Example #1 Mr. John Wick wants to start a new clothing business. He has a total sum of $100,000 in his savings that can be invested. He owns a small shop at a primary location that can be used to start a retail clothing outlet

Example #1
Mr. John Wick wants to start a new clothing business. He has a total sum of $100,000 in his savings that can be invested. He owns a small shop at a primary location that can be used to start a retail clothing outlet. For the store, he purchased furniture, including shelves, a counter desk, and other equipment for $15,000. He also hires a staff of two for customer support and other office work for $5,000 each.
Mr. Wick decided to start with men’s clothing and purchased a complete range of men clothes from the wholesale market, which costs him around $75,000. The initial purchase got sold in a period of not more than one month for a total of $95000.
Mr. Wick wants to journalize these transactions and create ledger accounts for the month of April 2019.

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  Journal Entries
  

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  Ledger Accounts Example
  

Example #2
David Baker wants to start a forging factory, where he can manufacture high-quality chef and military knives. On January 1, 2018, he invested a sum of $1,000,000 as capital and started The Damascus Forging Works. He took a bank loan of $750,000 at 5% PA and invested the remaining amount of $250,000 from his own savings. He opened a current account and deposited $800,000.
Afterward, he made the following transactions.

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  On Jan 2, he rented a factory in the nearby industrial area for $20,000 per month and deposited $100,000 in advance by cheque.
  
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  On Jan 4, Mr. Baker purchased the necessary machinery for $500,000, paid by cheque.
  

After setting up the factory, he started production from 5^thJan, and following transactions took place during the 1^st year:-

Since Mr. Baker maintained all the accounting records himself, he wants our help to create ledger accounts for the firm.
The ledger accounts:-









The kind of impacct that a debit or credit that a transaction makes on each ledger account depends on which of five Chart of Account categories the includes the account.