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Question 9: New

Prepare Accounting Equation from the following:
` 1,20,000.
(b) Purchased goods for cash  ` 10,000.

(d) Salary outstanding `2,000.

(e) Sold goods for cash (costing  ` 5,000) ` 7,000.
(f) Goods destroyed by fire
`500.

 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.

 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:
` 60,000.
(iii) Accrued interest  ` 500.
(v) Amount withdrawn  ` 5,000.

 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:
`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.