Q12 plz

Q12. Show an accounting equation on the basis of the following transactions 

         (i) Ram commenced business with cash Rs. 5,00,000 goods Rs. 60,000 machinery Rs.1,00,000 and furniture Rs. 50,000.

         (ii) 1/3 rd of the 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         (iv) Cash withdrawn for personal use Rs. 70,000.

         (v) Interest on drawings charged @ 5%.

         (vi) Goods sold to Shyam for Rs. 80,000 and received a bill receivable for the same amount for 3 months.

         (vii) Received Rs. 80,000 from Shyam against the bills receivable on its maturity.
 

Dear Student

 
  Particulars Assets Total (Assets) = Liabilities Total (Liabilities) + Capital   Total (Liabilities + Capital)
    Cash Stock machinery Furniture Debtors Bills Receivable     Liabilities          
1 Ram commenced business with cash Rs. 5,00,000 goods Rs. 60,000 machinery Rs.1,00,000 and furniture Rs. 50,000.     500,000     60,000        100,000     50,000       710,000                   -       710,000     710,000
                               
2  1/3 rd of the above goods sold at a profit of 10% on cost and half of the payment is received in cash.
(profit on cost = 20,000 x 10%)
       11,000   (20,000)         11,000          2,000                   -            2,000          2,000
                               
3 Depreciation on machinery provided @ 10%            (10,000)         (10,000)                   -       (10,000)     (10,000)
                               
4 Cash withdrawn for personal use Rs. 70,000.     (70,000)             (70,000)                   -       (70,000)     (70,000)
                               
5 Interest on drawings charged @ 5%. = No treatment as in this case capital would increase and itself would decrease also                            
                               
6 Goods sold to Shyam for Rs. 80,000 and received a bill receivable for the same amount for 3 months. (Assuming profit @ 10% on sales = 80,000 x 10% = 8,000 therefore cost of goods sold is 72,000     (72,000)           80,000        8,000                   -            8,000          8,000
                               
7 Bills receivable matured and payment received        80,000           (80,000)               -                             -  
                               
                               
  Total               640,000 =                 -   +   640,000 =   640,000



Regards


 

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