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# <!-- /* Font Definitions */ @font-face {font-family:Mangal; panose-1:0 0 4 0 0 0 0 0 0 0;} @font-face {font-family:"Cambria Math"; panose-1:2 4 5 3 5 4 6 3 2 4;} @font-face {font-family:Calibri; panose-1:2 15 5 2 2 2 4 3 2 4;} /* Style Definitions */ p.MsoNormal, li.MsoNormal, div.MsoNormal {margin:0in; margin-bottom:.0001pt; font-size:12.0pt; font-family:"Times New Roman","serif";} .MsoPapDefault {margin-bottom:10.0pt; line-height:115&#37;;} @page Section1 {size:8.5in 11.0in; margin:1.0in 1.0in 1.0in 1.0in;} div.Section1 {page:Section1;} --> Transactions of M/s. Vipin Traders are given below. Show the effects on Assets, Liabilities and Capital with the help of accounting Equation. Rs (a) Business started with cash 1,25,000 (b) Purchased goods for cash 50,000 (c) Purchase furniture from R.K. Furniture 10,000 (d) Sold goods to Parul Traders (costing Rs 7,000 vide bill no. 5674) 9,000 (e) Paid cartage 100 (f) Cash Paid to R.K. furniture in full settlement 9,700 (g) Cash sales (costing Rs 10,000) 12,000 (h) Rent received 4,000 (i) Cash withdrew for personal use 3,000

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Solution

## S.No. Explanation Assets = Liabilities + Capital Cash + Stock + Furniture + Debtors Creditors (a) Increase in cash 1,25,000 Increase in capital 1,25,000 1,25,000 + = NIL + 1,25,000 (b) Increase in stock 50,000 Decrease in cash (50,000) = 75,000 + 50,000 = NIL + 1,25,000 (c) Increase in furniture 10,000 = Increase in creditors = 10,000 75,000 + 50,000 + 10,000 = 10,000 + 1,25,000 (d) Increase in debtors 9,000 Decrease in stock (7,000) Increase in capital (Profit) 2,000 75,000 + 43,000 + 10,000 + 9,000 = 10,000 + 1,27,000 (e) Decrease in capital (Cartage Expenses) (100) Decrease in cash (100) 74,900 + 43,000 + 10,000 + 9,000 = 10,000 + 1,26,900 (f) Decrease in creditors = (10,000) Decrease in cash (9,700) Increase in capital (Discount-received) 300 65,200 + 43,000 + 10,000 + 9,000 = NIL + 1,27,200 (g) Increase in cash 12,000 Decrease in stock (10,000) Increase in capital (Profit) 2,000 77,200 + 33,000 + 10,000 + 9,000 = NIL + 1,29,200 (h) Increase in cash 4,000 Increase in capital (Income) 4,000 81,200 + 33,000 + 10,000 + 9,000 = NIL + 1,33,200 (i) Decrease in capital (3,000) Decrease in cash (3,000) 78,200 + 33,000 + 10,000 + 9,000 = NIL + 1,30,200

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