Q. N.

12 (Descriptive)
Accounting Equation
S.N. Transactions Assets Liabilities Owner’s Equity
a College started with cash +5,00,000 - +5,00,000
Opening accounting equation +5,00,000 - +5,00,000
b Furniture bought +200,000(Furnit.) - -
-200,000(cash)
New accounting equation +500,000 - +500,000
c Stationery purchased +10,000(stationery - -
)
-10,000(cash)
New accounting equation +500,000 - +500,000
d Collection of admission fees +120,000 - +120,000
New accounting equation +620,000 - +620,000
e Paid utility bill -20,000 - -20,000
New accounting equation +600,000 - +600,000
f Billed tuition fee to the student +50,000(A/R) - +50,000
New accounting equation +650,000 - +650,000
g Received tuition fee +40,000(cash) - -
-40,000(A/R)
New accounting equation +650,000 - +650,000
h Stationery expenses -8,000 - -8,000
closing accounting equation +642,000 +642,000
Working Note
(a) Cash and Capital (b) Cash and Furniture (c) Stationery(Assets) and Cash
(d) Cash and Admission fee (e) Cash and utility exp. (f) Tuition fee(income) and A/R
(g) Cash and A/R (h) Stationery exp(10,000-2,000=8,000) and stationery

Q.N. 1(Problem solving)

Accounting Equation
S.N. Transactions Assets Liabilities Owner’s Equity
a Commenced business +100,000 - +100,000
Opening accounting equation +100,000 - +100,000
b Purchase of equipment +40,000(equip.) - -
-40,000(cash)
New accounting equation +100,000 +100,000
c Provide service to customer +20,000 - +20,000
New accounting equation +120,000 +120,000
d Purchase office supplies -3000 - -3,000
New accounting equation +117,000 - +117,000
e Paid salaries and due salaries -6,000 +9,000 -15,000
New accounting equation +111,000 +9,000 +102,000
f Withdrew cash for private use -5,000 - -5,000
New accounting equation +106,000 +9,000 97,000
g Billed to customer +15,000(A/R) - +15,000
New accounting equation +121,000 +9,000 +112,000
h Paid rent exp. and advance rent +12,000(adv. rent) - -6,000
-18,000(cash)
New accounting equation +115,000 +9,000 +106,000
i Purchase laptop for personal use and - +40,000 -40,000
 paid through bank loan
Closing accounting equation +115,000 +49,000 +66,000
Working Note
(a) Cash and Capital (b) Equipment and Cash (c) Cash and Service revenue
(d) Cash and Office Supplies (e) Salary exp.(15,000), Cash(6,000) and Salary due
(f) Cash and Drawing, (g) A/R and Service revenue,
(h) Rent exp.(6,000,advance rent(12,000) and Cash(18,000),
(i)Drawing and Bank loan