Compound Journal Entry

Compound Journal Entry :

Transactions which are inter-connected and have taken place simultaneously are recorded by means of a compound or combined journal entry. For example receipt of cash from a debtor and allowance of discount to him are recorded by means of a single journal entry. Similarly transactions of the same nature are recorded by means of a combined entry provided they take place the same day. For example, if amount is spent on the same day for salaries, wages, stationery, rent, etc. a combined entry can be passed debiting all the relevant nominal accounts with respective amounts and crediting cash account with the total amount spent.

Illustration 1:
Journalise the following transactions:

2012		Rs.
Mar.,	2 Commenced business with cash	2,50,000
“	4 Purchased furniture for cash	20,000
“	” 4 Cash purchases	1,45,000
“	” 5 Deposited with bank	30,000
“	” 6 Purchase from Patil	40,000
“	Sold to Natarajan for cash	14,300
“	” 7 Stationery purchased	1,050
“	” 7 Purchase from Salil	26,000
“	” 7 Sold to Mukherjee	8,080
“	” 9 Rent for two years paid in advance	24,000
“	” 9 Drawings by the proprietor for household expenses	4,000
“	Goods taken out by the proprietor for domestic use	500
“	” 9 Cash withdrawn from Bank	25,000
“	” 10 Sold to Mathur on credit	9,850
“	” 11 Purchases made, payment through cheque	2,900
“	” 14 Cash received from Patil on account	10,000
“	” 14 Cash paid to Salil after deduction of discount ` 1300	24,700
“	” 17 Cash received from Mathur in full settlement of his account	9,750
“	” 18 Mukherjee becomes insolvent. A dividend of 50 paise in a rupee is received	4,040
“	” 18 Purchase of a Scooter for cash	30,000
“	” 20 Sold goods to Aggarwal	8,640
“	Sales to Nayak	3,780
“	” 24 Cartage paid in cash	150
“	” 24 Repairs to Scooter, payment not yet made	170
“	” 26 Payment of cash for petrol	550
“	” 26 Purchases of goods for cash	12,000
“	” 26 Purchases of Office Equipment for cash	12,100
“	” 27 Repairs bill paid in cash	170
“	” 28 Aggarwal returns goods	400
“	” 31 Depreciation on furniture	100
“	Depreciation on Scooter	200
“	” 31 Salary to clerk outstanding	1,800
“	” 31 Adjustment for the month’s outstanding rent	1,000
“	” 31 Bank charges for the month	50
“	” 31 Interest on capital for the month	1,250
“	Salary to be credited to proprietor	2,000
“	” 31 Salil agrees to take some defective goods purchased from him and immediately refunds the money	700

Solution:

JOURNAL

Date	Particulars	L.F.	Debit (Rs.)	Credit (Rs.)
2012 Mar., 2	Cash Account Dr.		2,50,000
	To Capital Account (For cash brought in by proprietor as capital)			2,50,000
” 4	Furniture Account Dr.		20,000
	To Cash Account			20,000
	(For purchase of furniture for cash)
” 4	Purchases Account Dr.		1,45,000
	To Cash Account			1,45,000
	(For purchase of goods-in-trade for cash)
” 5	Bank Dr.		30,000
	To Cash Account			30,000
	(For cash deposited with bank)
” 6	Purchases Account Dr.		40,000
	To Patil			40,000
	(For credit purchases of goods in trade, Patil being the supplier)

	Cash Account Dr.		14,300
” 6	To Sales Account			14,300
	(For cash sales made to Natarajan)
	Total c/f		4,99,300	4,99,300

Date	Particulars	L.F.	Debit (Rs.)	Credit (Rs.)
2012 Mar. 7	Stationery Account Dr.		1,050
	To Cash Account			1,050
	(For purchase of stationery for cash)

Mar. 7	Purchases Account Dr.		26,000
	To Salil			26,000
	(For credit purchases of goods from Salil)
Mar. 7	Mukherjee Dr.		8,080
	To Sales Account			8,080
	(For credit sales of goods to Mukherjee)
Mar. 9	Rent Paid in Advance A/c Dr.		24,000
	To Cash Account 24,000			24,000
	(For rent paid in advance)
Mar. 9	Drawings Account Dr.		4,500
	To Cash Account			4,000
	To Purchases Account			500
	(For drawings in cash and goods taken by the proprietor for personal use)

Mar.9	Cash Dr.		25,000
	To Bank Account			25,000
	(For cash withdrawn from Bank)
Mar. 10	Mathur Dr.		9,850
	To Sales Account			9,850
	(For sales to Mathur on credit)
Mar.11	Purchases Account Dr.		2,900
	To Bank			2,900
	(For purchases of goods, payment being made by means of a cheque)

Mar.14	Cash Account Dr.		10,000
	To Patil			10,000
	(For cash received from Patil)
Mar.14	Salil Dr.		26,000
	To Cash Account			24,700
	To Discount Account			1,300
	(For cash paid to Salil and discount received from him)
Mar.17	Cash A/c Dr.		9,750
	Discount Account Dr.		100
	To Mathur			9,850
	(For cash received from Mathur and discount allowed to him)
	Cash Account Dr.		4,040
Mar.18	Bad Debts Account Dr.		4,040
	To Mukherjee			8,080
	(For cash received from Mukherjee on his insolvency and amount written off as bad debt)
	Total c/f		6,54,610	6,54,610

Date	Particulars	L.F.	Debit (Rs.)	Credit (Rs.)
2012	Total b/f		6,54,610	6,54,610
Mar. 18	Scooter Account Dr.		30,000
	To Cash Account			30,000
	(For purchase of a scooter for cash)
” 20	Aggarwal Dr.		8,640
	Nayak Dr.		3,780
	To Sales Account			12,420
	(For credit sales made to Aggarwal and Nayak)
” 24	Cartage Account Dr.		150
	To Cash Account			150
	(Cartage paid)
” 24	Repairs Account Dr.		170
	To Repairs Outstanding A/c			170
	(For repairs charges)
” 26	Petrol Expense Account Dr.		550
	To Cash Account			550
	(For petrol expenses paid in cash)
” 26	Purchases Account Dr.		12,000
	To Cash Account			12,000
	(For cash purchases)
” 26	Office Equipment Account Dr.		12,100
	To Cash Account			12,100
	(For purchase of office equipment)
” 27	Repairs Outstanding A/c Dr.		170
	To Cash Account			170
	(Repairs outstanding paid)
” 28	Sales Returns Account Dr.		400
	To Aggarwal			400
	(Sales returns from Aggarwal)
” 31	Depreciation Account Dr.		100
	To Furniture Account			100
	(For depreciation on furniture)
” 31	Depreciation Account Dr.		200
	To Scooter			200
	(For depreciation on scooter)
” 31	*Salary Account Dr.		1,800
	To Salary Outstanding A/c			1,800
	(For salary outstanding)
” 31	*Rent Account Dr.		1,000
	To Rent Outstanding A/c			1,000
	(For rent outstanding)
	Total c/f		7,25,670	7,25,670

Date	Particulars	L.F.	Debit (Rs.)	Credit (Rs.)
2012	Total b/f		7,25,670	7,25,670

Mar., 31	Bank Charges Account Dr.		50
	To Bank			50
	(For bank charges)
” 31	Interest on Capital Dr.		1,250
	Salary to Proprietor Dr.		2,000
	To Capital Account			3,250
	(For interest on capital, Rs. 1250 and salary for the proprietor credited with Rs. 2,000)
”	Cash Account Dr.		700
	To Purchase Returns A/c			700
	(For cash received from Salil on return of some defective goods sold to him)
			_______	_______
	Total		7,29,670	7,29,670

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