1. Personal Account -Personal account is an account of a person.

For the purpose of

accounting a person is divided into three categories viz., natural person for e.g. Mr. Aditya,
Mr. Vijay, Mrs.Reena etc., artificial person like partnership firms, companies or business
organization for e.g. Reliance Industries Ltd., Cipla Ltd., Bank of India, etc. and
representative personal account for e.g. debtors account, creditors account. Capital account,
outstanding exp, prepaid expense

2.. Real account. These are the accounts of properties and assets of the business. A separate
account is prepared for each asset or property. These assets are of two types namely, tangible
and intangible. Tangible assets are those assets which can be seen, touched, measured etc.
fore.g. stock, machinery, furniture, building, goods etc. Intangible assets are those assets
which can not be seen or touched but can be measured in terms of money and recorded in the
books of accounts for e.g. goodwill, copy rights, trade marks, brand name, etc.

3. Nominal account: These are the accounts of expenses, losses, gains and incomes for e.g.
interest account, discount account, commission account, salary account, wages account etc.

Illustration 1
Classify the following accounts into personal, real and nominal.
Goods A/C, Salary A/C, State Bank of India A/C, Printing and Stationery A/C, Discount
Received A/C, Capital A/C, Vinay's A/C, Carriage inward A/C, Stock A/C, Investment A/C,
Loss goods by fire A/C, Tools A/C, Yashodhan Library A/C, Repairs to Machinery A/C,
Manager Salary A/C, Copyright A/C, Patents A/C, Live Stock A/C, Sales Tax A/C, Audit
fees. A/C, Bad debts A/C, Premises A/C, Leasehold Building A/C, Freehold Property A/C,
Shreenaths Textile A/C, Stock of stationery A/C, Insurance premiumA/C, Gas and light-
A/C, Debtors A/C, Creditors A/C, Trade expenses A/C, Royalty A/C, Goodwill A/C, Interest
A/C, Railway freight A/C, Profit sale of Machinery A/C, Loss on sale of Investment A/C.

Solutions :

Personal Accounts Real Accounts Nominal Accounts

State Bank of India A/C Goods A/C Salary A/C
Capital A/C Stock A/C Printing and stationery A/C
Vinay A/C Investment A/C Discount A/C
Outstanding Expenses A/C Tools A/C Carriage Inward A/C
Prepaid Insurance A/C Copyright A/C Loss goods by fire A/C
Loan A/C Patent A/C Repairs to machinery A/C
"Yashodhan library A/C Live stock A/C Manager's Salary A/C
Shreenath Textile A/C Premises A/C Sales Tax A/C
Debtors A/C Leasehold building A/C Audit fees A/C
Creditors A/C Freehold building A/C Bad debts A/C
Stock of stationery A/C Insurance A/C
Goodwill A/C Gas and light A/C
Trade expenses A/C
Royalty A/C

1
 Interest A/C
Railway freight A/C
Profit on sale of Machinery
Loss on sale of investment

GOLDEN RULES OF ACCOUNTING

Personal Account
DEBIT THE RECEIVER
CREDIT THE GIVER

Real Account
DEBIT WHAT COMES IN
CREDIT WHAT GOES OUT
Nominal Account
DEBIT ALL EXPENSES AND LOSSES
CREDIT ALL GAINS AND INCOMES

CLASSIFICATION OF GOODS ACCOUNT

Goods is the commodity in which a trader or businessman is dealing. Groceries will be
considered as goods for grocery merchant whereas furniture will be considered as goods
for furniture merchant. Goods account is a real account as the stock of goods is a
current asset. Though the goods is a single account, but for the purpose of recording
into the journal the goods is subdivided into five subparts as per the transaction effect.
These subparts are purchase account, sales account, purchase return account, sales return
account and stock account.
Goods- 1.Purchases
2. Sales
3.Purchase Return
4.Sales Return
5.Stock
Because of such classification of the goods account, whenever the goods is purchased
purchases account is debited instead of good account, goods sold then sales account is
credited instead of goods account, for goods returned to suppliers purchase return
account is credited instead of goods account and for goods returned by customer a sales
return account is debited instead of goods account, finally goods lying unsold with the
business is termed as Stock

Illustration

2
 Journalize the following transactions in the books of Mr. Prathamesh. January 2010

1st Started business with cash of Rs. 10000

2nd Bought furniture for Rs. 20000 in cash

3rdBought goods for Rs. 25000 in cash

10th Sold .goods for Rs. 30000 in cash

15 th Paid Salary to staff Rs. 5000 in cash

20th Paid rent Rs. 2000 in cash

25th Bought goods for Rs. 10000 on credit from shyam

30th Sold goods for Rs. 10000 on credit to Sunil

Illustration 2:
On January 1, 2008 Mr. Mahadev started business in the name of M/s. Mahadev &. Sons by bringing in
cash of Rs. 50,000 of which Rs. 15,000 deposited in the Canara Bank.

During the month of January 2008 the following transactions took place -

January 3. ..........A loan of Rs. 50,000 taken from the Canara Bank.

January 5............Some materials worth Rs. 10,000 purchased from Mr. Sohanlal on credit
January 7. ..........Furniture worth Rs. 17,500 and machinery worth Rs. 30,000 purchased in cash

January 9………… Rs. 1,000 paid towards telephone charges by cheque.

January 10..........Some office equipments bought for Rs. 4,500 from M/s. Tiger & Sons on credit.
January 12..........Goods worth Rs. 26,500 sold in cash
January 15..........Goods worth Rs. 4,000 sold to Mr. Shiva on credit

3
 January 16..........50 shares of Tata Steel Ltd. @ Rs. 280 per share purchased in cheque
January 18. ........Mr. Shiva returned goods worth Rs. 100 being defective.
January 20..........Rs. 3,750 received from Mr. Shiva after allowing him Rs. 150 as discount.

January 21……….. Goods worth Rs. 5,500 purchased on credit from Mr. Shyam and sold to
Ravi Traders for Rs. 6,200 on credit

January 22…….....Rs. 201 given as donation in cash

January 25. …….Rs. 5,300 paid as salaries to the staff members in cash

January 28………Rs. 2,100 received from a salesman in cash for the goods sold after
deducting his travelling expenses of Rs. 175.

You are required to pass the journal entries in the journal of M/s. Mahadev & &. Sons
Illustration 3

The following transactions took place in the business of M/s. Nanavati & Co. during April 2009. You
are required to journalise them
April 1 ……………Mr. Nanavati started business with Rs. 1,00,000 cash and a machine of Rs
25,000. Out of Rs. 1,00,000 Rs. 50,000 deposited in the State Bank of India.
April 2 …………….. Goods worth Rs. 3,300 purchased from Mr. Chimanlal. Cash paid to
him Rs. 1,000.

April 4 ..................Stationery worth Rs. 250 purchased on cash.

April 5 .................Goods sold to Padma Traders for Rs. 1,500 on credit

April 10...............Goods purchased from Mr. Soneji for Rs. 1,500 on credit
April 11 ..............Half of the goods purchased from Soneji sold to Mr. Kanji on credit on a
profit of Rs. 125 .

April 12................Rs. 2,150 paid to Mr. Chimanlal in full and final settlement of Rs. 2,300.

April 18................Mr. Nanavati brought in additional capital of Rs. 25,000 in cash.

April 20………………Goods worth Rs. 3,000 sold to Mr. Raman at 10% trade and 5% cash
discount. Mr. Raman paid cash immediately.

April 22……………….Mr. Kanji is declared insolvent and only 50 paise in a rupee could
be recovered from him.

4
Illustration 4
Journalise the following transactions in the books of M/s. Rekha Traders
2009
November 1……..Started business with
Cash Rs. 5,00,000/-
Land Rs. 6,00,000/-

Machinery Rs. 1,50,000/-

Bank Rs 20,000/-

November2………. Paid rent to the landlord Rs. 1,450/- by cheque

November4............Sold goods to Dinar for Rs. 6,430/- on credit

November7............Purchased a building from Narendra for Rs. 2,00,000/-. Rs. 50,000 paid
immediately. The balance is payable in three equal annual installments.
November9............Withdrew cash of Rs. 500/- for personal use.

November 11 ........Dinar returned goods worth Rs. 480/-

November 15 ........Purchased furniture on credit from Randhir for Rs. 3,900/.

November20..........Received Rs. 5,900/- from Dinar and allowed him a cash discount of Rs.
50/-

November 22 ........Rs. 3,800/- paid to Randhir in full settlement of Rs. 3,900/-

November25 .......Rs. 500/- received as commission in cash

November 27. .......Rs. 3000/- incurred on advertising in cash

November 28. .......Fire insurance premium of Rs. 1,200/- paid in cheque

November30…….. Goods sold on cash to rohan on Rs 5,000, 10 % Trade discount, 5 %

cash discount

HOME WORK SECTION

Analyse and then journalise the following transactions in the books of Mr. B.
2009
Jan. 1 1. Started business with a capital of Rs. 7,500.
Jan. 1 2. Purchased goods from Mr. Z for Rs. 2,000 on credit
Jan. 1 3. Loan taken from W Rs. 300.
Jan. 1 4. Goods sold to Mr. L for cash Rs. 2,500.
Jan. 5 5. Cash paid to Mr. Z Rs. 2,000.
Jan. 5 6. Purchased Furniture for office Rs. 700.

5
Jan. 5 7. Paid Office Rent out of personal cash of B Rs. 400.
Solution
JOURNAL OF B
Date No. Particulars LF Dr. Cr.
2010 Amount. Amount
Jan. 1 1. Cash A/c Dr. 7,500
To B’s Capital A/c 7,500
[Being cash brought in by B to start business]
2. Purchase A/c Dr. 2,000
To Z’s A/c 2,000
[Being goods purchased from Z on credit]
3. Cash A/c Dr. 300
To W’s A/c 300
[Being Loan received from W]
4. Cash A/c Dr. 2,500
To Sales A/c 2,500
[Being goods sold to L for cash]
Jan.5 5. Z’s A/c Dr. 2,000
To Cash A/c 2,000
[Being cash paid to Z for previous credit
purchases]
6. Furniture A/c Dr. 700
The Cash A/c 700
[Being furniture purchased for cash]
7. Rent A/c Dr. 400
To capital a/c 400
(Being rent paid out of personal expenditure)
Total Rs. 15,400 15,400

Illustration 2 From the following particulars, prepare the journal of A.

2005 Rs.
Dec 1 Started business with cash 3,000
3 Purchased goods for cash 400
5 Advertisement expenses paid 250
7 Sold goods for cash 575
11 Further capital introduced 1,000
14 Paid to B, a creditor 900
17 Received commission from Cin cash 600
19 Paid to D on account 175
22 Received from E, a debtor 2,000
29 Salary paid in cash 1,000
Solution:
Journal of A
Date No. Particulars LF Debit Credit
Amount. Amount
2005

6
 Jan. 1 1. Cash A/c Dr. 3,000
To Capital A/c 3,000
[For cash introduced as capital]
3 2. Purchase A/c Dr. 400
To Cash A/c 400
[For cash purchases]
5 3. Advertisement A/c Dr. 250
To Cash A/c 250
[For advertisement expenses paid]
7 4. Cash A/c Dr. 575
To Sales A/c 575
[For cash sales]
11 5. Cash A/c Dr. 1,000
To Capital A/c 1,000
[For additional capital]

14 6. B’s A/c Dr. 900

To Cash A/c 900
[For paid against purchases]
17 7. Cash A/c Dr. 600
To Commission A/c 600
[For commission from C]
19 8. D’s A/c Dr. 175
To Cash A/c 175
[For cash paid on account]
12 9. Cash A/c Dr. 2,000
To E’s A/c 2,000
[For receipt from E]
10 10. Salary A/c Dr. 1,000
To Cash A/c 1,000
[For salaries paid]
Total Rs. 9,900 9,900

Illustration 3:
Journalise the following transactions:
2005
Jan. 1. B started business with cash worth Rs. 10,000,
2. Purchased goods for Rs. 15,000 in cash
Purchased goods from M for Rs. 3,0O0 on credit
3. Sold goods to Y for Rs. 4,000 on credit
Sold goods for Rs. 5,000 in cash
4. Y returned goods worth Rs. 1,000.
Returned goods to M worth Rs. 2,000.
5. B took away goods worth Rs. l,000 for personal purpose
Goods worth Rs. 2,000 were destroyed in fire.
Distributed goods worth Rs. 500 as free samples.

7
Solution:
Journal
Date No. Particulars LF Debit Credit
Amount. Amount
2005
Jan. 1 1. Cash A/c Dr. 10,000
To B’s Capital A/c 10,000
[For goods brought in by B]
2 2. Purchase A/c Dr. 15,000
To Cash A/c 15,000
[For cash purchases; see Note(1)]
2 3. Purchase A/c Dr. 3,000
To M’s A/c 3,000
[For credit purchase from M]
3 4. Y’s A/c Dr. 4,000
To Sales A/c 4,000
[For credit sale to Y]
3 5. Cash A/c Dr. 5,000
To Sales A/c 5,000
[For goods returned by Y]
4 6. Sales return A/c Dr. 1,000
To Y’s A/c 1,000
[For goods returned by Y]
4 7. M’s A/c Dr. 2,000
To Purchase return A/c 2,000
[For goods returned to M]
5 8. Drawings A/c Dr. 1,000
To Goods Taken By B A/c 1,000
[For goods taken by B]
5 9. Loss of Fire A/c Dr. 2,000
To Goods Lost by Fire A/c 2,000
[For goods lost by fire ]
5 10. Advertisement A/c Dr. 500
To Goods Given as Samples A/c 500
[For goods given as samples]
Total Rs. 43,500 43,500

Illustration 4:
Give Journal entries for the following transactions:
1. B started business by bringing in cash Rs. 3,000, goods worth Rs. 4,000 and vehicle
worth Rs. 5,000.
2. B purchased goods worth Rs. 8,000 from X and paid him Rs. 2,000.
3. B sold goods worth Rs. 3,000 to A who paid him , immediately.
4. B took goods worth Rs. 1,000 and cash Rs. 2,500 for his own use.
Solution:
Journal of B

8
 Date No. Particulars LF Debit Credit
Amount. Amount
1 1. Cash A/c Dr. 3,000
Purchase A/c Dr. 4,000
Vehicle A/c Dr. 5,000
To B’s Capital A/c 12,000
[For items brought in by B to start business]
2 2. Purchase A/c Dr. 8,000
To Cash A/c 2,000
To X’s A/c 6,000
[For purchases from X partly on cash,
partly on credit]
2 3. Cash A/c Dr. 1.000
A’s A/c Dr. 2,000
To Sales A/c 3,000
[For sales to A partly on cash and
partly on credit]
3 4. B’s Drawings A/c Dr. 3,500
To Goods Taken by BA/c 1,000
To Cash A/c 2,500
[ goods and cash taken by B]
Total Rs. 26,500 26,500

Illustration 5:
Journalise the following transactions in the books of both A and B.
2004
Jan. 1 Goods sold by A to B on Credit Rs. 3,000.
2 Goods returned by B to A Rs. 500.
15 Cash paid by B Rs. 2,500 to A.
20 Loan taken by A from B Rs. 10,000.
21 Furniture purchased by A from B worth Rs. 2,000 on credit
Solution:
Journal of A
Date No. Particulars LF Debit Credit
Amount. Amount
Jan. 1 1. B’s A/c Dr. 3,000
To Sales 3,000
[Being goods sold to B on credit]
2 2. Sales Returns A/c Dr. 500
To B’s A/c 500
[Being goods returned by B out of
Jan. 1 transaction]
15 3. Cash A/c Dr. 2,500
To B’s A/c 2,500
[Being cash received from B against
credit sales]

9
 20 4. Cash A/c Dr. 10,000
To B’s Loan A/c 10,000
[Being loan taken from B]
22 5. Furniture A/c Dr. 2,000
To B’s A/c 2,000
[Being furniture purchased from B on credit]
Total Rs. 18,000 18,000

Journal of B
Date No. Particulars LF Debit Credit
Amount. Amount
Jan. 1 1. Purchase A/c Dr. 3,000
To A’s A/c 3,000
[Being goods purchased from A on credit]
2 2. A’s A/c Dr. 500
To Purchase Returns A/c 500
[Being goods purchased on Jan. 1,
returned to A]
15 3. A’s A/c Dr. 2,500
To Cash A/c 2,500
[Being cash paid to A against credit
purchases]
20 4. Loan to A A/c Dr. 10,000
To Cash A/c 10,000
[Being loan given to A]
22 5. A’s A/c Dr. 2,000
To Furniture A/c 2,000
[Being furniture sold to A on credit]
Total Rs. 18,000 18,000

Illustration 7:
1. B sold goods having a list price of Rs. 1,000 at 20% trade discount to Y on January 1,
2004. B allows cash discount of 10% if payment is received within 10 days. B receives
cash from Y on January 8, 2004.
2. B purchased goods having list price of Rs. 800 at 25% trade discount from X on
January 10, 2004. X allows 5% cash discount, if payment is made within 20 days. B pays
the amount due on 25th January, 2004.
3. On January 30, 2004 B sold goods having a list price of Rs. 4,000 at a trade discount
of 20% and received the amount due immediately in cash subject to cash discount of
10%.
4. On January 30, 2004 B purchased goods having a list price of Rs. 9,000 at a trade
discount of 30% and paid the amount due immediately in cash subject to cash discount of
10%.
5. On 30th January, 2004 B sold goods having a list price of Rs. 2,000 at 20% trade
discount to M and received half the amount due in cash immediately after allowing 10%
cash discount.

10
 6. On 31st January, 2004 B purchased goods having a list price of Rs. 4,000 at 25%
trade discount from C and paid 1/3rd amount in cash subject to 10% cash discount.
Pass necessary Journal Entries to record the above transactions.
Solution:
Journal of B
Date No. Particulars LF Debit Credit
Amount. Amount
Jan. 1 1. Y’s A/c Dr. 800
To Sales 800
[For goods sold to Y: Rs. 1,000 less
20% trade discount]
8 2. Cash A/c Dr. 720
Discount Allowed A/c Dr. 80
To Y’s A/c 800
[For cash received from Y : Rs. 800 -
10% cash discount]
10 3. Purchase A/c Dr. 600
To X’s A/c 600
[For goods bought from X Rs. 800 -
25% trade discount]
25 4. X’s A/c Dr. 600
To Cash A/c 570
To Discount Received A/c 30
[For cash paid to X: Rs. 600 - 5%
cash discount]
30 5. Cash A/c Dr. 2880
Discount Allowed A/c 320
To Sales A/c 3,200
[For goods sold for Rs. 4,000 less 20%
trade discount and cash received Rs. 3,200
less 10% cash discount]
30 6. Purchase A/c Dr. 6,300
To Cash A/c 5,670
To Discount Allowed A/c 630
[For goods bought Rs. 9,000 less 30%
trade discount and cash paid Rs. 6,300
less 10% cash discount]
30 7. M’s A/c Dr. 1,600
To Sales A/c 1,600
[For goods sold to M; Rs. 2,000 - 20%
trade discount]
30 8. Cash A/c Dr. 720
Discount Allowed A/c Dr. 80
To M’s A/c 800
[1/2 Amount paid by M Rs. 800 - 10%
cash discount]

11
 5 9. Purchase A/c Dr. 3,000
To C’s A/c 3,000
[For goods purchased from C Rs. 4,000-
25% trade discount]
5 10. C’s A/c Dr. 1,000
To Cash A/c 900
To Discount Received A/c 100
[1/3 Amount paid to C: Rs. 1,000- 10%
cash discount
Total Rs. 18,700 18,700

Illustration 8: (Purchase & Purchase Returns with Trade Discounts)

Prepare Arohi’s Journal from the following details for January, 2005:
Jan. 1 Purchased goods of Rs. 50,000 from Suman.
2 Returned goods of Rs. 1,000 to Suman.
5 Purchased goods of Rs. 50,000 from Vimal @ 10% trade discount.
7 Returned goods having list price of Rs. 1,000 to Vimal.
16 Purchased goods of Rs. 1,00,000 from Naren on credit @ 10% trade discount.
26 Returned goods having list price of Rs. 10,000 to Naren.
31 Purchased goods for Rs. 12,000 @ 5% trade discount from Rakesh.

Illustration 9 (Sales and Sales Returns with Trade Discounts):

Prepare Sonia’s Journal from the following details for January, 2005:
Jan. 1 Sold goods of Rs. 5,000 to Monica.
2 Monica returned goods of Rs. 1,000.
5 Sold goods of Rs. 5,000 to Radhika @ 10% traae discount.
7 Radhika returned goods having list price of Rs. 1,000.
16 Sold goods of Rs. 10,000 to Namita on credit @ 10% trade discount.
26 Namita returned half the goods.
31 Sold goods for Rs. 12,000 @ 5% trade discount to Ruchita.

Illustration 10 (Cash and Cash Discount):

Enter the following transactions in Journal of A.
Dec. 1 Cash introduced in business Rs. 10,000.
3 Purchased goods for cash Rs. 2,700.
5 Received Rs. 2,500 from C and allowed discount of I 500.
7 Paid to B Rs. 450 and received a discount of Rs. 50.
11 Paid, wages to workers Rs. 4,300.
16 Paid for office rent Rs. 600
19 Received from A Rs. 1,800 after allowing him a discount of Rs. 200.
23 Received interest Rs. 150.
27 Received Rs. 2,400 from C for the balance due, the amount payable is Rs
3,000
Solution:
Journal of A
Date No. Particulars LF Debit Credit

12
 Amount. Amount
2005
Dec. 1 1. Cash A/c Dr. 10,000
To Capital A/c 10,000
[For cash introduced as capital]
3 2. Purchases A/c Dr. 2,700
To Cash A/c 2,700
[For cash purchases)
5 3. Cash A/c Dr. 2,500
Discount Allowed A/c Dr. 500
To C’s A/c 3000
[For cash received and discount allowed]
7 4. B’s A/c Dr. 500
To Cash A/c 450
To Discount Received A/c 50
[For cash paid and discount received]
11 5. Wages A/c Dr. 4,300
To Cash A/c 4,300
[For wages paid)
16 6. Office Rent A/c Dr. 600
To Cash A/c 600
[For office rent paid]
19 7. Cash A/c Dr. 1,800
Discount Allowed A/c Dr. 200
To A’s A/c 2,000
[ cash received and discount allowed)
23 8. Cash A/c Dr. 150
To Interest A/c 150
[For receipt of interest)
27 9. Cash A/c Dr. 2,400
Discount Allowed A/c Dr. 600
To C A/c 3,000
[For cash received and discount allowed]
Total Rs. 26,250 26,250

Illustration 11:
Record the following transactions in the books of D:
2004
Jan.1. Purchased machinery from B for Rs. 50,000. Expenses on transportation were
Rs. 2,000. Installation charges came to Rs. 3,000.
Jan. 2 Purchased an office building for Rs. 75,000.
Feb. 20 Paid Rs. 3,000 for repairs on machinery and Rs. 4,000 on electricity, to run
the machinery. Paid Insurance premium for office building Rs. 7,500.
Oct. 10 Sold office building to M for Rs. 90,000 on credit
Oct. 20 Sold machinery for Rs. 45,000 on cash
Solution:

13
Journal of D
Date No. Particulars LF Debit Credit
Amount. Amount
Jan. 1 1. Machinery A/c Dr. 55,000
To B’s A/c 55,000
[For machinery purchased and expenses on
transportation and installation )

2 3. Office Building A/c Dr. 75,000

To Cash A/c 75,000
[For office building purchased vide agreement
dated ….]
Feb. 20 4. Machinery Repairs A/c Dr. 3,000
Electricity A/c Dr. 4,000
Building Insurance A/c Dr. 7.500
To Cash A/c 14,500
[For various expenses paid]
Oct. 10 5. M’s A/c Dr. 90,000
To Office Building A/c 75,000
To Profit on Sale of Fixed Asset A/c 15.000
[For sale of office building to M at profit:
90,000 - 75,000]
20 6. Cash A/c Dr. 45,000
Loss on Sale of Fixed Asset A/c Dr. 10,000
To Machinery A/c 55,000
[For sale of machinery at loss:
50,000 + 5,000 - 45,000]
Total Rs. 2,89,500 2,89,500

Illustration 12:
Record the following transactions in the books of C:
2004
Jan. 1 Purchased 100 Shares of BBC Limited having face value of Rs. 10 at Rs. 20
each. Paid brokerage at 1% of purchase price.
Oct. 10 BBC Limited declared and paid dividend at the rate of 15%.
Oct. 20 Sold the shares of BBC Limited at Rs. 25 each.
Solution:
Journal of C
Date No. Particulars LF Debit Credit
Amount. Amount
Jan. 1 1. Investment in Shares A/c Dr. 2,020
To Cash A/c 2,020
[For purchase of 100 shares of BBC Ltd.
at Rs. 20 each: 100 × 20 and paid the
brokerage of 1%)

14
Oct. 10 3. Cash A/c Dr. 150
To Dividend A/c 150
[Dividend received on shares : at 15% of
Rs. 1,000]
20 4. Cash A/c Dr. 2,500
To Investment in Shares A/c 2,020
To Profit on Sale of Investment A/c 480
[For profit on sale of shares in BBC Ltd.]
Total Rs. 4,670 4,670

===================================

15