Accounting Equation Question 1 ‘What will be effect ofthe following on the Accounting Equation? T__[ Started business with cash 345/000 Ti] Opened a Bank Account witha deposit of | €4.500 Tit__| Bought goods from M/s. Sun andCo.for__ | £41.200. Solution: SNe “Transactions — = Usbitiest —_Canital Gash + CDank+ ‘Stock = ~~ Creditors Capital z z z z z G_[Seerecbusinesswitheash | 45000 = 5000] 35000 = 5000] WW [Opened Bank Account 4500+ ~«A5O0 = itha deposit 0500 > 4500 * “#5000 Wit [Bought goods rom Mis 11200 = T1200 Sunand Co. 40500 + 4800+ —~«11200 = 71200+ 45,000] Question 2. ‘Show the Accounting Equation on the basis ofthe following transactions: z i ‘Gopinath started business with 25,000 i | Purchased goods from Shaym 10,000) Ti | Sold goods to Sohan costing €.600 1,500 Tv. | Gopinath withdrew from business 5,000 {Hint ;Opening Capital - Loss on Sale - Drawings = Capital at the end 25,000 - £200 (i.e, 1800 -21,500)-85,000 = £19,700] ‘Solution: [Ne ‘Transactions Assets = Lables + Capital Cah} ~~«Stock == ~«(Debtors =~ Creditors € t z z TW |Gopinsthstartea 7251000 = 725000 lousiness with 725000 = 251000] Ti) [Purchased goods trom 130000 70.000 [Siva 725000 + 10000, = 0000+ 25000] ()_[Sold goods te Sohan “1800 1500 = = 300] moo + eno = ~«aSOO = 70000 + 24700] (i) |Goninath withdraw trom 5000 = “$100 lousiness 20000 + 6200+ «4500 = 10000 + 19,700)Question 3. ‘Show the effect ofthe ‘allowing transactions on the Accounting Equations: i ‘Started business with cash $50,000 i [ Salaries paid 2,000. Tit [ Wages outstanding 200 i [Interest due but not paid 400 | Rent paidinadvance #150 ‘Solution: ‘SNe Transactions ‘Assets = Liabilities + Capital Gash + Advance =~ Outstanding Capital z Expenses Expenses z z z 1 [Startedbusiness witheash 50,000 = 50,000] 501000 = 50,009] Gi [Barespa 2000 = 2,000] (expenses) +8000 = 48.000] Ti) [Wages Outstanding = 200 200] 778000 = 200+ 47800) (i) _ interest due ut not paid : 100 300] (expenses) 48.000 = 300+ «47.700 [Rent pain advance “50+ 10 47950 + 150 300+ ~~~—~A7,700) Question 4What will be the effect ofthe following on the Accounting Equation? i. Harish started business with cash Rs.18,000 li, Purchased goods for cash 5,000 and on credit RS.2,000 fi, Sold goods for cash Rs.4,000 (costing Rs.2,400) Iv, Rent paid Rs.1,000 and rent outstanding Rs.200 (Delhi 1998) Solution: SNe] Transactions ‘Assets = abilities + Capital Cash + Stock = Creditors + Outstanding + Capital z g z Rent z z [Parish started business] 16000 = 78,000 lwtheash 78,000 = 78,000] Ti |Purcharedgsodrtor | 5000 + 7,000 = 7000, Icash%5.000andon lcresit 82.000 73000 + 7000-2000 + 18,000] Ui [Soid goods forcash 3000-2400 = 1.600] [4,000 costing 22.400, (Pret) 77000 + 4600-2000 + _ 19.600) TM) [Rentpsid®2000a | -1000 = 200 4.200) IRent Outstanding 2200) 16000 + 4600 = 2000 200+ 16400) Question 5 Prepare Accounting Equation trom the following: i, Started business with cash Rs.2,00,000 and Goods Rs.20,000, ii Sold goods worth Rs.10,000 for cash Rs.12,000. il Purchased furniture on credit for Rs.30,000. (Delhi 2011) ‘Solution:SNe Transactions mae Tabi aa Gan Sake Farure = Gadors + api z : ° : 2 7 [Sanedtsiness wih camh Too x00 > |21,00,000 and Goods £20,000 See iano _+ 76006 = 77000] To otgooas wort ta0000Torcm| 2000 -Toan0 5 za rer Ta000 5 722000 Tin [Pacha omtre on creator sae > 960656 fewcao Tia + omoor 20000 = ~—~—~s0000 + ~—«zea ‘Question 6.Prepare an Accounting Equation and Balance Sheet on the following basis: i. Ajeet started business with cash Rs.20,000 fi, He purchased furniture for Rs.2,000. ii, He paid rent of Rs.200. iv, He purchased goods on credit Rs.3,000. v. He sold goods (cost price Rs.2,000) for Rs.5,000 on cash. ‘Solution: SNe Transactions | Assets = Liabilities + Capital Cash Furniture > “Stock = Creditors + Capital z z z z z 1) [Aieetstarted business with cash 720000 - 720.000 20,000 20,000 = 76.000 Ti [Hepurchaved furiturefor®2000 [2.000 2000 = 76.000 2000 = 26000 (ii) [Hepaidcent of €200 “200 = “200 (Expenses) 77,800 2.000) - 19.800 Ti [He purchased goods on credit 3,000] 3000 = 3000 17.800 ooo + 3000 = ~—~3000~=«+~=«19.800 Te [He sald oods(cort price®(2000fer] 5.000 + 2000, = 3000 85,000 oneash, (Profit) 22.800 700+ «1000 =~—«5000 + «22,800 Balance Sheet abilities ‘Amgent ‘Assets Ament [cana ‘WaB00|Cash 722,800] Icreditors 3,000|Fureiture 2,000] Stock 1.000 725:800) 25,800‘Question 7-Prepare an Accounting Equation from the following: {, Started business with cash Rs.1,00,000. Purchased goods for cash Rs.20,000 and on credit Rs.30,000. li, Sold goods for cash costing Rs.10,000 and on credit costing Rs.15,000 both at a profit of 20%. (Delhi 2010) ‘Solution: [SNo Transactions ‘Assets = Liabilities + Capital Cash Stock Debtors = Creditors > Capital z z z « z _|Startedbusiness with cash®100000| _ 100,000 z 1001000] 700000 7 1000000] (W)_ [Purchased goods for cash€20000 "20.000 + 50000 = 30,000 lancion credit £30,000) 609000 + 50,000 = 30.000 + 1,00,000] Ui) [Sold goods for cash costing 10,000 | 12,000 10.000 - * 2.000] land on credit costing 15,000 both at| la orofit of 20% -15.000 18000 = . 3.000] 92000 + 25000 18000 = 30000 + _1,05,000] Question 8, Develop an Accounting Equation from the following transactions z | Mohan commenced business with cash 50000, TL_| Purchased goods for cash 30,000 Ti__| Purchased goods on credit 20,000, Iy._| Sold goods (costing €10,000) for 12000 'v._| Bought furniture on credit 2,000 Vi.__| Paid cash to creditor 15.000 vil_| Salary paid 1,000. ‘Solution:[SNe Transactions ‘Assets 5 bilities + Capital Cah + ‘Stock ~~~ “Furniture =~ Creditors > Capital z z z z 1) [Mohan commenced business with 30.000 > $50,000 leash 50,000 : "500000 (_ [Purchased goods for cash =30000 + 90000 = 20000 + 30000 = 500000) Purchased goods oncreait 20,000 = 20,000 20000 + $0,000 = 20000 + 50000] (iw) _[Soid goods costing 110.000 for 7000+ 10,000 = 2,000] fe12,000, Prof 32000 > 40000 = 20000 + $2000] (O1_[Boushtforniture on creat 72000 = 72,000, 32000 + ~~ 40000 + ~~—2000 ~ 22000 + 52000) (wi) [Paid cashto realtor =15,000 = “15,000 T7000 + 4000+ ~—~2000 = 7000 + 52,000) [oo [Saervead 1000 = 1009] we000 + ~~ 40000 + 2000 - 7000 + 51,000) ‘Question 9. Prepare an Accounting Equation on the basis of the following transactions: i | Started business with cash $70,000, it___| Credit purchases of goods $18,000. ik | Payment made to creditors in fullsettiement 217,500, iv. | Purchase of machinery for cash £20,000. v.__[ Depreciation on machinery 2,000 ‘Solution: 'SNo Transactions Assets = abilities + Capital Cash + ‘Stock + Machinery = Creditors Capieal x z z z z [Started business with cash 70000 701009 '€70,000 70000 70005] (il_|Crect purchase of goods 78,000 = 18000 '818,000 70000 + 16,000 = 18000. + 70.000) (ii) [Payment made to creditor 17.500 =~ 18000 + 500 217.500 in ful settlement (Ciscount| Received) I 52500 + 18,000 = o* 70.500] Ww [Purchase of machinery for 20,000 720,000 ‘zh €20,000 32500 + 18000 + 20000 = Oo 703500) (W)_[Depreciation on machinery “2.000 2,000] le2.000 (Depreciation) 32500 + 18,000 + 718000 = o+ 68.509] ‘Question 10Prove that the Accounting Equation is satisfied in all the following transactions of Suresh. Also prepare a Balance sheet. Commenced business with cash Rs.60,000. Paid rent in advance Rs.500. ii. Purchased goods for cash Rs. 30,000 and credit Rs.20,000. iv. Sold goods for cash Rs.30,000 costing Rs.20,000. \v. Paid salary 500 and salary outstanding being Rs.100 vi. Bought motorcycle for personal use Rs.5,000.Solution: SNe Transactions ‘Assets = abilities + Capital Cash + Prepaid + Stock = Creditors + Salary + Capital z Rent z z Outstanding z z z (Commenced business with | 60.000 60.000} [-asn®60.000 ‘60000 = 600000) WH _[Paidrentin advance 8500 500+ $00 39500 + 500 = 601000} Gi) [Purchased goodsforcash | -30000 + $30,000 720000 [£30,000 and credt £20,000 29500 + 50 + 50000 = 20000 + 605005] (™) [Saidgoodsforeash30000 | 30000 + + 20,000 30,000] Jcostine 220.000 Prof] 39500 + 500 + 30000 = 2000+ + 70,009] (0) [Paidsalary®500 and salary 5000 = 5,000] outstanding being 100 (Orawings) 4000 + 500 + 30000 = 20,000+ 700+ ~— 64.400) Balance Sheet abilities ‘Amount ‘Assets “Amount = z [cacital (64;400|cash 34000] Icreaitors £20.000|Prepaid Rent 509 Salary Qutstandings| 100|Stock 30,000] 85,500] 185,500) Question 11.Show the effect of the following transactions on assets, liabilties and capital using the Accounting Equation. Also prepare a Balance sheet: i. Started business with cash Rs.60,000 ii, Rent received Rs.2,000 ii, Accrued interest Rs.500 iv. Commission received in advance Rs.1,000 v. Amount withdrawn Rs.5,000 [Hint : Capital = Opening Capital Rs.60,000 + Rent Received Rs,2,000 + Accrued Interest Rs.500 — Drawings Rs.5,00 Rs.57,500] Solution:No Transactions Assets > Uabltes + Capital Cah + Accrued ~~ ~—~« 5000 = 72000 [25.000 and credit 22.000 on-< 4700 300+ «7000 = 2.000 + 10,000] (w) [Sold goods for cash ®8.000 | 8.000 4000 74,009] costing 4.000 (Prof) 12700 300+ 3000 = 2,000 + 14,000] (W) Paidsalary®450 andsalary| 450 z 0] Joutstanding being 200 (Expenses) = 109] 100 (Expenses) 12.250 300+ «3000 = 2000+ 100+ 13.459] (Wi [Brought motoreycie for “31000 = ~3:000] lbersonal use £3,000 (Drawings 9250 300+ 3000 = 2000 + 100 10.459] last new equation balance: z {i/Raj commenced business 701000 i) Purchased goods on credit +14,000 (i) Withdrew for private use 4.700 (iv Goods purchased for cash 70,000 (Paid wages ‘300 (vi) Paid to creditors 76,000 (vil Sold goods on credit for 45,000 (vil) Sold goods for cash (Cost price 3000) 4,000 (in) Purchased furniture for ‘500 Solution: Question 13.Show the Accounting Equation on the basis of the following transactions and present a Balance sheet on the‘Question 14,Raghunath had the following transaction in an accounting year: |. Commenced business with cash Rs.50,000, i. Paid into bank Rs.10,000. |. Purchased goods for cash Rs.20,000 and credit Rs.30,000. iv, Sold goods for cash R.40,000 costing Rs.20,000. v. Rent paid Rs 500. Wi Rent outstanding Rs.100. vi. Bought furiture Rs.5,000 on credit. Bought refigerator for personal use Rs.5,000. ix, Purchased motorcycle for cash Rs.20,000. SNe Transactions = ___Ulabilities + Capital Cash + ‘Stock Debtors = Creditors Capital z z x z z 1)_[Ralcommenced business 701000 = 70000] 70,000 = 70,000] _ [Purchased goods on creat 14000 = __ 14000 7000+ 44000 = 44000 76,000] Ti)_ [Withdraw tor private use 7700 > 1700 6300+ 14000 = 14000 28,300] (6)_[ Goods purchased for cash yo000 + 10.000 38300 + 24000 =_14000 8.300 w) [Padwagee 300 = 300 36000 + 24000 = 14000 8000] Wi [Paidtecredtors 70.000 = 40000 48000 + 28000 = 4000 8000] (Wil [Botd goods on creat 15000 + 15000_= 48000 + 9000 + 15000-4000 28.000] (i [Sold goods foreash costing®3000)) 4000 "3000 ace 32000 + 6000 + 15000-4000 69.000] [Purchased urniture 500 500 31500 + 6000 + 500 45000 = 4000 697000) Balance Sheet {iabitties ‘Amount] Assets ‘Amount [Capitar 67.000)cash 51,509 |creditors +4.000|stock 6.000] Furniture 500] Debtors 15.000] 73000 73000] Create an Accounting Equation to show the effect of the above transactions on his assets, labiles and capital and also show his final Balance sheet. Solution:Question 15.Prepare an Accounting Equation from the following: ‘Started business with cash Rs.50,000 and goods Rs.30,000. li, Purchased goods for cash 30,000 and on credit from Karan Rs.20,000. iii, Goods costing Rs.40,000 were sold for Rs.55,000. iv, Withdraw cash for personal use Rs.10,000. v. Rent outstanding Rs.2,000. (MSE Chandigarh) Solution: ase abies + Capital Wotor ‘Outstanding Cash Bank Stock Furniture Cycle. Creditors Rent Capital SNo Transactions Ro + Re + Re + Re + Re Re + Re, Re ‘Commenced business with (_| Cash Rs50 000 50.000 0000 50,000 (| Patinte bank Rs-10.000 | 10.000 + 10000 40,000 + 10,000 $0,000) Purchased goods for 2000 ‘ash R520,000 and (| ered 520,000 20,000 + 30000 30,000 20,000 + 10.000 + 50,000 30,000 50,000 ‘Said goods for cash Rs.40,000 z 10,000 1) | costing Rs:30,000, 40,000 30,000, (Expenses 60,000 + 10.000 + 20000 30000 0,000 500) v)_| Rent paid R500 500 (Expenses) 59500 + 10.000 + 20.000 30,000 59,500, “109 (| Rent urstanding Re100 100 + (Drawings) 59500 + 10.000 + 20.000 = 90.000 + 100 59.400 Bough Fumiure on wy | credit R55 000 5.000 = 5.000 4500» 10,000 + 20.000 + 5,000 = 35000 + 100. ‘59,400 ‘Bought reagerator for 5,000 um) | personal use RES 000 5,000 : (Drawings) 4500 + 10.000 + 20000 + 5,000 = 35000 + 100 54500 Purchased matory Tor (a | cash 20,000 + 20.000 = 34500 + $0,000 + 20000 + 6.000 + 20,000 = 35.000 + 00 54.400 Balance Sheet abilities “Amount ‘Assets “Amount z z [copitat '54,400|Cash 345500] Creditors 35.000|Bank 10,009} lRent Outstanding 100|stock 20,000] Furniture 5.000} Motorcycle 20.000 189,500SNo Transactions ‘Assets bilities + Capital Cah + Stock Creditors + Outstanding + Capital z z g Rent g z (@) [Started business with cash%50.000| 50.000 + 30000 '80.000] land goods 230.000 50000 + 90,000 £80,000| (id [Purchased goods for cash 830.000, 30000 + 30000 land on credit from Kiran®20.000 20.000 20,000 20000 + 60,000 720.000 + 180,000] Gi) [Goods costing 40.000 were sold ‘55000 "40,000, 415,000] lor 855,000 roft) 75000 + 40,000 20000 + 95,000] (iv) Withdraw cash for personal use =10.000 =10,000| \g10,000 (Drawings) 65000 + 40.000 20,000 * 185,000] (W)_ [Rent outstanding®2,000 72,000 2.000 (Expenses) 65000 + 40,000 20,000 + 2,000 en) ‘Question 16.Show an Accounting Equation on the basis of the following transactions: i. D, Mahapatra commenced business with cash Rs.1,50,000; goods Rs.60,000; machinery Rs.1,00,000 and fumiture Rs.50,000. i. 181d of the above goods sold at a profit of 10% on cost and half of the payment is received in cash. li, Depreciation on machinery provided @10%. iv. Cash withdrawn for personal use 10,000. Vv. 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. vil, Received Rs.10,000 from Gupta against the Bills Receivable on its maturity. Hints: 1. Opening Capital Rs.3,60,000 = Cash Rs.1,50,000 + Stock Rss.60,000 + Machinery Rs.1,00,000 + Furniture Rs.50,000 2. Liabilities: Nil] Solution:assets = Capit eis ‘cass Stock Machinery Fumture + Dablors + Recetvables Capital so ‘Transactions Re. a Re Re fe Re Re ‘area business wi easy Rs Re50000 eum ‘Stock Rs 0.000 60.000 MacrneryRs10.000 +\00.000 coy_| Future R80 000 150000 60000 100000 __s0.000 0.000 “130.000+ 60.000+ 90000 + 50.000 = 360.000 Tot above poate coo prot of 10% on cost nd ha ott tecenedin cash 2000 w | tun) 11,000 0,000) 11.000 com 161000+ 4000+ 100000 30.000 11,000 = 362,000 ‘Deprecae meaner by 10% (10,000) wy | (ee00 000 10%), 10.000) Expense 161000 40000 90.000 60.000» 11.00 = 352.000 [cain windrawn torpersonaiwse | (10000) = 110.000 is1000+ 0000+ 0000+ _60.000+ 11.000 = 342.000 Treat on dawns Coed =o om Es +300 151000 49000 90000 50000 = 342000 ‘Goods sod to Gupta Ra 10 00 snavecened a bu Recenable or | te same amount 10.000) 10000 181000+ 0000+ 90000» 0000» 1100+ s0000 = 92 000 Recewed Re 10,000 rom Gupta ‘gant he Bil Recenable on ts ow _| monty (10.000) soo00e 0000+ 14,900 o = 342,000 Working Note 1: 60000 «1/3 = R:20,000% 110% = Rs:2,000 at ectved in Cash = 31,000 Question 17. ‘Show an Accounting Equation on the basis of the following transactions : z i. [Sunil started business with Cash 750,000 ii | He purchased a building and furniture for 1£00.000 ili | He purchased goods from Ramon credit ‘50,000 v._[ He pald cartage ‘500 ¥v.__| He sold to Shyam on credit goods costing ®6,000 for 3.000] solution: Vi_[ Received rent from tenants 3,000 ion: vii__| Received security deposit from tenants 3.500 vill.__| Purchased stationary for cash 100 ‘ix | Invested in shares (personal) 50,000 x.__| Received interest in cash 200 xi__| Introduced fresh capital 25,000 xik_| Goods destroyed by re 500Assots = Liabilities + Capital Balding and Security Cash Fumiture Stock Debtors Creditor. Deposit Capital S.No “Transactions: Ras Rs + Rs + Re RRS | Suni sarod business wih 0_| cash Rs.1.50,000 150,000 150,000 150.000 = 150,000 Baking and Fannie parchased | — (0) | for Rs.100,000 4100.000 1400.00 50,000 + 1.00000 150 000 TPahased goods om Fan on (a | cree 50.000 50.000 + 1.00000 + £0,000 ‘+ 1150.000 Eval fw) | Pad cartage ReS00 500 (€xpense) 8500 + 1000000_+ 50,000 = 50,000) + 1.49500 SORT gpI on creat Goo 3.000 v)_| costing 6,000 fr Rs 9,000 6000 + 9900 (Pro 49500 + 4100000 + 44000 + 9000 = 50,000 + 152500) Fiscened rent For tana “1000 () | ot Rs.1.000 1000 (income) 50,500_+ 1100000 + 44000 + 9000 = 50,000 + 153500 Fiscened Sacuniy Deposits For it | tenants of Rs. 1 500 +1500 1500 52,000 + 00000 + 44000 + 9000 = 50.000 + 1.500 + 153500 Purchased sahonayy for vay | cash Rs.100 109, 100) 51,900 + ‘00000 + 44000 + 9000 = 50000 + 1500+ 1.53.400/ Tresiod a shares 50,000) (| (personal) R50 000 0,000 (Orawings) 1900+ 1100000 + 44000 + 9000 = 50000 + 1500_+_01,03.400| Rsceved itorest of RE200%0 200 0 | cash 200 loco) 2100 + 400.000 + 44000 + 9000 = 50000 + 1500+ 1,03,600 Trvodoced Tesh capaad | otRs.25.000, 25.000 25000 27.100 + 1.00000 + 44000 + 9000 = 50000 + 1.500 + 128.600 ‘Goods of Rs 500 were destoyed 00 (i) | be fre 500 (Loss) 27.100 + __4,00,000 + 43,500 + 9,000 = 50,000 + 1,500 > 120,100 Question 18.Create an Accounting Equation on the basis of the following transactions: i. Commenced busi lil, Sold goods for cash costing Rs.12,000 for Rs.16,000. i, Purchased goods for cash Rs. 40,000. ¥. Purchased goods on credit for Rs.20,000. Vi. Paid rent Rs.3,000 including Rs.2,000 in advance. vii. Paid salaries Rs.2000. vill. Sold goods costing Rs.8,000 for Rs.10,000. ix. Salaries outstanding Rs.1,000. x. Charge depreciation on furniture Rs.500. ‘Solution: ies with cash Rs.50,000, goods Rs.30,000 and furniture Rs.20,000. li. Sold goods to Ajay on credit costing Rs.4,000 for Rs.5,000.ase Prepaid Cash Stock Furnture Debtors. Rent $No| Transactions Ret Ret Re +R fe [can s0000 Stok 20000 Future 20000 apat 1.00000 sao» sooo + 20000 1.00000 ” 4000 eS Sold goods to Ajay on Credit costing Rs. 4,000 5.000 forte 000, +000 spo 6000 + 20000 + 5000 ‘01000 o 16,000 Sold goods for cash ‘costing Rs.12,000 $2,000 + {oc R16 000, 4.000 Som + 14000 + 2000 + S00 1108000| (| eurenases goods tor 40.000 cash Rs40 000 40.000 25.000 + 54000 + 20000 » 5.000 198000 (7 | Purnased goats on 20.000 rest to Re 20.000 20000 3000» 74900 + 70000 + 6.000 20.900 105000 ” 3.000 assent Rs.3.000 ans sneuding R2.000 9 movence =1000 Tow + 74000 + 20000 + 5000 + 200 = 20000 04000 o 2000 Pas sates Rs 2000, 2000 Zio + 74000 + 20000 » S000 + 7000 = 20000 “102000 a 6,000 we ‘Sold goods: ‘costing Rs.8,000 = tor Re10000, 2000 ‘31000 + seq00 + 70000 + 5000 + 2000 = 2000 “104000 ©) | sanes 1.000 custanding R000 1.000 sioo0 + e6o00 + 20000 + 5000 + 200 = 20009 “1000 + 1.03000 9 | charge depreciation on aay turatre R800 500 3000 + 46,000 + 19.800 + 5000 2000 = 20,000 11000 + 4.02500 Question 19.Prepare Accounting Equation from the following: ‘a Started business with cash Rs.1,00,000. b. Purchased goods for cash Rs.20,000 and on credit Rs.30,000. «. Sold goods for cash costing Rs.10,000 and on credit costing Rs.15,000 both at profit of 20%. 4d. Paid salaries Rs.8,000. [Delhi 2012} Solution:‘eNO Transaction ‘Assets = __Usbitities + Capical Cash + Stock —+ Furniture = Creditors + Capital z z ‘ z z 2 _[Starteabusinesswitheash | 100000 1.00000) 100000 = 1£00,000) [Purchased goodsforcash [20000 + ~—50000, = 30000 120.000 and on credit 30.000 0000 + 50000 = 30000 + 100000] © [Soidgoodstorcashcosting | 12000 + 25000 + 16,000 5.000] [¢t0.000andoncreat (Prost costing ®15,000 both at pron of 20%. 72000 + 25000 + 16000 - 30000 + 105,000] &_‘[PaidSataries¥8000 “8000, “6.000 (expense) ‘84000 + 25000 + 18000 - 30000 + 97,000 ‘Question 20.Show the accounting equation on the basis of following transactions: ‘a. Ram started business with Rs.25,000. bb, Purchased goods from Shyam Rs.10,000. ©. Sold goods to Sohan costing Rs.1,500 for Rs.1,800. [MSE Chandigarh 2015} ‘Solution: SNe Transaction ‘Assets = abilities + Capital Cash + ‘Stock + ‘Deblors. == Creditors + Capital z z z z z _[Ramstarted basiness with 25000 25,000) lash 25000 = 25,000) [Purchased goods from Shyam 70,000 30000 25000 + 10000 = 10000 + 250000) [Sold goods to Sohan costing 1500 + 1800 + 300 it1.500 fo 81.800 Prot) 25000 + 8500 + 1800 - 10,000 + 25,200] ‘Question 21.if the capital of a business isRs.2,00,000 and liabilities are Rs.50,000, loss 70,000, calculate the total assets o the business. Solution: TotaiAssets = Capital- Loss + Liabilities ‘+ £2,00,000-270,000 + 250.000 = £280,000 Question 22iif total assets of a business areRs.1,30,000 and net worth is R's.80,000, calculate the creditors. [Hint: Net worth = Assets — Liabilities] Solution: Creditors = Total Assets -Networth + %130000-%80.000 + 50,000 Question 23.4 commenced his cloth business on 1* April 2014 with a capital of Rs.30,000. On 31° March 2015, his assets were worth Rs.50,000 and liabilities of Rs.10,000. Find out his closing capital and profits earned during the year, Solution:Closing Capital = Assets Liabilities = %50.000-810,000 = 40000 Proft = Closing Capital- Opening Capital + ¥40,000-730000 = t10000 ‘Question 24.f capital of a business isRs.1,40,000 and liabilies are of Rs.80,000, calculate the total assets of the business. Solution: TotalAssets = Liabilities + Capital = %80,000+71.40,000 = 3220000 Question 25.Calculate the total assets if: i. Capital is Rs.40,000. ii Creditors are Rs.25,000, Revenue during the period is Rs.50,000. iv. Expenses during the period are Rs.40,000. (Dethi 2001) Solution: Capital atter adjustments = Capital+ Revenue -Expenses = 40000 + 50000 - 40000 = #50000 TotalAssets = Capitalafter adjustment + Creditors = 250,000+225,000 = %75,000 ‘Question 26.2. A had a capital of Rs.75,000 on 1st April 2015. He had also goods amounting to Rs.15,000 which he had Purchased on credit and the payment had not been made, Find out the value of the total assets of the business. b. After a period of one month, he came to know that he had suffered a loss of Rs.1,700. He withdrew Rs.800 for his, Personal use. Find out his capital and assets of the business. ‘Solution: 2 Total Assets : b Revised Capita 2 Assets = Capital + Creditors 375,000 +215,000 90,000 Capital Loss- Drawings 75,000 -81.700-2800 372500 Revised Capita + Creditors 372500+225,000 87,500 ‘Question 27.2. Mohan started a business on 1* April 2014 with a capital of Rs, 10,000 and borrowed Rs.3,000 from a friend. He eamed a profit ofs.5,000 during the year ended 31" march, 2013 and withdrew cash Rs.4,000 for private use. What is his capital on 31% March, 2015? ', Mahesh started a business with capital ofRs.16,000 on 1% April, 2014. During the year he made a profit ofRs.3,000. He ‘owes Rs.2,500 to suppliers of goods. What is the total of assets in his business on 3 March, 2015? ‘Solution:.Capitalon March 31, 2015 = Capitalon Apri102.2014 + Proft- Drawings = %10.000+25,000-%4,000 = %1000 Total Assets on March 31, 2015 = Capital on Apr 02, 2014 + Profit + Creditors = %15,000+3.000+22,500 = %70500 Question 28.Mohan stared a business on 1° April 2014 with a capital of Rs.25,000 and a loan of Rs.12,500 borrowed from ‘Shyam. During 2014-15 he had introduced additional capital of Rs.12,500 and had withdrew Rs.7,500 for personal use. On 31% March 2015 his assets were Rs.75,000. Find out his capital as on 3* March,2015 and profit made or loss incurred during the year 2014 — 15. Solution: Capital on March 31.2015 = Assets-Loan from Shyam = 75,000-212:500 = 32500 Profit (or Loss) during the year 2014 - 15 = Capital on March 31, 2015 + Drawings - (Additional Capital + Capital on April 02.2014) = %62:500+27,500-(812,500 +225,000) = %70.900-837:500 = 32500 ‘Question 29.0n 31% March, 2025, the total assets and external labilties wereR’s.2,00,000 and Rs.6,000 respectively. During the year, the proprietor had introduced capital of Rs.20,000 and withdrawn Rs.12,000 for personal use. He made a Profit of Rs.20,000 during the year. Calculate the capital as on 1* April, 2014. Solution: Capitalon March 31.2015 =Total Assets - External Liabiities = %200000-26000 = £194.00 Capital on March 31.2015 - Additional Capita + Drawings Prost = 21,98.000-220000+212,000-20,000 = ¥1.66.000 Capitaton Apri 01.2018