25,000        |                | Paid salary to employees                                      |
|             | Cash                                 |               | 25,000         |                                                               |

### 2) Ledger Accounts

#### Cash Account

| Date        | Details                       | Debit (Rs.) | Credit (Rs.) | Balance (Rs.)  |
|-------------|-------------------------------|--------------|---------------|-----------------|
| 04 Jan 2020 | Investment                    | 400,000      |               | 400,000         |
| 05 Jan 2020 | Merchandise Purchase          |              | 250,000       | 150,000         |
| 06 Jan 2020 | Rent Expense                  |              | 40,000        | 110,000         |
| 08 Jan 2020 | Fixtures Purchase             |              | 15,000        | 95,000          |
| 09 Jan 2020 | Cash Sale                     | 22,000       |               | 117,000         |
| 10 Jan 2020 | Cash Sale                     | 60,000       |               | 177,000         |
| 13 Jan 2020 | Utility Expense               |              | 4,000         | 173,000         |
| 26 Jan 2020 | Collection from Mr. Subhan    | 30,000       |               | 203,000         |
| 30 Jan 2020 | Salary Expense                |              | 25,000        | 178,000         |

#### Capital Account

| Date        | Details                       | Debit (Rs.) | Credit (Rs.) | Balance (Rs.)  |
|-------------|-------------------------------|--------------|---------------|-----------------|
| 04 Jan 2020 | Investment                    |              | 400,000       | 400,000         |

#### Merchandise Inventory Account

| Date        | Details                       | Debit (Rs.) | Credit (Rs.) | Balance (Rs.)  |
|-------------|-------------------------------|--------------|---------------|-----------------|
| 05 Jan 2020 | Purchase                     | 250,000      |               | 250,000         |
| 09 Jan 2020 | Cost of Goods Sold            |              | 15,000        | 235,000         |
| 10 Jan 2020 | Cost of Goods Sold            |              | 40,000        | 195,000         |
| 16 Jan 2020 | Cost of Goods Sold            |              | 30,000        | 165,000         |
| 18 Jan 2020 | Purchase                     | 50,000       |               | 215,000         |

#### Sales Revenue Account

| Date        | Details                       | Debit (Rs.) | Credit (Rs.) | Balance (Rs.)  |
|-------------|-------------------------------|--------------|---------------|-----------------|
| 09 Jan 2020 | Cash Sale                    |              | 22,000        | 22,000          |
| 10 Jan 2020 | Cash Sale                    |              | 60,000        | 82,000          |
| 16 Jan 2020 | Credit Sale                  |              | 45,000        | 127,000         |

#### Cost of Goods Sold Account

| Date        | Details                       | Debit (Rs.) | Credit (Rs.) | Balance (Rs.)  |
|-------------|-------------------------------|--------------|---------------|-----------------|
| 09 Jan 2020 | Merchandise Sold              | 15,000       |               | 15,000          |
| 10 Jan 2020 | Merchandise Sold              | 40,000       |               | 55,000          |
| 16 Jan 2020 | Merchandise Sold              | 30,000       |               | 85,000          |

#### Rent Expense Account

| Date        | Details                       | Debit (Rs.) | Credit (Rs.) | Balance (Rs.)  |
|-------------|-------------------------------|--------------|---------------|-----------------|
| 06 Jan 2020 | Rent Paid                    | 40,000       |               | 40,000          |

#### Utility Expense Account

| Date        | Details                       | Debit (Rs.) | Credit (Rs.) | Balance (Rs.)  |
|-------------|-------------------------------|--------------|---------------|-----------------|
| 13 Jan 2020 | Utility Bill Paid             | 4,000        |               | 4,000           |

#### Salary Expense Account

| Date        | Details                       | Debit (Rs.) | Credit (Rs.) | Balance (Rs.)  |
|-------------|-------------------------------|--------------|---------------|-----------------|
| 30 Jan 2020 | Salary Paid                   | 25,000       |               | 25,000          |

#### Accounts Receivable Account

| Date        | Details                       | Debit (Rs.) | Credit (Rs.) | Balance (Rs.)  |
|-------------|-------------------------------|--------------|---------------|-----------------|
| 16 Jan 2020 | Sale on Credit               | 45,000       |               | 45,000          |
| 26 Jan 2020 | Collection from Mr. Subhan    |              | 30,000        | 15,000          |

#### Accounts Payable Account

| Date        | Details                       | Debit (Rs.) | Credit (Rs.) | Balance (Rs.)  |
|-------------|-------------------------------|--------------|---------------|-----------------|
| 18 Jan 2020 | Purchase on Credit            |              | 50,000        | 50,000          |

#### Fixtures Account

| Date        | Details                       | Debit (Rs.) | Credit (Rs.) | Balance (Rs.)  |
|-------------|-------------------------------|--------------|---------------|-----------------|
| 08 Jan 2020 | Installation of Fixtures      | 15,000       |               | 15,000          |

### 3) Trial Balance

As of January 31, 2020

| Account Title              | Debit (Rs.) | Credit (Rs.) |
|---------------------------|--------------|---------------|
| Cash                      | 178,000      |               |
| Accounts Receivable       | 15,000       |               |
| Merchandise Inventory     | 215,000      |               |
| Fixtures                  | 15,000       |               |
| Capital                   |              | 400,000       |
| Sales Revenue             |              | 127,000       |
| Cost of Goods Sold        | 85,000       |               |
| Rent Expense              | 40,000       |               |
| Utility Expense           | 4,000        |               |
| Salary Expense            | 25,000       |               |
| Accounts Payable          |              | 50,000        |
|                         **Total** | **557,000**  | **557,000**           |

### Summary
The Trial Balance shows that the total debits and credits equal, indicating that the bookkeeping is correct for the period. The business transactions have been recorded accurately according to the double-entry accounting system.