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11th | Chapter 2 – Basic Accounting Terms | Question No. 1 | Ts Grewal Solution 2022-2023

 

Question 1:

Gopal started business for buying and selling of readymade garments with `8,00,000 as an initial investment. Out of this he paid `4,00,000 for the purchase of garments and `50,000 for furniture and `50,000 for computer and the remaining amount was deposited into the bank. He sold some of the ladies and kids garments for `3,00,000 for cash and some garments for `1,50,000 on credit to Rajesh.

Subsequently, he bought men’s garments of `2,00,000 from Satish. In the first week of the next month, a fire broke out in his office and stock of garments worth `1,00,000 was destroyed. Later on, some garments which cost `1,20,000 were sold for `1,30,000. Expenses paid during the same period were `15,000. Gopal withdrew `20,000 from business for his domestic use. 
From the above, answer the following:
(i) What is the amount of capital with which Gopal started the business?
(ii) What fixed assets did he buy?
(iii) What is the value of the goods purchased?
(iv) Who is the creditor and state the amount payable to him?
(v) Who is the debtor and what is the amount receivable from him?
(vi) What is the total amount of expenses?
(vii) What is the amount of drawings of Gopal?

Answer:

(i) Initial Investment made by Gopal for starting the business of “Readymade Garments” is ` 8,00,000.

(ii) He bought two Fixed Assets i.e. Furniture and Computer of  `50,000 each.
Therefore,
Total Fixed Assets bought by him = Furniture + Computer
                                                       = 50,000 + 50,000
                                                       = ` 1,00,000

(iii) Value of the goods purchased by Gopal (Proprietor) = Purchase of Garments + Purchase of Men’s Garments
Value of the goods purchased by Gopal (Proprietor) = 4,00,000 + 2,00,000
Value of the goods purchased by Gopal (Proprietor) = ` 6,00,000

(vi) Satish is the creditor of business with ` 2,00,000.

(v) Rajesh is the debtor of the business with ` 1,50,000.

(vi) Total amount of Expenses = ` 15,000.

(vii) Gopal withdrew ` 20,000 for domestic use (Drawings).

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