5
Question
Mohit has the following transactions, prepare Accounting Equation:
(₹)
(a)
Business started with cash
1,75,000
(b)
Purchased goods from Rohit
50,000
(c)
Sold goods on credit to Manish (costing ₹ 17,500)
20,000
(d)
Purchased furniture for office use
10,000
(e)
Cash paid to Rohit in full settlement
48,500
(f)
Cash received from Manish
20,000
(g)
Rent paid
1,000
(h)
Cash withdrew for personal use
3,000
|
|
(₹) |
|
| (a) | Business started with cash | 1,75,000 |
| (b) | Purchased goods from Rohit | 50,000 |
| (c) | Sold goods on credit to Manish (costing ₹ 17,500) | 20,000 |
| (d) | Purchased furniture for office use | 10,000 |
| (e) | Cash paid to Rohit in full settlement | 48,500 |
| (f) | Cash received from Manish | 20,000 |
| (g) | Rent paid | 1,000 |
| (h) | Cash withdrew for personal use |
3,000 |
Open in App
Solution
ACCOUNTING EQUATION
S. No.
Transaction
Assets
=
Liabilities
+
Capital
Cash
+
Stock
+
Debtors
Furniture
=
Creditors
(i)
Started business with cash
+1,75,000
+
1,75,000
1,75,000
=
+
1,75,000
(ii)
Purchased goods from Rohit
+50,000
+50,000
1,75,000
+
50,000
=
50,000
+
1,75,000
(iii)
Sold goods costing Rs 17,500 for Rs 20,000 to Manish
–17,500
+20,000
+2,500 (Profit)
1,75,000
+
32,500
+
20,000
=
50,000
+
1,77,500
(iv)
Purchased furniture for office use
–10,000
+10,000
1,65,000
+
32,500
+
20,000
+
10,000
=
50,000
+
1,77,500
(v)
Cash paid in full settlement to Rohit
–48,500
–50,000
+1,500 (Gain)
1,16,500
+
32,500
+
20,000
+
10,000
=
0
+
1,79,000
(vi)
Cash received from Manish
+20,000
–20,000
1,36,500
+
32,500
+
0
+
10,000
=
+
1,79,000
(vii)
Rent paid
–1,000
–1,000 (Expense)
1,35,500
+
32,500
+
+
10,000
=
+
1,78,000
(viii)
Withdrew cash for private use
–3,000
–3,000 (Drawings)
1,32,500
+
32,500
+
+
10,000
=
+
1,75,000
| ACCOUNTING EQUATION | ||||||||||||
| S. No. | Transaction | Assets | = | Liabilities | + | Capital | ||||||
| Cash | + | Stock |
+
|
Debtors | Furniture | = | Creditors | |||||
| (i) | Started business with cash | +1,75,000 | + | 1,75,000 | ||||||||
| 1,75,000 | = | + | 1,75,000 | |||||||||
| (ii) | Purchased goods from Rohit | +50,000 | +50,000 | |||||||||
| 1,75,000 | + | 50,000 | = | 50,000 | + | 1,75,000 | ||||||
| (iii) | Sold goods costing Rs 17,500 for Rs 20,000 to Manish | –17,500 | +20,000 | +2,500 (Profit) | ||||||||
| 1,75,000 | + | 32,500 | + | 20,000 | = | 50,000 | + | 1,77,500 | ||||
| (iv) | Purchased furniture for office use | –10,000 | +10,000 | |||||||||
| 1,65,000 | + | 32,500 | + | 20,000 | + | 10,000 | = | 50,000 | + | 1,77,500 | ||
| (v) | Cash paid in full settlement to Rohit | –48,500 | –50,000 | +1,500 (Gain) | ||||||||
| 1,16,500 | + | 32,500 | + | 20,000 | + | 10,000 | = | 0 | + | 1,79,000 | ||
| (vi) | Cash received from Manish | +20,000 | –20,000 | |||||||||
| 1,36,500 | + | 32,500 | + | 0 | + | 10,000 | = | + | 1,79,000 | |||
| (vii) | Rent paid | –1,000 | –1,000 (Expense) | |||||||||
| 1,35,500 | + | 32,500 | + | + | 10,000 | = | + | 1,78,000 | ||||
| (viii) | Withdrew cash for private use | –3,000 | –3,000 (Drawings) | |||||||||
| 1,32,500 | + | 32,500 | + | + | 10,000 | = | + | 1,75,000 | ||||
Suggest Corrections
24
Similar questions