Question 11:
Prove that the Accounting
Equation is satisfied in all the following transactions of Suresh. Also prepare
a Balance Sheet.
(i) Commenced business with cash ` 60,000.
(ii) Paid rent in advance ` 500.
(iii) Purchased goods for cash ` 30,000 and
credit ` 20,000.
(iv) Sold goods for cash ` 30,000 costing ` 20,000.
(v) Paid salary ` 500 and salary
outstanding being ` 100.
(vi) Bought motorcycle for personal use ` 5,000.
Answer:
|
S. No. |
Transactions |
Assets |
= |
Liabilities |
+ |
Capital |
||||||
|
Cash ( `) |
+ |
Prepaid Rent ( `) |
+ |
Stock ( `) |
|
Creditors ( `) |
+ |
Salary outstanding ( `) |
|
( `) |
||
|
(i) |
Commenced business with cash ` 60,000 |
60,000 |
|
|
|
|
|
|
|
|
|
60,000 |
|
|
|
60,000 |
|
|
|
|
= |
|
|
|
|
60,000 |
|
(ii) |
Paid Rent in Advance ` 500 |
– 500 |
+ |
500 |
|
|
|
|
|
|
|
|
|
|
|
59,500 |
+ |
500 |
|
|
= |
|
|
|
|
60,000 |
|
(iii) |
Purchased goods for Cash ` 30,000 and Credit ` 20,000 |
– 30,000 |
+ |
|
|
50,000 |
|
20,000 |
|
|
|
|
|
|
|
29,500 |
+ |
500 |
+ |
50,000 |
= |
20,000 |
|
|
+ |
60, 000 |
|
(iv) |
Sold goods for Cash ` 30,000 Costing ` 20,000 |
30,000 |
+ |
|
+ |
– 20,000 |
|
|
|
|
|
10,000 (Profit) |
|
|
|
59,500 |
+ |
500 |
+ |
30,000 |
= |
20,000 |
|
|
+ |
70,000 |
|
(v) |
Paid Salary ` 500 and Salary
Outstanding being ` 100 |
– 500 |
|
|
|
|
= |
|
|
|
|
– 500 |
|
|
|
|
|
|
|
|
|
|
|
100 |
|
– 100 |
|
|
|
59,000 |
+ |
500 |
+ |
30,000 |
= |
20,000 |
+ |
100 |
+ |
69,400 |
|
(vi) |
Brought motorcycle for personal use ` 5,000 |
– 5000 |
|
|
|
|
= |
|
|
|
|
– 5000 (Drawings) |
|
|
|
54,000 |
+ |
500 |
+ |
30,000 |
= |
20,000 |
+ |
100 |
+ |
64,400 |
|
Assets |
= |
|
54,000 + 500 + 30,000 |
|
|
= |
` |
84,500 |
|
Liabilities |
= |
|
20,000 + 100 |
|
|
= |
` |
20,100 |
|
Capital |
= |
|
64,400 |
|
Balance Sheet |
|||
|
Liabilities |
Amount ( `) |
Assets |
Amount ( `) |
|
Capital |
64,400 |
Cash |
54,000 |
|
Creditors |
20,000 |
Prepaid Rent |
500 |
|
Salary Outstanding |
100 |
Stock |
30,000 |
|
|
85,500 |
|
85,500 |
|
|
|
|
|
Question 12
Raghunath had the following transactions in an accounting year:
(i) Commenced business with cash `50,000.
(ii) Paid into bank `10,000.
(iii) Purchased goods for cash `20,000
and credit `30,000.
(iv) Sold goods for cash `40,000
costing `30,000.
(v) Rent paid `500.
(vi) Rent outstanding `100.
(vii) Bought furniture `5,000
on credit.
(viii) Bought refrigerator for personal use `5,000.
(ix) Purchased motorcycle for cash
`20,000.
Create an Accounting Equation to show the effect of the above and also show his
Balance Sheet.
Answer:
|
S. No. |
Transaction |
Assets |
= |
Liabilities |
+ |
Capital |
||||||||||
|
Cash ( `) |
+ |
Bank ( `) |
+ |
Stock ( `) |
+ |
Furniture ( `) |
+ |
Motor Cycle ( `) |
= |
Creditors ( `) |
+ |
Outstanding Rent ( `) |
|
( `) |
||
|
(i) |
Commenced business with cash ` 50,000 |
50,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
50,000 |
|
|
|
50,000 |
|
|
|
|
|
|
|
|
= |
|
|
|
|
50,000 |
|
(ii) |
Paid in to bank ` 10,000 |
– 10,000 |
+ |
10,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
40,000 |
+ |
10,000 |
|
|
|
|
|
|
= |
|
|
|
|
50,000 |
|
(iii) |
Purchased goods for Cash ` 20,000 and Credit ` 30,000 |
–20,000 |
|
|
+ |
20,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
30,000 |
|
|
|
|
|
30,000 |
|
|
|
|
|
|
|
20,000 |
+ |
10,000 |
+ |
50,000 |
|
|
|
|
= |
30,000 |
|
|
+ |
50,000 |
|
(iv) |
Sold goods for Cash ` 40,000 Costing ` 30,000 |
40,000 |
|
|
|
– 30,000 |
|
|
|
|
= |
|
|
|
|
10,000 (Expense) |
|
|
|
60,000 |
+ |
10,000 |
+ |
20,000 |
|
|
|
|
= |
30,000 |
|
|
+ |
60,000 |
|
(v) |
Rent paid ` 500 |
– 500 |
|
|
|
|
|
|
|
|
= |
|
|
|
|
– 500 (Expense) |
|
|
|
59,500 |
+ |
10,000 |
+ |
20,000 |
|
|
|
|
= |
30,000 |
|
|
+ |
59,500 |
|
(vi) |
Rent Outstanding ` 100 |
|
|
|
|
|
|
|
|
|
|
|
|
100 |
+ |
– 100 (Expense) |
|
|
|
59,500 |
+ |
10,000 |
+ |
20,000 |
|
|
|
|
= |
30,000 |
+ |
100 |
+ |
59,400 |
|
(vii) |
Bought furniture ` 5,000 on credit |
|
|
|
|
|
|
5,000 |
|
|
= |
5,000 |
|
|
|
|
|
|
|
59,500 |
+ |
10,000 |
+ |
20,000 |
+ |
5,000 |
|
|
= |
35,000 |
+ |
100 |
+ |
59,400 |
|
(viii) |
Bought refrigerator for personal use ` 5,000 |
– 5,000 |
|
|
|
|
|
|
|
|
= |
|
|
|
|
– 5,000 (Drawings) |
|
|
|
54,500 |
+ |
10,000 |
+ |
20,000 |
+ |
5,000 |
|
|
= |
35,000 |
+ |
100 |
+ |
54,400 |
|
(ix) |
Purchased motorcycle for cash |
– 20,000 |
|
|
|
|
|
|
+ |
20,000 |
|
|
|
|
|
|
|
|
|
34,500 |
+ |
10,000 |
+ |
20,000 |
+ |
5,000 |
+ |
20,000 |
= |
35,000 |
+ |
100 |
+ |
54,400 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance Sheet |
|||
|
Liabilities |
Amount ( `) |
Assets |
Amount ( `) |
|
Capital |
54,400 |
Cash |
34,500 |
|
Creditors |
35,000 |
Bank |
10,000 |
|
Rent Outstanding |
100 |
Stock |
20,000 |
|
|
|
Furniture |
5,000 |
|
|
|
Motor Cycle |
20,000 |
|
|
89,500 |
|
89,500 |
|
|
|
|
|
Question 13:
Prepare an Accounting Equation from the following:
(i) Started business with cash `
50,000 and goods ` 30,000.
(ii) Purchased goods for cash `
30,000 and on credit from Karan `
20,000.
(iii) Goods costing `
40,000 were sold for `
55,000.
(iv) Withdrew cash for personal use `
10,000.
(v) Rent outstanding `
2,000.
Answer:
|
S. No. |
Transactions |
Assets |
= |
Liabilities |
+ |
Capital |
||||
|
Cash ( `) |
+ |
Stock ( `) |
|
Creditors ( `) |
+ |
Outstanding Rent ( `) |
|
( `) |
||
|
(i) |
Started business with cash ` 50,000 and goods ` 30,000 |
50,000 |
+ |
30,000 |
|
|
|
|
|
80,000 |
|
|
|
50,000 |
+ |
30,000 |
= |
|
|
|
|
80,000 |
|
(ii) |
Purchased goods for cash ` 30,000 and on credit from Karan ` 20,000 |
– 30,000 |
|
30,000 |
|
|
|
|
|
|
|
|
|
|
|
20,000 |
|
20,000 |
|
|
|
|
|
|
|
20,000 |
+ |
80,000 |
= |
20,000 |
|
|
+ |
80,000 |
|
(iii) |
Goods costing ` 40,000 were sold for ` 55,000 |
55,000 |
|
- 40,000 |
|
|
|
|
|
15,000 (Profit) |
|
|
|
75,000 |
+ |
40,000 |
= |
20,000 |
|
|
+ |
95,000 |
|
(iv) |
Withdrew cash for personal use ` 10,000 |
– 10,000 |
|
|
|
|
|
|
|
– 10,000 (Drawings) |
|
|
|
65,000 |
+ |
40,000 |
= |
20,000 |
|
|
+ |
85,000 |
|
(v) |
Rent outstanding ` 2,000 |
|
|
|
|
|
|
2,000 |
|
– 2,000 (Expenses) |
|
|
|
65,000 |
+ |
40,000 |
= |
20,000 |
+ |
2,000 |
+ |
83,000 |
|
|
|
|
|
|
|
|
|
|
|
|
Question 14:
Show an Accounting Equation for the following transactions:
(i) D. Mahapatra commenced business with cash `
50,000 and `
1,00,000 by cheque; goods `
60,000; machinery `
1,00,000 and furniture ` 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 `
10,000.
(v) Interest on drawings charged @ 5%.
(vi) Goods Sold for cash `
10,000 at par.
Answer:
|
|
Transactions |
Assets |
= |
Liabilities |
+ |
Capital |
||||||||||||
|
Cash ( `) |
+ |
Bank |
+ |
Stock ( `) |
+ |
Machinery ( `) |
+ |
Furniture ( `) |
+ |
Debtors ( `) |
|
|
|
( `) |
||||
|
(1) |
Started Business with Cash of ` 50,000 and Bank of ` 1,00,000 |
50,000 |
+ |
1,00,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
1,50,000 |
|
|
Stock ` 60,000 |
|
|
|
|
60,000 |
|
|
|
|
|
|
|
|
|
|
|
60,000 |
|
|
Machinery ` 1,00,000 |
|
|
|
|
|
|
1,00,000 |
|
|
|
|
|
|
|
|
|
1,00,000 |
|
|
Furniture ` 50,000 |
|
|
|
|
|
|
|
|
50,000 |
|
|
|
|
|
|
|
50,000 |
|
|
|
50,000 |
+ |
1,00,000 |
+ |
60,000 |
+ |
1,00,000 |
+ |
50,000 |
|
|
|
|
= |
|
|
3,60,000 |
|
(ii) |
1/3rd of above goods sold at a profit of 10% on cost, that is, 60,000 × 1/3 = 20,000 × 110% = 22,000 and half of this is received in Cash |
11,000 |
|
|
|
(20,000) |
|
|
|
|
|
11,000 |
|
|
|
|
|
2,000 (Profit) |
|
|
|
61,000 |
+ |
1,00,000 |
+ |
40,000 |
+ |
1,00,000 |
+ |
50,000 |
+ |
11,000 |
|
|
= |
|
|
3,62,000 |
|
(iii) |
Depreciate Machinery by 10% (1,00,000 × 10%) |
|
|
|
|
|
|
(10,000) |
|
|
|
|
|
|
|
|
|
(10,000) Expenses |
|
|
|
61,000 |
+ |
1,00,000 |
+ |
40,000 |
+ |
90,000 |
+ |
50,000 |
+ |
11,000 |
|
|
= |
|
|
3,52,000 |
|
(iv) |
Cash withdrawn for personal use |
(10,000) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(10,000) |
|
|
|
51,000 |
+ |
1,00,000 |
+ |
40,000 |
+ |
90,000 |
+ |
50,000 |
+ |
11,000 |
|
|
= |
|
|
3,42,000 |
|
(v) |
Interest on Drawings charged @ 5% (10,000 × 5%) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(500) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
500 |
|
|
|
51,000 |
+ |
1,00,000 |
+ |
40,000 |
+ |
90,000 |
+ |
50,000 |
+ |
11,000 |
|
|
= |
|
|
3,42,000 |
|
(vi) |
Goods Sold for cash` 10,000 at par |
10,000 |
|
|
|
(10,000) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
|
|
|
61,000 |
+ |
1,00,000 |
+ |
30,000 |
+ |
90,000 |
+ |
50,000 |
+ |
11,000 |
= |
NIL |
+ |
3,42,000 |
||
Question 15:
Show an Accounting Equation on the basis of the following transactions:
|
|
|
` |
|
(i) |
Sunil started business with cash |
1,50,000 |
|
(ii) |
Opened a Bank Account by depositing cash |
25,.000 |
|
(iii) |
He
sold his personal car and deposited the amount in the firm's Bank Account |
50,000 |
|
(iv) |
He
purchased a building and furniture for |
1,00,000 |
|
(v) |
He
purchased goods from Ram on credit |
50,000 |
|
(vi) |
He
paid cartage |
500 |
|
(vii) |
He
sold to Shyam on credit goods costing `6,000 for |
9,000 |
|
(viii) |
Received rent from tenants |
1,000 |
|
(ix) |
Received security deposit from tenants |
1,500 |
|
(x) |
Purchased stationery for cash |
100 |
|
(xi) |
Invested in shares (personal) |
50,000 |
|
(xii) |
Received interest in cash |
200 |
|
(xiii) |
Introduced fresh capital |
25,000 |
|
(xiv) |
Goods destroyed by fire |
500 |
Answer:
|
|
Transactions |
Assets |
|
Liabilities |
+ |
Capital |
||||||||||
|
Cash ( `) |
+ |
Bank |
+ |
Building and Furniture ( `) |
+ |
Stock ( `) |
+ |
Debtors ( `)
|
= |
Creditors ( `) |
+ |
Security Deposits ( `) |
|
( `) |
||
|
(i) |
Sunil started business with Cash `1,50,000. |
1,50,000 |
|
|
|
|
|
|
|
|
|
|
|
|
1,50,000 |
|
|
|
|
1,50,000 |
|
|
|
|
|
|
|
|
= |
|
|
|
|
1,50,000 |
|
(ii) |
Opened
Bank Account by depositing `25,000 from cash |
– 25,000 |
|
25,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,25,000 |
+ |
25,000 |
|
|
|
|
|
|
|
|
|
|
|
1,50,000 |
|
(iii) |
Sold
personal car for `
50,000 and deposited money in Bank A/c |
|
|
50,000 |
|
|
|
|
|
|
|
|
|
|
50,000 |
|
|
|
|
1,25,000 |
+ |
75,000 |
|
|
|
|
|
|
|
|
|
|
|
2,00,000 |
|
(ii) |
Building and Furniture purchased for `1,00,000 |
– 1,00,000 |
|
|
|
1,00,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
25,000 |
+ |
75,000 |
+ |
1,00,000 |
|
|
|
|
|
|
|
|
|
2,00,000 |
|
(iii) |
Purchased goods from Ram on credit |
|
|
|
|
|
|
50,000 |
|
= |
50,000 |
|
|
|
|
|
|
|
|
25,000 |
+ |
75,000 |
+ |
1,00,000 |
+ |
50,000 |
|
|
= |
50,000 |
|
|
+ |
2,00,000 |
|
(iv) |
Paid Cartage `500 |
– 500 |
|
|
|
|
|
|
|
|
|
|
|
|
|
– 500 (Expenses) |
|
|
|
24,500 |
+ |
75,000 |
+ |
1,00,000 |
+ |
50,000 |
|
|
= |
50,000 |
|
|
+ |
1,99,500 |
|
(v) |
Sold to Shyam on credit goods costing ` 6,000 for ` 9,000 |
|
|
|
|
|
|
–6,000 |
|
9,000 |
|
|
|
|
|
3,000 (Profits) |
|
|
|
24,500 |
+ |
75,000 |
+ |
1,00,000 |
+ |
44,000 |
+ |
9,000 |
= |
50,000 |
|
|
+ |
2,02,500 |
|
(vi) |
Received rent from tenants of ` 1,000 |
1,000 |
|
|
|
|
|
|
|
|
|
|
|
|
1,000 (Incomes) |
|
|
|
|
25,500 |
+ |
75,000 |
+ |
1,00,000 |
+ |
44,000 |
+ |
9,000 |
= |
50,000 |
|
|
+ |
2,03,500 |
|
(vii) |
Received Security Deposits from tenants of ` 1,500 |
1,500 |
|
|
|
|
|
|
|
|
|
|
1,500 |
|
|
|
|
|
|
27,000 |
+ |
75,000 |
+ |
1,00,000 |
+ |
44,000 |
+ |
9,000 |
= |
50,000 |
+ |
1,500 |
+ |
2,03,500 |
|
(viii) |
Purchased Stationery for Cash of ` 100 |
– 100 |
|
|
|
|
|
|
|
|
|
|
|
|
–100 (Expense) |
|
|
|
|
26,900 |
+ |
75,000 |
+ |
1,00,000 |
+ |
44,000 |
+ |
9,000 |
= |
50,000 |
+ |
1,500 |
+ |
2,03,400 |
|
(ix) |
Invested in Shares (personal) ` 50,000 |
|
|
- 50,000 |
|
|
|
|
|
|
|
|
|
|
– 50,000 (Drawings) |
|
|
|
|
26,900 |
+ |
25,000 |
+ |
1,00,000 |
+ |
44,000 |
+ |
9,000 |
= |
50,000 |
+ |
1,500 |
+ |
1,53,400 |
|
(x) |
Received Interest of ` 200 in Cash |
200 |
|
|
|
|
|
|
|
|
|
|
|
|
200 (Income) |
|
|
|
|
27,100 |
+ |
25,000 |
+ |
1,00,000 |
+ |
44,000 |
+ |
9,000 |
= |
50,000 |
+ |
1,500 |
+ |
1,53,600 |
|
(xi) |
Introduced fresh Capital of ` 25,000 |
25,000 |
|
|
|
|
|
|
|
|
|
|
|
|
25,000 |
|
|
|
|
52,100 |
+ |
25,000 |
+ |
1,00,000 |
+ |
44,000 |
+ |
9,000 |
= |
50,000 |
+ |
1,500 |
+ |
1,78,600 |
|
(xii) |
Goods of ` 500 were destroyed by fire |
|
|
|
|
|
|
– 500 |
|
|
|
|
|
|
– 500 (Loss) |
|
|
|
|
52,100 |
+ |
25,000 |
+ |
1,00,000 |
+ |
43,500 |
+ |
9,000 |
= |
50,000 |
+ |
1,500 |
+ |
1,78,100 |
|
Assets |
= |
52,100 + 25,000 + 1,00,000 + 43,500 + 9,000 = 2,29,600 |
|
Liabilities |
= |
50,000 + 1,500 = 51,500 |
|
Capital |
= |
1,78,100 |
Ts Grewal Solution 2025-2026
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Chapter 5 – Accounting Equation
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Question No. 21 To 25