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Aarambh 2.0 (2024)

Accounting Equation DPP- 05

1. Show an Accounting Equation for the following transactions:

(i) D. Mahapatra commenced business with cash of Rs 50,000 and Rs 1,00,000 by cheque; goods Rs 60,000;
machinery Rs 1,00,000 and furniture Rs 50,000.
(ii) 1/3rd of above goods sold at a profit of 10% on cost, and half of the payment is received in cash.
(iii) Depreciation on machinery provided @10%.
(iv) Cash withdrawn for personal use Rs 10,000.
(v) Interest on drawings charged @ 5%.
(vi) Goods Sold to Gupta for Rs 10,000 and received a Bill Receivable for the same amount for 3 months.
(vii) Received Rs 10,000 from Gupta against the Bill Receivable on its maturity.

2. Prepare Accounting Equation from the following:

(a) Started business with cash Rs 1,00,000.
(b) Purchase goods for cash Rs 20,000 and on credit Rs 30,000.
(c) Sold goods for cash costing Rs 10,000 and on credit costing Rs15,000 both at a profit of 20%.
(d) Paid salaries Rs 8,000.
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Answer Key
1. (H&S)
2. (H&S)
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Hints & Solutions

1. (H&S)
The following table is showing the accounting equation.

S.No Transactions Assets = =

Liabilities
+Capital
Cash + Bank + Stock + Machinery + Furniture + Debtors + Bills = Capital
Receivables Rs.
(i) Business started 50,000 1,00,000 60,000 1,00,000 50,000 3,60,000
with cash Bank,
Stock, machinery
and furniture
50,000 1,00,000 60,000 1,00,000 50,000 = 3,60,000
(ii) One third of
goods sold at a 11,000 (20,000) 11,000 = 2,000
gain of 10% on
cost and half
amount was
received in cash
61,000 1,00,000 40,000 1,00,000 50,000 11,000 = 3,62,000
(iii) Value of 61,000 1,00,000 40,000 (10,000) (10,000)
Machinery
Depreciation
@10%
61,000 1,00,000 40,000 90,000 50,000 11,000 = 3,42,000
(iv) Drawings (10,000) = (10,000)
51,000 1,00,000 40,000 90,000 50,000 11,000 = 3,42,000
(v) Interest on = (500)
drawings charges +500
@5%
51,000 1,00,000 40,000 90,000 50,000 11,000 = 3,42,000
(vi) Sold goods to Mr. (10,000) 10,000
Gupta for Rs.
10,000 and
receive a Bill
Receivable for the
same amount
51,000 1,00,000 30,000 90,000 50,000 11,000 10,000 = 3,42,000
(vii) Amount Received 10,000 (10,000)
from Mr. Gupta
Rs. 10000 against
the bill
Receivables on its
maturity
Total 61,000 + 1,00,000 30,000 + 90,000 + 50,000 + 11,000 + NIL = 3,42,000
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2. (H&S)
The following table is showing the accounting equation.

S.No Transactions Assets = Liabilities + Capital

Cash + Stock + Debtors Creditors Rs.
(i) Business Started with cash 1,00,000 1,00,000
amounted Rs.
1,00,000 1,00,000
(ii) Goods purchased for csh Rs. (20,000) + 50,000 = 30,000
20,000 and on credit Rs.
30,000
80,000 50,000 = 30,000 1,00,000
(iii) Goods Sold for cash worth 12,000 (25,000) + 18,000 5,000
Rs. 10,000 and on credit
worth Rs. 15,000 with the
profit of 20%
92,000 25,000 18,000 = 30,000 1,05,000
(iv) Salaries Paid to employs (8,000) (8,000)
84,000 + 25,000 + 18,000 = 30,000 + 97,000
127000 = 127000

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