Double Entry Book Keeping Ts Grewal 2018 Solutions for Class 11 Commerce Accountancy Chapter 2 Accounting Equation are provided here with simple step-by-step explanations. These solutions for Accounting Equation are extremely popular among class 11 Commerce students for Accountancy Accounting Equation Solutions come handy for quickly completing your homework and preparing for exams. All questions and answers from the Double Entry Book Keeping Ts Grewal 2018 Book of class 11 Commerce Accountancy Chapter 2 are provided here for you for free. You will also love the ad-free experience on Meritnation’s Double Entry Book Keeping Ts Grewal 2018 Solutions. All Double Entry Book Keeping Ts Grewal 2018 Solutions for class 11 Commerce Accountancy are prepared by experts and are 100% accurate.

Page No 5.17:

Question 1:

What will be effect of the following on the Accounting Equation?
(i) Started business with cash ₹ 45,000
(ii) Opened a Bank Account with a deposit of ₹ 4,500
(iii) Bought goods from M\s. Sun & Co. for ₹ 11,200

Answer:

S. No.

 

Transactions

Assets

=

Liabilities

+

Capital

Cash

(Rs)

+

Bank

(Rs)

+

Stock

(Rs)

=

Creditors

(Rs)

 

 

(Rs)

(i)

Started business with cash

45,000

 

 

 

 

=

 

 

45,000

 

 

45,000

 

 

 

 

=

 

 

45,000

(ii)

Opened a Bank Account with a deposit

– 4,500

+

4,500

 

 

=

 

 

 

 

 

40,500

+

4,500

 

 

=

 

 

45,000

(iii)

Bought goods from M/s. Sun & Co.

 

 

 

 

11,200

=

11,200

 

 

 

 

40,500

+

4,500

+

11,200

=

11,200

+

45,000

 

 

 

 

 

 

 

 

 

 

 

 

Total Assets

=

 

Cash + Bank + Stock

 

=

 

40,500 + 4,500 + 11,200

 

=

Rs

56,200

Liabilities

=

 

11,200

Capital

=

 

45,000

Page No 5.17:

Question 2:

Show the Accounting Equation for the following transactions:

   
(i)  Gopinath started business with cash  25,000
(ii)   Purchased goods from Shyam 10,000
(iii)  Sold goods to Sohan costing ₹ 1,800 1,500
(iv)  Gopinath withdrew from business  5,000

Answer:

S. No

Transactions

Assets

=

Liabilities

+

Capital

Cash

(Rs)

+

Stock

(Rs)

+

Debtors

(Rs)

 

Creditors

(Rs)

 

 

(Rs)

(i)

Gopinath Started business with

25,000

 

 

 

 

=

 

 

25,000

 

 

25,000

 

 

 

 

=

 

 

25,000

(ii)

Purchased goods from Shyam

 

 

10,000

 

 

 

10,000

 

 

 

 

25,000

+

10,000

 

 

=

10,000

+

25,000

(iii)

Sold goods to Sohan

 

 

– 1,800

+

1,500

=

 

 

– 300

 

 

25,000

+

8,200

+

1,500

=

10,000

+

24,700

(iv)

Gopinath withdrew from business

–5,000

 

 

 

 

=

 

 

– 5,000

 

 

20,000

+

8,200

+

1,500

=

10,000

+

19,700

 

 

 

 

 

 

 

 

 

 

 

 

Assets

=

 

20,000 + 8,200 + 1,500

 

=

Rs

29,700

Liabilities

=

Rs

10,000

Capital

=

Rs

19,700

 



Page No 5.18:

Question 3:

Show the effect of the following transactions on the Accounting Equation:
(i) Started business with cash ₹ 50,000.
(ii) Salaries paid  ₹ 2,000.
(iii) Wages Outstanding ₹ 200.
(iv) Interest due but not paid ₹ 100.
(v) Rent paid in advance ₹ 150.

 

Answer:

S. No.

Transactions

Assets

=

Liabilities

+

Capital

Cash

(Rs)

+

Advances Expenses

(Rs)

=

Outstanding Expenses

(Rs)

 

 

(Rs)

(i)

Started business with Cash

50,000

 

 

=

 

 

50,000

 

 

50,000

 

 

=

 

 

50,000

(ii)

Salaries paid

 – 2,000

 

 

=

 

 

– 2,000

(expenses)

 

 

48,000

 

 

=

 

 

48,000

(iii)

Wages Outstanding

 

 

 

=

200

+

– 200

(expenses)

 

 

4,800

 

 

=

200

 

47,800

(iv)

Interest due but not paid

 

 

 

=

100

+

– 100

(expenses)

 

 

48,000

 

 

=

300

+

47,700

(v)

Rent paid in advance

 – 150

+

150

=

 

 

 

 

 

47,850

+

150

=

300

+

47,700

 

 

 

 

 

 

 

 

 

 

Assets

=

 

47,850 + 150

 

=

Rs

48,000

Liabilities

=

Rs

300

Capital

=

Rs

47,700

Page No 5.18:

Question 4:

What will be the effect of the following on the Accounting Equation?
(i) Harish started business with cash ₹ 18,000
(ii) Purchased goods for Cash ₹ 5,000 and on credit ₹ 2,000
(iii) Sold goods for cash ₹ 4,000 (costing ₹ 2,400)
(iv) Rent paid ₹ 1,000 and rent outstanding ₹ 200

Answer:

S. No.

Transactions

Assets

=

Liabilities

+

Capital

Cash

(Rs)

+

Stock

(Rs)

=

Creditors

(Rs)

+

Outstanding Rent

(Rs)

 

 

(Rs)

(i)

Harish started business with cash

18,000

 

 

=

 

 

 

 

18,000

 

 

18,000

 

 

=

 

 

 

 

18,000

(ii)

Purchased goods for Cash Rs 5,000 and on credit Rs 2,000

– 5,000

+

7,000

=

2,000

 

 

 

 

 

 

13,000

+

7,000

=

2,000

 

 

+

18,000

(iii)

Sold goods for cash Rs 4,000 costing Rs 2,400

4,000

 

– 2,400

=

 

 

 

 

1,600

(Profit)

 

 

17,000

+

4,600

=

2,000

 

 

+

19,600

(iv)

Rent paid Rs 1,000 and Rent Outstanding Rs 200

– 1,000

 

 

=

 

 

200

 

– 1,200

 

 

16,000

+

4,600

=

2,000

+

200

+

18,400

 

 

 

 

 

 

 

 

 

 

 

 

Assets

=

 

16,000 + 4,600

 

=

Rs

20,600

Liabilities

=

 

2,000 + 200

 

=

Rs

2,200

Capital

=

Rs

18,400

Page No 5.18:

Question 5:

Prepare Accounting Equation from the following:
(i) Started business with cash ₹ 1,00,000 and Goods ₹ 20,000.
(ii) Sold goods worth ₹ 10,000 for cash ₹ 12,000.
(iii) Purchased furniture on credit for ₹ 30,000.

Answer:

S. No.

Transaction

Assets

=

Liabilities

+

Capital

Cash

(Rs)

+

Stock

(Rs)

+

Furniture

(Rs)

=

Creditors

(Rs)

 

 

(Rs)

(i)

Started business with cash Rs 1,00,000 and Goods Rs 20,000

1,00,000

+

20,000

 

 

=

 

 

1,20,000

 

 

1,00,000

+

20,000

 

 

=

 

 

1,20,000

(ii)

Sold goods worth Rs 10,000 for cash Rs 12,000

12,000

 

– 10,000

 

 

=

 

+

2,000

 

 

1,12,000

+

10,000

 

 

=

 

 

1,22,000

(iii)

Purchased furniture on credit for Rs 30,000

 

 

 

 

30,000

=

30,000

 

 

 

 

1,12,000

+

10,000

+

30,000

=

30,000

+

1,22,000

 

Assets

=

 

1,12,000 + 10,000 + 30,000

 

=

Rs

1,52,000

Liabilities

=

Rs

30,000

Capital

=

Rs

1,22,000

 

Page No 5.18:

Question 6:

Prepare an Accounting Equation and Balance Sheet on the following basis:
(i) Ajeet started business with cash ₹ 20,000.
(ii) He purchased furniture for ₹ 2,000.
(iii) He paid rent of ₹ 200.
(iv) He purchase goods on credit ₹ 3,000.
(v) He sold goods (cost price ₹ 2,000) for ₹ 5,000 on cash.

Answer:

 

S. No.

Transaction

Assets

=

Liabilities

+

Capital

Cash

(Rs)

+

Furniture

(Rs)

+

Stock

(Rs)

=

 

 

 

(Rs)

(i)

Ajit started business Rs 20,000

20,000

 

 

 

 

=

 

 

20,000

 

 

20,000

 

 

 

 

=

 

 

20,000

(ii)

He purchased furniture for Rs 2,000

 – 2,000

+

2,000

 

 

=

 

 

 

 

 

18,000

+

2,000

 

 

=

 

 

20,000

(iii)

He paid Rent of Rs 200

 – 200

 

 

 

 

=

 

 

– 200

(expense)

 

 

17,800

+

2,000

 

 

=

 

 

19,800

(iv)

He purchased goods on credit Rs 3,000

 

 

 

 

3,000

=

3,000

 

 

 

 

17,800

+

2,000

+

3,000

=

3,000

+

19,800

(v)

He sold goods (cost price Rs (2,000) for Rs 5,000 on cash

5,000

+

 

+

–2,000

=

 

 

3,000

(Profit)

 

 

22,800

+

2,000

+

1,000

=

3,000

+

22,800

 

 

 

 

 

 

 

 

 

 

 

 

Assets

=

 

22,800 + 2,000 + 1,000

 

=

Rs

25,800

Liabilities

=

Rs

3,000

Capital

=

Rs

22,800

 

Balance Sheet

Liabilities

Amount (Rs)

Assets

Amount (Rs)

Capital

22,800

Cash

22,800

Creditors

3,000

Furniture

2,000

 

 

Stock

1,000

 

25,800

 

25,800

 

 

 

 

 

Page No 5.18:

Question 7:

Prepare an Accounting Equation from the following:
(i) Started business with cash ₹ 1,00,000.
(ii) Purchased goods for cash ₹ 20,000 and on credit ₹ 30,000.
(iii) Sold goods for cash costing ₹ 10,000 and on credit costing ₹ 15,000 both at a profit of 20%.

Answer:

 

S. No.

Transaction

Assets

=

Liabilities

+

Capital

Cash

(Rs)

+

Stock

(Rs)

+

Debtors

(Rs)

=

Creditors

(Rs)

 

 

(Rs)

(i)

Started business with cash Rs 1,00,000

1,00,000

 

 

 

 

=

 

 

1,00,000

 

 

1,00,000

 

 

 

 

=

 

 

1,00,000

(ii)

Purchased goods for cash Rs 20,000 and on credit Rs 30,000

 – 20,000

+

20,000

 

 

 

 

 

 

 

 

 

 

30,000

 

 

=

30,000

 

 

 

 

80,000

+

50,000

 

 

=

30,000

+

1,00,000

(iii)

Sold goods for cash costing Rs 10,000 and on credit costing

12,000

+

– 10,000

 

 

=

 

 

2,000

 

Rs 15,000 both at a profit of 20%

 

 

– 15,000

+

18,000

=

 

 

3,000

 

 

92,000

+

25,000

+

18,000

=

30,000

+

1,05,000

 

 

 

 

 

 

 

 

 

 

 

 

Page No 5.18:

Question 8:

Develop an Accounting Equation from the following transactions:

     ₹
(i)  Mohan commenced business with cash 50,000
(ii)   Purchased goods for cash 30,000
(iii)  Purchased goods on credit  20,000
(iv)  Sold goods (costing 10,000) for 12,000
(v)  Bought furniture on credit 2,000
(vi)
(vii)
 Paid cash to a creditor
 Salary paid
15,000
1,000

Answer:

S. No.

Transaction

Assets

=

Liabilities

+

Capital

Cash

(Rs)

+

Stock

(Rs)

+

Furniture

(Rs)

=

Creditors

(Rs)

 

 

(Rs)

(i)

Mohan commenced business with cash

50,000

 

 

 

 

=

 

 

 50,000

 

 

50,000

 

 

 

 

=

 

 

 50,000

(ii)

Purchased goods for cash

 – 30,000

+

30,000

 

 

=

 

 

 

 

 

20,000

+

30,000

 

 

=

 

 

50,000

(iii)

Purchased goods on credit

 

 

20,000

 

 

=

20,000

 

 

 

 

20,000

+

50,000

 

 

=

20,000

+

50,000

(iv)

Sold goods costing Rs 10,000 for Rs 12,000

12,000

+

– 10,000

 

 

=

 

 

2,000

(profit)

 

 

32,000

+

40,000

 

 

=

20,000

+

52,000

(v)

Bought furniture on credit

 

 

 

 

2,000

=

2,000

 

 

 

 

32,000

+

40,000

+

2,000

=

22,000

+

52,000

(vi)

Paid cash to a creditor

 – 15,000

 

 

 

 

=

– 15,000

 

 

 

 

17,000

+

40,000

+

2,000

=

7,000

+

52,000

(vii)

Salary Paid

 – 1,000

 

 

 

 

=

 

 

– 1,000 (expenses)

 

 

16,000

+

40,000

+

2,000

=

7,000

+

51,000

 

 

 

 

 

 

 

 

 

 

 

 

Assets

=

 

16,000 + 40,000 + 2,000

 

=

Rs

58,000

Liabilities

=

Rs

7,000

Capital

=

Rs

51,000

 



Page No 5.19:

Question 9:

Prepare an Accounting Equation on the basis of the following transactions:
(i) Started business with cash ₹ 70,000.
(ii) Credit purchase of goods ₹ 18,000.
(iii) Payment made to creditors in full settlement ₹ 17,500.
(iv) Purchase of machinery for cash ₹ 20,000.
(v) Depreciation on machinery ₹ 2,000.

Answer:

 

S. No.

Transaction

Assets

=

Liabilities

+

Capital

Cash

(Rs)

+

Stock

(Rs)

+

Machinery

(Rs)

 

 

(Rs)

 

 

(Rs)

(i)

Started business with Cash Rs 70,000

70,000

 

 

 

 

 

 

 

70,000

 

 

70,000

 

 

 

 

 

 

 

70,000

(ii)

Credit purchase of goods Rs 18,000

 

 

18,000

 

 

=

18,000

 

 

 

 

70,000

+

18,000

 

 

=

18,000

+

70,000

(iii)

Payment made to creditor Rs 17,500 in full settlement

 – 17,500

 

 

 

 

=

– 18,000

+

500

(Discount Received)

 

 

52,500

+

18,000

 

 

=

 

 

70,500

(iv)

Purchase of Machinery for Cash Rs 20,000

 – 20,000

 

 

 

20,000

 

 

 

 

 

 

32,500

+

18,000

+

20,000

=

 

 

70,500

(v)

Depreciation on Machinery Rs 2,000

 

 

 

 

– 2,000

 

 

 

– 2,000

(Depreciation)

 

 

32,500

+

18,000

+

18,000

=

 

 

68,500

 

 

 

 

 

 

 

 

 

 

 

 

Assets

=

 

32,500 + 18,000 + 18,000

 

=

Rs

68,500

Liabilities

=

 

NIL

Capital

=

Rs

68,500

Page No 5.19:

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

(Rs)

+

Prepaid Rent

(Rs)

+

Stock

(Rs)

 

Creditors

(Rs)

+

Salary outstanding

(Rs)

 

(Rs)

(i)

Commenced business with cash Rs 60,000

60,000

 

 

 

 

 

 

 

 

 

60,000

 

 

60,000

 

 

 

 

=

 

 

 

 

60,000

(ii)

Paid Rent in Advance Rs 500

 – 500

+

 500

 

 

 

 

 

 

 

 

 

 

59,500

+

500

 

 

=

 

 

 

 

 60,000

(iii)

Purchased goods for Cash Rs 30,000 and Credit Rs 20,000

 – 30,000

+

 

 

50,000

 

20,000

 

 

 

 

 

 

29,500

+

500

+

50,000

=

20,000

 

 

+

60, 000

(iv)

Sold goods for Cash Rs 30,000 Costing Rs 20,000

 30,000

+

 

+

– 20,000

 

 

 

 

 

10,000

(Profit)

 

 

59,500

+

500

+

30,000

=

20,000

 

 

+

70,000

(v)

Paid Salary Rs 500 and Salary Outstanding being Rs 100

– 500

 

 

 

 

=

 

 

 

 

– 500

 

 

 

 

 

 

 

 

 

 

100

 

– 100

 

 

59,000

+

500

+

30,000

=

20,000

+

100

+

69,400

(vi)

Brought motorcycle for personal use Rs 5,000

 – 5000

 

 

 

 

=

 

 

 

 

– 5000 (Drawings)

 

 

54,000

+

500

+

30,000

=

20,000

+

100

+

64,400

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Assets

=

 

54,000 + 500 + 30,000

 

=

Rs

84,500

Liabilities

=

 

20,000 + 100

 

=

Rs

20,100

Capital

=

 

64,400

 

Balance Sheet

Liabilities

Amount (Rs)

Assets

Amount (Rs)

Capital

64,400

Cash

54,000

Creditors

20,000

Prepaid Rent

500

Salary Outstanding

100

Stock

30,000

 

85,500

 

85,500

 

 

 

 

 

Page No 5.19:

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

(Rs)

+

Accrued Interest

(Rs)

=

Advance Commission

(Rs)

 

 

(Rs)

(i)

Started business with Cash Rs 60,000

60,000

 

 

=

 

 

60,000

 

 

60,000

 

 

=

 

 

60,000

(ii)

Rent Received Rs 2,000

2,000

 

 

=

 

 

2,000

(Income)

 

 

62,000

 

 

=

 

 

 62,000

(iii)

Accrued Interest Rs 500

 

 

500

=

 

 

 500

(Income)

 

 

62,000

+

500

=

 

 

62,500

(iv)

Commission received in advance Rs 1,000

1,000

 

 

=

1,000

 

 

 

 

63,000

+

500

=

1,000

+

62,500

(v)

Amount withdrawn Rs 5,000

 – 5,000

 

 

=

 

 

– 5,000

 

 

58,000

+

500

=

1,000

+

57,500

 

 

 

 

 

 

 

 

 

 

Balance Sheet

Liabilities

Amount (Rs)

Assets

Amount (Rs)

Capital

57,500

Cash

58,000

Advance Commission

1,000

Accrued Interest

500

 

58,500

 

58,500

 

 

 

 

Page No 5.19:

Question 12:

Prove that the Accounting Equation is satisfied in all the following transactions of Sameer Goel:
(i) Started business with cash ₹ 10,000.
(ii) Paid rent in advance ₹ 300.
(iii) Purchased goods for cash ₹ 5,000 and credit ₹ 2,000.
(iv) Sold goods for cash ₹ 8,000 costing ₹ 4,000.
(v)  Paid salary ₹ 450 and salary outstanding being ₹ 100.
(vi) Bought motorcycle for personal use ₹ 3,000.

Answer:

S. No.

Transactions

Assets

=

Liabilities

+

Capital

Cash

(Rs)

+

Prepaid Rent

(Rs)

+

Stock

(Rs)

=

Creditors

(Rs)

+

Outstanding Salary

(Rs)

 

 

(Rs)

(i)

Started business with Cash Rs 10,000

10,000

 

 

 

 

 

 

 

 

 

10,000

 

 

10,000

 

 

 

 

=

 

 

 

 

10,000

(ii)

Paid Rent in Advance Rs 300

 – 300

 

300

 

 

 

 

 

 

 

 

 

 

9,700

+

300

 

 

=

 

 

 

 

10,000

(iii)

Purchased goods for Cash Rs 5,000 and credit Rs 2,000

 – 5,000

+

 

+

5,000

=

2,000

 

 

 

 

 

 

 

 

 

 

2,000

=

 

 

 

 

 

 

 

4,700

+

300

+

7,000

=

2,000

 

 

+

10, 000

(iv)

Sold goods for Cash Rs 8,000 Costing Rs 4,000

 8,000

 

 

 

– 4,000

 

 

 

 

 

4,000

(Profit)

 

 

12,700

+

300

+

3,000

=

2,000

 

 

+

14,000

(v)

Paid Salary Rs 450 and Salary outstanding being Rs 100

 – 450

 

 

 

 

=

 

 

 

 

– 450

(Expense)

 

 

 

 

 

 

 

 

 

 

100

 

– 100

(Expense)

 

 

12,250

+

300

+

3,000

=

2,000

+

100

+

13,450

(vi)

Brought motorcycle for personal use Rs 3,000

 – 3,000

 

 

 

 

=

 

 

 

 

– 3,000

(Drawings)

 

 

9,250

+

300

+

3,000

=

2,000

+

100

+

10,450

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Assets

=

 

9,250 + 300 + 3,000

 

=

Rs

12,550

Liabilities

=

 

2,000 + 100

 

=

Rs

2,100

Capital

=

 

10,450



Page No 5.20:

Question 13:

Show the Accounting Equation on the basis of the following transactions and present a Balance Sheet on the last new equation balance:

   
(i) Raj commenced business with cash  70,000
(ii)  Purchased goods on credit 14,000
(iii) Withdrew for Private use 1,700
(iv) Goods purchased for cash 10,000
(v) Paid wages 300
(vi)
(vii)
(viii)
(ix)
Paid to creditors
Sold goods on credit for
Sold goods for cash (cost price was Purchased motorcycle for cash ₹ 3,000)
Purchased furniture for 

 
10,000
15,000
4,000

​500

Answer:

 

S. No.

Transactions

Assets

=

Liabilities

+

Capital

Cash

(Rs)

+

Stock

(Rs)

+

Furniture

(Rs)

+

Debtors

(Rs)

 

Creditors

(Rs)

 

 

(Rs)

(i)

Raj Commenced business

70,000

 

 

 

 

 

 

=

 

 

70,000

 

 

70,000

 

 

 

 

 

 

=

 

 

70,000

(ii)

Purchased goods on credit

 

 

14,000

 

 

 

 

=

14,000

 

 

 

 

70,000

+

14,000

 

 

 

 

=

14,000

 

70,000

(iii)

Withdraw for Private use

 – 1,700

 

 

 

 

 

 

=

 

 

– 1,700

(Drawings)

 

 

68,300

+

14,000

 

 

 

 

=

14,000

+

68,300

(iv)

Goods purchased for Cash

 – 10,000

+

10,000

 

 

 

 

 

 

 

 

 

 

58,300

+

24,000

 

 

 

 

=

14,000

+

68,300

(v)

Paid Wages

 – 300

 

 

 

 

 

 

=

 

 

– 300

(Expense)

 

 

58,000

+

24,000

 

 

 

 

=

14,000

+

68,000

(vi)

Paid to Creditors

 – 10,000

 

 

 

 

 

 

=

– 10,000

 

 

 

 

48,000

+

24,000

 

 

 

 

=

4,000

+

68,000

(vii)

Sold goods on credit

 

 

– 15,000

+

 

 

15,000

=

 

 

 

 

 

48,000

+

9,000

+

 

 

15,000

=

4,000

+

68,000

(viii)

Sold goods for cash (costing Rs 3,000)

4,000

 

– 3,000

 

 

 

 

 

 

 

1,000

(Profit)

 

 

52,000

+

6,000

+

 

 

15,000

=

4,000

+

69,000

(ix)

Purchased Furniture

 – 500

 

 

 

500

 

 

 

 

 

 

 

 

51,500

+

6,000

+

500

+

15,000

=

4,000

+

69,000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance Sheet

Liabilities

Amount (Rs)

Assets

Amount (Rs)

Capital

69,000

Cash

51,500

Creditors

4,000

Stock

6,000

 

 

Furniture

500

 

 

Debtors

15,000

 

73,000

 

73,000

 

 

 

 

Page No 5.20:

Question 14:

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

(Rs)

+

Bank

(Rs)

+

Stock

(Rs)

+

Furniture

(Rs)

+

Motor Cycle

(Rs)

=

Creditors

(Rs)

+

Outstanding Rent

(Rs)

 

 

(Rs)

(i)

Commenced business with cash Rs 50,000

50,000

 

 

 

 

 

 

 

 

 

 

 

 

 

50,000

 

 

50,000

 

 

 

 

 

 

 

 

=

 

 

 

 

50,000

(ii)

Paid in to bank Rs 10,000

 – 10,000

+

10,000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

40,000

+

10,000

 

 

 

 

 

 

=

 

 

 

 

50,000

(iii)

 Purchased goods for Cash Rs 20,000 and Credit Rs 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 Rs 40,000 Costing Rs 30,000

40,000

 

 

 

– 30,000

 

 

 

 

=

 

 

 

 

10,000

(Expense)

 

 

60,000

+

10,000

+

20,000

 

 

 

 

=

30,000

 

 

+

60,000

(v)

Rent paid Rs 500

 – 500

 

 

 

 

 

 

 

 

=

 

 

 

 

– 500

(Expense)

 

 

59,500

+

10,000

+

20,000

 

 

 

 

=

30,000

 

 

+

59,500

(vi)

Rent Outstanding Rs 100

 

 

 

 

 

 

 

 

 

 

 

 

100

+

– 100

(Expense)

 

 

59,500

+

10,000

+

20,000

 

 

 

 

=

30,000

+

100

+

59,400

(vii)

Bought furniture Rs 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 Rs 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 (Rs)

Assets

Amount (Rs)

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

 

 

 

 

Page No 5.20:

Question 15:

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

(Rs)

+

Stock

(Rs)

 

Creditors

(Rs)

+

Outstanding

Rent 

(Rs)

 

 

(Rs)

(i)

Started business with cash Rs 50,000 and goods Rs 30,000

50,000

+

30,000

 

 

 

 

 

80,000

 

 

50,000

+

30,000

=

 

 

 

 

80,000

(ii)

Purchased goods for cash Rs 30,000 and on credit from Karan Rs 20,000

 – 30,000

 

30,000

 

 

 

 

 

 

 

 

 

 

20,000

 

20,000

 

 

 

 

 

 

20,000

+

80,000

=

20,000

 

 

+

80,000

(iii)

Goods costing Rs 40,000 were sold for Rs 55,000

55,000

 

 - 40,000

 

 

 

 

 

15,000

(Profit)

 

 

75,000

+

40,000

=

20,000

 

 

+

95,000

(iv)

Withdrew cash for personal use Rs 10,000

 – 10,000

 

 

 

 

 

 

 

– 10,000

(Drawings)

 

 

65,000

+

40,000

=

20,000

 

 

+

85,000

(v)

Rent outstanding Rs 2,000

 

 

 

 

 

 

2,000

 

– 2,000

(Expenses)

 

 

65,000

+

40,000

=

20,000

+

2,000

+

83,000

 

 

 

 

 

 

 

 

 

 

 

Page No 5.20:

Question 16:

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 to Gupta for ₹ 10,000 and received a Bill Receivable for the same amount for 3 months.
(vii) Received ₹ 10,000 from Gupta against the Bills Receivable on its maturity.

Answer:

 

Transactions

Assets

=

Liabilities

+

Capital

Cash

(Rs)

+ Bank
(Rs)

+

Stock

(Rs)

+

Machinery

(Rs)

+

Furniture

(Rs)

+

Debtors

(Rs)

+

Bills Receivable

(Rs)

 

 

 

 

(Rs)

(1)

Started Business with Cash of Rs 50,000 and Bank of Rs 1,00,000

50,000

+ 1,00,000

 

 

 

 

 

 

 

 

 

 

 

 

 

1,50,000

 

Stock Rs 60,000

 

   

 

60,000

 

 

 

 

 

 

 

 

 

 

 

60,000

 

Machinery Rs 1,00,000

 

   

 

 

 

1,00,000

 

 

 

 

 

 

 

 

 

1,00,000

 

Furniture Rs 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 to Gupta for Rs 10,000 and received a Bill Receivable for the same amount.

 

   

 

(10,000)

 

 

 

 

 

 

 

10,000

 

 

 

 

 

 

51,000

+ 1,00,000

+

30,000

+

90,000

+

50,000

+

11,000

+

10,000

=

 

 

3,42,000

(vii)

Received Rs 10,000 from Gupta against the Bill Receivable on its maturity.

10,000

   

 

 

 

 

 

 

 

 

 

(10,000)

 

 

 

 

 

 

61,000

+ 1,00,000

+

30,000

+

90,000

+

50,000

+

11,000

+

NIL

=

NIL

+

3,42,000

 

 

 

   

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 



Page No 5.21:

Question 17:

Prepare Accounting Equation from the following:
(a) Started business with cash ₹ 1,00,000.
(b) Purchased goods for cash ₹ 20,000 and on credit ₹ 30,000.
(c) Sold goods for cash costing ₹ 10,000 and on credit costing ₹ 15,000 both at a profit of 20% .
(d) Paid salaries ₹ 8,000.

Answer:

S. No.

Transactions

Assets

=

Liabilities

+

Capital

Cash

(Rs)

+

Stock

(Rs)

+

Debtors

(Rs)

 

Creditors

(Rs)

 

 

(Rs)

(i)

Started business with cash

1,00,000

 

 

 

 

 

 

 

1,00,000

 

 

1,00,000

 

 

 

 

=

 

 

1,00,000

(ii)

Purchased goods for Cash Rs 20,000 and on credit Rs 30,000

– 20,000

+

50,000

 

 

=

30,000

 

 

 

 

80,000

+

50,000

 

 

=

30,000

+

1,00,000

(iii)

Sold goods for cash costing Rs 10,000 and on credit costing Rs 15,000 both at profit of 20%

12,000

+

– 25,000

+

18,000

 

 

 

5,000

(Profit)

 

 

92,000

+

25,000

+

18,000

=

30,000

+

1,05,000

(iv)

Paid Salaries Rs 8,000

– 8,000

 

 

 

 

 

 

 

– 8,000

(Expenses)

 

 

84,000

+

25,000

+

18,000

=

30,000

+

97,000

 

 

 

 

 

 

 

 

 

 

 

 

Assets

=

 

84,000 + 25,000 + 18,000

 

=

Rs

1,27,000

Liabilities

=

Rs

30,000

Capital

=

Rs

97,000

 

Page No 5.21:

Question 18:

Show the accounting equation on the basis of following transactions:
(a) Ram started business with ₹ 25,000.
(b) Purchased goods from Shyam ₹ 10,000.
(c) Sold goods to Sohan costing ₹ 1,500 for ₹ 1,800. 

Answer:

S. No.

Transaction

Assets

=

Liabilities

+

Capital

Cash

+

Stock

+

Debtors

=

Creditors

 

 

(i)

Ram Started Business with Cash

25,000

 

 

 

 

 

 

+

25,000

 

 

 

 

 

 

 

 

 

 

 

(ii)

Purchased Goods from Shyam