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#### Question 1:

What will be effect of the following on the Accounting Equation?
(i) Started business with cash â‚¹ 45,000
(ii) Opened a Bank Account with a deposit of â‚¹ 4,500
(iii) Bought goods from M\s. Sun & Co. for â‚¹ 11,200

 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

#### Question 2:

Show the Accounting Equation for the following transactions:

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

 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

#### Question 3:

Show the effect of the following transactions on the Accounting Equation:
(i) Started business with cash â‚¹ 50,000.
(ii) Salaries paid  â‚¹ 2,000.
(iii) Wages Outstanding â‚¹ 200.
(iv) Interest due but not paid â‚¹ 100.
(v) Rent paid in advance â‚¹ 150.

 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

#### Question 4:

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

 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

#### Question 5:

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

 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

#### Question 6:

Prepare an Accounting Equation and Balance Sheet on the following basis:
(i) Ajeet started business with cash â‚¹ 20,000.
(ii) He purchased furniture for â‚¹ 2,000.
(iii) He paid rent of â‚¹ 200.
(iv) He purchase goods on credit â‚¹ 3,000.
(v) He sold goods (cost price â‚¹ 2,000) for â‚¹ 5,000 on cash.

 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

#### Question 7:

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

 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

#### Question 8:

Develop an Accounting Equation from the following transactions:

 â‚¹ (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 â‚¹ 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

 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

#### Question 9:

Prepare an Accounting Equation on the basis of the following transactions:
(i) Started business with cash â‚¹ 70,000.
(ii) Credit purchase of goods â‚¹ 18,000.
(iii) Payment made to creditors in full settlement â‚¹ 17,500.
(iv) Purchase of machinery for cash â‚¹ 20,000.
(v) Depreciation on machinery â‚¹ 2,000.

 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

#### 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 â‚¹ 60,000.
(ii) Paid rent in advance â‚¹ 500.
(iii) Purchased goods for cash â‚¹ 30,000 and credit â‚¹ 20,000.
(iv) Sold goods for cash â‚¹ 30,000 costing â‚¹ 20,000.
(v) Paid salary â‚¹ 500 and salary outstanding being â‚¹ 100.
(vi) Bought motorcycle for personal use â‚¹ 5,000.

 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

#### Question 11:

Show the effect of the following transactions and also prepare a Balance Sheet:
(i) Started business with cash â‚¹ 60,000.
(iii) Accrued interest â‚¹ 500.
(v) Amount withdrawn â‚¹ 5,000.

 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

#### Question 12:

Prove that the Accounting Equation is satisfied in all the following transactions of Sameer Goel:
(i) Started business with cash â‚¹ 10,000.
(ii) Paid rent in advance â‚¹ 300.
(iii) Purchased goods for cash â‚¹ 5,000 and credit â‚¹ 2,000.
(iv) Sold goods for cash â‚¹ 8,000 costing â‚¹ 4,000.
(v)  Paid salary â‚¹ 450 and salary outstanding being â‚¹ 100.
(vi) Bought motorcycle for personal use â‚¹ 3,000.

 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

#### Question 13:

Raghunath had the following transactions in an accounting year:
(i) Commenced business with cash â‚¹ 50,000.
(ii) Paid into bank â‚¹ 10,000.
(iii) Purchased goods for cash â‚¹ 20,000 and credit â‚¹ 30,000.
(iv) Sold goods for cash â‚¹ 40,000 costing â‚¹ 30,000.
(v) Rent paid â‚¹ 500.
(vi) Rent outstanding â‚¹ 100.
(vii) Bought furniture â‚¹ 5,000 on credit.
(viii) Bought refrigerator for personal use â‚¹ 5,000.
(ix) Purchased motorcycle for cash â‚¹ 20,000.
Create an Accounting Equation to show the effect of the above and also show his Balance Sheet.

 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

#### Question 14:

Prepare an Accounting Equation from the following:
(i) Started business with cash â‚¹ 50,000 and goods â‚¹ 30,000.
(ii) Purchased goods for cash â‚¹ 30,000 and on credit from Karan â‚¹ 20,000.
(iii) Goods costing â‚¹ 40,000 were sold for â‚¹ 55,000.
(iv) Withdrew cash for personal use â‚¹ 10,000.
(v) Rent outstanding â‚¹ 2,000.

 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

#### Question 15:

Show an Accounting Equation for the following transactions:
(i) D. Mahapatra commenced business with cash â‚¹ 50,000 and â‚¹ 1,00,000 by cheque; goods â‚¹ 60,000; machinery â‚¹ 1,00,000 and furniture â‚¹ 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 â‚¹ 10,000.
(v) Interest on drawings charged @ 5%.
(vi) Goods Sold to Gupta for â‚¹ 10,000 and received a Bill Receivable for the same amount for 3 months.
(vii) Received â‚¹ 10,000 from Gupta against the Bills Receivable on its maturity.

 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

#### Question 16:

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

 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

#### Question 17:

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

 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 + 10,000 10,000 New A/c Equation 25,000 + 10,000 = 10,000 + 25,000 (iii) Sold Goods to Sohan costing Rs.1,500 for Rs.1,800 (-)1,500 + 1,800 + 300 (Profit) 25,000 + 8,500 + 1,800 = 10,000 + 25,300

#### Question 18:

If the capital of a business is â‚¹ 3,00,000 and liabilities are â‚¹ 50,000, loss â‚¹ 70,000, calculate the total assets of the business.

 Total Assets = Capital – Loss + Liabilities = 3,00,000 – 70,000 + 50,000 = Rs 2,80,000

#### Question 19:

If total assets of a business are â‚¹ 1,30,000 and net worth is â‚¹ 80,000, calculate the creditors.

 Creditors = Total Assets – Net worth = 1,30,000 – 80,000 = Rs 50,000

#### Question 20:

A commenced his cloth business on 1st April, 2018 with a capital of â‚¹ 30,000. On 31st March 2019, his assets were worth â‚¹ 50,000 and liabilities of â‚¹ 10,000. Find out his closing capital and profits earned during the year.

 Closing Capital = Assets – Liabilities = 50,000 – 10,000 = Rs 40,000

 Profit = Closing Capital – Opening Capital = 40,000 – 30,000 = Rs 10,000

#### Question 21:

If capital of a business is â‚¹ 1,40,000 and liabilities are of â‚¹ 80,000, calculate the total assets of the business.

 Total Assets = Liabilities + Capital = 80,000 + 1,40,000 = Rs 2,20,000

#### Question 22:

Calculate the total assets if:
(i) Capital is â‚¹ 40,000.
(ii) Creditors are â‚¹ 25,000.
(iii) Revenue during the period is â‚¹ 50,000.
(iv) Expenses during the period are â‚¹ 40,000.

 Capital after Adjustment of revenue and expenses = Capital + Revenue – Expenses = 40,000 + 50,000 – 40,000 = Rs 50,000

 Total Asset = Capital after adjustment + Creditors = 50,000 + 25,000 = Rs 75,000

#### Question 23:

(a) A had a capital of â‚¹ 75,000 on 1st April, 2018. He had also goods amounting to â‚¹ 15,000 which he had purchased on credit and the payment had not been made. Find out the value of the total assets of the business.

(b ) After a period of one month, he came to know that he had suffered a loss of â‚¹ 1,700. He withdrew â‚¹ 800 for his personal use. Find out his capital and assets of the business.

 (a) Total Assets = Capital + Creditors for purchase of Goods = 75,000 + 15,000 = Rs 90,000 (b) Capital at the end = Capital − Loss − Drawings = 75,000 − 1,700 − 800 = Rs 72,500 Assets = Capital at the end + Creditors for purchase of Goods = 72,500 + 15,000 = Rs 87,500

#### Question 24:

(a) Mohan started a business on 1st April, 2018 with a capital of â‚¹ 10,000 and borrowed â‚¹ 3,000 from a friend. He earned a profit of â‚¹ 5,000 during the year ended 31st March, 2019 and withdrew cash â‚¹ 4,000 for personal use. What is his capital on 31st March, 2019?

(b) Mahesh started a business with a capital of â‚¹ 15,000 on 1st April, 2018. During the year, he made a profit of â‚¹ 3,000. He owes â‚¹ 2,500 to suppliers of goods. What is the total of assets in his business on 31st March, 2019?

(a) Capital on March 31, 2019 = Capital on April 01, 2018 + Profit − Drawings

= 10,000 + 5,000 − 4,000 = Rs 11,000

(b) Total Assets on March 31, 2019 =  Capital on April 01, 2018 + Profit + Creditors

= 15,000 + 3,000 + 2,500 = Rs 20,500

#### Question 25:

Mohan started a business on 1st April, 2018 with a capital of â‚¹ 25,000 and a loan of â‚¹ 12,500 borrowed from Shyam. During 2018-19 he had introduced additional capital of  â‚¹ 12,500 and had withdrawn â‚¹ 7,500 for personal use. On 31st March, 2019 his assets were â‚¹ 75,000. Find out his capital as on 31st March, 2019 and profit made or loss incurred during the year 2018-19.

Capital on March 31, 2019 = Assets − Loan from Shyam

= 75,000 − 12,500 = Rs 62,500

Profit (or Loss) during the year 2018-19 = Capital on March 31, 2019+ Drawings − (Additional Capital + Capital on April 01, 2018)

= 62,500 + 7,500 − (12,500 + 25,000)

= 70,000 − 37,500 = Rs 32,500

#### Question 26:

On 31st March, 2019, the total assets and external liabilities were â‚¹ 2,00,000 and â‚¹ 6,000 respectively. During the year, the proprietor had introduced capital of â‚¹ 20,000 and withdrawn â‚¹ 12,000 for personal use. He made a profit of â‚¹ 20,000 during the year. Calculate the capital as on 1st April, 2018.

Capital as on March 31, 2019 = Total Assets − External Liabilities

=  2,00,000 − 6,000 = Rs 1,94,000

Capital on April 01, 2018 = Capital on March 31,2019 − Additional Capital + Drawings − Profit

= 1,94,000 − 20,000 + 12,000 − 20,000 = Rs 1,66,000

#### Question 27:

Show an Accounting Equation on the basis of the following transactions:

 â‚¹ (i) Sunil started business with cash 1,50,000 (ii) Opened a Bank Account by depositing â‚¹ 25,000 out of cash (iii) He sold his personal car for â‚¹ 50,000 and deposited the amount in the firm's Bank Account (iv) He purchased a building and furniture for 1,00,000 (v) He purchased goods from Ram on credit 50,000 (vi) He paid cartage 500 (vii) He sold to Shyam on credit goods costing â‚¹ 6,000 for 9,000 (viii) Received rent from tenants 1,000 (ix) Received security deposit from tenants 1,500 (x) Purchased stationery for cash 100 (xi) Invested in shares (personal) 50,000 (xii) Received interest in cash 200 (xiii) Introduced fresh capital 25,000 (xiv) Goods destroyed by fire 500