MENU
Question -

Show the accounting equation on the basis of the following transaction:

(a)

Udit started business with:

Rs

 

(i)

Cash

5,00,000

 

(ii)

Goods

1,00,000

(b)

Purchased building for cash

2,00,000

(c)

Purchased goods from Himani

 50,000

(d)

Sold goods to Ashu (Cost Rs 25,000)

 36,000

(e)

Paid insurance premium

 3,000

(f)

Rent outstanding

 5,000

(g)

Depreciation on building

 8,000

(h)

Cash withdrawn for personal use

 20,000

(i)

Rent received in advance

 5,000

(j)

Cash paid to Himani on account

 20,000

(k)

Cash received from Ashu

 30,000



Answer -

S.No.

Explanation

Assets

=

Liabilities

+

Capital

Cash

+

Stock

+

Building

+

Debtors

 

Creditors

+

Outstanding Expenses

+

Unaccrued Income

 

 

(a)

Increase in cash

5,00,000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Increase in stock

 

 

1,00,000

 

 

 

 

 

 

 

 

 

 

 

 

 

Increase in capital

 

 

 

 

 

 

 

 

 

 

 

 

 

 

6,00,000

 

 

5,00,000

+

1,00,000

 

 

 

 

=

NIL

 

 

 

 

+

6,00,000

(b)

Increase in building

 

 

 

 

2,00,000

 

 

 

 

 

 

 

 

 

 

 

Decrease in cash

(2,00,000)

 

 

 

 

 

 

 

=

 

 

 

 

 

 

 

 

 

3,00,000

+

1,00,000

+

2,00,000

 

 

=

NIL

 

 

 

 

+

6,00,000

(c)

Increase in stock

 

 

50,000

 

 

 

 

 

 

 

 

 

 

 

 

 

Increase in creditors

 

 

 

 

 

 

 

=

50,000

 

 

 

 

 

 

 

 

3,00,000

+

1,50,000 

+

2,00,000

 

 

=

50,000

 

 

 

 

+

6,00,000

(d)

Increase in debtors

 

 

 

 

 

 

 36,000

 

 

 

 

 

 

 

 

 

Decrease in stock

 

 

(25,000)

 

 

 

 

 

 

 

 

 

 

 

 

 

Increase in capital (Profit)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

11,000

 

 

3,00,000

+

1,25,000

+

2,00,000

+

 36,000

=

50,000

 

 

 

 

+

6,11,000

(e)

Decrease in cash

(3,000)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Decrease in capital (Expense)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(3,000)

 

 

2,97,000

+

1,25,000

+

2,00,000

+

36,000

=

50,000

+

 

 

 

+

6,08,000

(f)

Decrease in capital (Expense)

 

 

 

 

 

 

 

 

 

 

5,000

 

 

 

 

 

Increase in liabilities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(5,000)

 

 

2,97,000

+

1,25,000

+

2,00,000

+

36,000

=

50,000

+

5,000

 

 

+

6,03,000

(g)

Decrease in building

 

 

 

 

(8,000)

 

 

 

 

 

 

 

 

 

 

 

Decrease in capital

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(8,000)

 

 

2,97,000

+

1,25,000

+

1,92,000

+

36,000

=

50,000

+

5,000

 

 

+

5,95,000

(h)

Decrease in cash

(20,000)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Decrease in capital

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(20,000)

 

 

2,97,000

+

1,25,000

+

1,92,000

+

36,000

=

50,000

+

5,000

 

 

+

5,75,000

(i)

Increase in cash

5,000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Increase in liability

 

 

 

 

 

 

 

 

 

 

 

 

5,000

 

 

 

 

2,82,000

+

1,25,000

+

1,92,000

+

36,000

=

50,000

+

5,000

+

5,000

+

5,75,000

(j)

Decrease in creditors

 

 

 

 

 

 

 

 

(20,000)

 

 

 

 

 

 

 

Decrease in cash

(20,000)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2,62,000

+

1,25,000

+

1,92,000

+

36,000

=

30,000

+

5,000

+

5,000

+

5,75,000

(k)

Increase in cash

30,000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Decrease in debtors

 

 

 

 

 

 

(30,000)

 

 

 

 

 

 

 

 

 

 

2,92,000

+

1,25,000

+

1,92,000

+

6,000

=

30,000

+

5,000

+

5,000

+

5,75,000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Comment(S)

Show all Coment

Leave a Comment

Free - Previous Years Question Papers
Any questions? Ask us!
×