Chapter 5 -
Accounting Equation
Question 9:
Use accounting equation to show the effect of the
following transactions of M/s Royal traders.
(a) Started business with cash ` 1,20,000.
(b) Purchased goods for cash ` 10,000.
(c) Rent Received ` 5,000.
(d) Salary outstanding `2,000.
(e) Sold goods for cash (costing `
5,000) ` 7,000.
(f) Goods destroyed by fire `500.
Answer:
|
S. No. |
Transactions |
Assets |
= |
Liabilities |
|
+ |
Capital |
||||
|
Cash ( `) |
+ |
Stock ( `) |
|
|
|
O/s Expenses ( `) |
|
|
( `) |
||
|
(a) |
Started business with cash |
1,20,000 |
+ |
|
|
|
= |
|
|
+ |
1,20,000 |
|
|
|
1,20,000 |
+ |
|
|
|
= |
|
|
+ |
1,20,000 |
|
(b) |
Purchased goods for cash |
-10,000 |
+10,000 |
|
|
= |
|
|
|
|
|
|
|
|
1,10,000 |
+ |
10,000 |
|
|
= |
|
|
+ |
1,20,000 |
|
(c) |
Rent Received |
+5,000 |
|
|
|
|
|
|
|
+5,000 |
|
|
|
|
1,15,000 |
+ |
10,000 |
|
|
= |
|
|
+ |
1,25,000 |
|
(d) |
Salary outstanding |
|
|
|
|
|
|
+2,000 |
|
|
-2,000 |
|
|
|
1,15,000 |
+ |
10,000 |
|
|
= |
2,000 |
|
+ |
1,23,000 |
|
(e) |
Sold goods for cash (costing `5,000) ` 7,000 |
+7,000 |
|
-5,000 |
|
|
|
|
|
|
+2,000 |
|
|
|
1,22,000 |
+ |
5,000 |
|
|
= |
2,000 |
|
+ |
1,25,000 |
|
(f) |
Goods destroyed by fire |
|
|
-500 |
|
|
= |
|
|
|
-500 |
|
|
|
1,22,000 |
+ |
4,500 |
|
|
= |
2,000 |
|
|
1,24,500 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Assets |
= |
|
1,22,000 + 4,500 + 18,000 |
|
|
= |
` |
1,27,000 |
|
Liabilities |
= |
` |
2,000 |
|
Capital |
= |
` |
1,24,500 |
Question 10:
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 11:
Show the effect of the following transactions and also prepare a Balance
Sheet:
(i) Started business with cash `
60,000.
(ii) Rent received ` 2,000.
(iii) Accrued interest ` 500.
(iv) Commission received in advance `
1,000.
(v) Amount withdrawn ` 5,000.
Answer:
|
S. No. |
Transaction |
Assets |
= |
Liabilities |
+ |
Capital |
||
|
Cash ( `) |
+ |
Accrued Interest ( `) |
= |
Advance Commission ( `) |
|
( `) |
||
|
(i) |
Started business with Cash ` 60,000 |
60,000 |
|
|
= |
|
|
60,000 |
|
|
|
60,000 |
|
|
= |
|
|
60,000 |
|
(ii) |
Rent Received ` 2,000 |
2,000 |
|
|
= |
|
|
2,000 (Income) |
|
|
|
62,000 |
|
|
= |
|
|
62,000 |
|
(iii) |
Accrued Interest ` 500 |
|
|
500 |
= |
|
|
500 (Income) |
|
|
|
62,000 |
+ |
500 |
= |
|
|
62,500 |
|
(iv) |
Commission received in advance ` 1,000 |
1,000 |
|
|
= |
1,000 |
|
|
|
|
|
63,000 |
+ |
500 |
= |
1,000 |
+ |
62,500 |
|
(v) |
Amount withdrawn ` 5,000 |
– 5,000 |
|
|
= |
|
|
– 5,000 |
|
|
|
58,000 |
+ |
500 |
= |
1,000 |
+ |
57,500 |
|
Balance Sheet |
|||
|
Liabilities |
Amount ( `) |
Assets |
Amount ( `) |
|
Capital |
57,500 |
Cash |
58,000 |
|
Advance Commission |
1,000 |
Accrued Interest |
500 |
|
|
58,500 |
|
58,500 |
|
|
|
|
|
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 |
|
|
|
|
|
Ts Grewal Solution 2022-2023
Click below for more Questions
Chapter 5 – Accounting Equation
Question No. 1 To 4
Question No. 5 To 8
Question No. 9 To 12
Question No. 13 To 16
Question No. 17 To 20
Question No. 21 To 24
Question No. 25 To 26