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11th | Accounting Equation | Question No. 9 to 12 | Ts Grewal Solution 2022-2023

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