Introduction to Accounting | Assignment 2 | Accounting Equation | Dr.
GK
1. Prepare the Accounting Equation from the following transactions:
a) Sachin started business and introduced capital ₹1,00,000 in cash.
b) Purchased goods in cash ₹50,000
c) Purchased furniture from M/s. Samrat Furniture ₹20,000.
d) Sold goods costing ₹25,000 for ₹35,000 against cash.
e) Paid M/s. Samrat Furniture in cash.
2. Prepare the Accounting Equation on the basis of the following:
a) Started business with cash ₹70,000.
b) Credit purchases of goods ₹18,000.
c) Payment made to creditors in full settlement ₹17,500.
d) Purchase of machinery for cash ₹20,000.
3. Prepare the Accounting Equation on the basis of the following:
₹
Rakesh Commenced business with cash 1,50,000
Furniture purchased for cash 20,000
Purchased goods from Mahesh on credit 25,000
Sold goods (costing ₹10,000)to Mohan for cash 14,000
Additional capital introduced 20,000
Commission received in advance 2,000
Paid to creditor (Mahesh) in full settlement 22,500
Sold goods (costing ₹15,000)for ₹18,000 out of which ₹5,000
received in cash
Depreciation on furniture provided @10%
4. Present the following transactions in the Accounting Equation:
# ₹ # ₹
1 Ram started business with cash 2 Purchased goods on credit 4,000
₹ 25,000 and cheque of ₹
25,000 to open a bank account.
3 Purchased goods for cash 1,000 4 Purchases furniture for cash 500
5 Withdraw cash for personal use 700 6 Paid Rent 200
from bank
7 Received interest from bank 100 8 Sold goods on credit (₹ 500) 700
9 Paid to creditors 400 10 Paid petty expenses 200
5. How are the following items dealt in Accounting Equation?
a) Interest due but not received ₹500
b) Rent received in advance ₹1,000
c) Insurance premium paid in advance ₹1,500
d) Salaries due but not paid ₹2,000
6. Anil had the following transactions:
a) Commenced business with cash ₹50,000.
b) Purchased goods for cash ₹20,000 and credit ₹30,000
c) Sold goods for cash ₹40,000, costing ₹30,000.
d) Rent paid ₹500,Salaries ₹5,000.
e) Rent outstanding ₹100,Salaries outstanding ₹1,000.
f) Bought Furniture for ₹5,000 on credit.
g) Bought refrigerator for personal use ₹5,000
h) Purchased computer for cash ₹20,000
i) Cash withdrawn for personal use ₹10,000.
j) Interest on drawings charged ₹500 and the interest on Capital ₹1,000.
Use Accounting Equation to show the effect of the above transactions on his assets,liabilities
and capital and also show his balance sheet.
7. Prepare the Accounting Equation of the following transactions and also the Balance Sheet:
₹
Manu started business with cash 1,00,000
Opened a Bank Account for the business and transferred ₹ 4,00,000
from his salary account
Purchase a building from Sohan for ₹ 12,00,000 paid by taking a loan 10,00,000
from SBI
Paid interest on loan ₹ 20,000 and instalment of ₹ 1,00,000
Purchase goods from Rohan on credit 1,00,000
Goods returned to Rohan costing 20,000
Sold goods costing ₹ 40,000 for ₹ 50,000 on credit to Ram
Took good from business for personal use 10,000
Accrued interest 5,000
Commission received in advance 20,000
Cash received from Ram 10,000
8. From the following information, calculate the total assets of the business:
Capital ₹ 4,00,000; Creditors ₹ 3,00,000; Revenue earned during the period ₹ 7,50,000;
Expenses incurred during the period ₹₹ 2,00,000; Value of unsold stock ₹ 2,00,000.
