# Class-11th | Chapter-2 | Accounting Equation | Question No. 11 to 15 | Ts grewal solution | 2020-21

#### Question 11:

Show the effect of the following transactions and also prepare a Balance Sheet:
(i) Started business with cash  ` 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(v) Amount withdrawn  ` 5,000.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+ 500 = 62,500 (iv) Commission received in advance  ` 1,000 1,000 = 1,000 63,000 + 500 = 1,000 + 62,500 (v) Amount withdrawn  ` 5,000 – 5,000 = – 5,000 58,000 + 500 = 1,000 + 57,500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:

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.

 S. No. Transactions Assets = Liabilities + Capital Cash ( `) + Prepaid Rent ( `) + Stock ( `) = Creditors ( `) + Outstanding Salary ( `) ( `) (i) Started business with Cash  ` 10,000 10,000 10,000 10,000 = 10,000 (ii) Paid Rent in Advance  ` 300 – 300 300 9,700 + 300 = 10,000 (iii) Purchased goods for Cash  ` 5,000 and credit  ` 2,000 – 5,000 + + 5,000 = 2,000 2,000 = 4,700 + 300 + 7,000 = 2,000 + 10, 000 (iv) Sold goods for Cash  ` 8,000 Costing  ` 4,000 8,000 – 4,000 4,000 (Profit) 12,700 + 300 + 3,000 = 2,000 + 14,000 (v) Paid Salary  ` 450 and Salary outstanding being  ` 100 – 450 = – 450 (Expense) 100 – 100 (Expense) 12,250 + 300 + 3,000 = 2,000 + 100 + 13,450 (vi) Brought motorcycle for personal use  ` 3,000 – 3,000 = – 3,000 (Drawings) 9,250 + 300 + 3,000 = 2,000 + 100 + 10,450

 Assets = 9,250 + 300 + 3,000 = ` 12,550 Liabilities = 2,000 + 100 = ` 2,100 Capital = 10,450

#### Question 13:

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.

 S. No. Transaction Assets = Liabilities + Capital Cash ( `) + Bank ( `) + Stock ( `) + Furniture ( `) + Motor Cycle ( `) = Creditors ( `) + Outstanding Rent ( `) ( `) (i) Commenced business with cash  ` 50,000 50,000 50,000 50,000 = 50,000 (ii) Paid in to bank  ` 10,000 – 10,000 + 10,000 40,000 + 10,000 = 50,000 (iii) Purchased goods for Cash  ` 20,000 and Credit  ` 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  ` 40,000 Costing  ` 30,000 40,000 – 30,000 = 10,000 (Expense) 60,000 + 10,000 + 20,000 = 30,000 + 60,000 (v) Rent paid  ` 500 – 500 = – 500 (Expense) 59,500 + 10,000 + 20,000 = 30,000 + 59,500 (vi) Rent Outstanding  ` 100 100 + – 100 (Expense) 59,500 + 10,000 + 20,000 = 30,000 + 100 + 59,400 (vii) Bought furniture  ` 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  ` 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 ( `) Assets Amount ( `) 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  ` 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.

 S. No. Transactions Assets = Liabilities + Capital Cash ( `) + Stock ( `) Creditors ( `) + Outstanding Rent  ( `) ( `) (i) Started business with cash  ` 50,000 and goods  ` 30,000 50,000 + 30,000 80,000 50,000 + 30,000 = 80,000 (ii) Purchased goods for cash  ` 30,000 and on credit from Karan  ` 20,000 – 30,000 30,000 20,000 20,000 20,000 + 80,000 = 20,000 + 80,000 (iii) Goods costing  ` 40,000 were sold for  ` 55,000 55,000 - 40,000 15,000 (Profit) 75,000 + 40,000 = 20,000 + 95,000 (iv) Withdrew cash for personal use  ` 10,000 – 10,000 – 10,000 (Drawings) 65,000 + 40,000 = 20,000 + 85,000 (v) Rent outstanding  ` 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  ` 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.

 Transactions Assets = Liabilities + Capital Cash ( `) + Bank ( `) + Stock ( `) + Machinery ( `) + Furniture ( `) + Debtors ( `) + Bills Receivable ( `) ( `) (1) Started Business with Cash of  ` 50,000 and Bank of  ` 1,00,000 50,000 + 1,00,000 1,50,000 Stock  ` 60,000 60,000 60,000 Machinery  ` 1,00,000 1,00,000 1,00,000 Furniture  ` 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  ` 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  ` 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