Prove that the Accounting Equation is satisfied in all the following transactions of Suresh. Also prepare a Balance Sheet.
(i) Commenced business with cash ₹ 60,000.
(ii) Paid rent in advance ₹ 500.
(iii) Purchased goods for cash ₹ 30,000 and credit ₹ 20,000.
(iv) Sold goods for cash ₹ 30,000 costing ₹ 20,000.
(v) Paid salary ₹ 500 and salary outstanding being ₹ 100.
(vi) Bought motorcycle for personal use ₹ 5,000.
(i) Commenced business with cash ₹ 60,000.
(ii) Paid rent in advance ₹ 500.
(iii) Purchased goods for cash ₹ 30,000 and credit ₹ 20,000.
(iv) Sold goods for cash ₹ 30,000 costing ₹ 20,000.
(v) Paid salary ₹ 500 and salary outstanding being ₹ 100.
(vi) Bought motorcycle for personal use ₹ 5,000.
S. No.
Transactions
Assets
=
Liabilities
+
Capital
Cash
(Rs)
+
Prepaid Rent
(Rs)
+
Stock
(Rs)
Creditors
(Rs)
+
Salary outstanding
(Rs)
(Rs)
(i)
Commenced business with cash Rs 60,000
60,000
60,000
60,000
=
60,000
(ii)
Paid Rent in Advance Rs 500
– 500
+
500
59,500
+
500
=
60,000
(iii)
Purchased goods for Cash Rs 30,000 and Credit Rs 20,000
– 30,000
+
50,000
20,000
29,500
+
500
+
50,000
=
20,000
+
60, 000
(iv)
Sold goods for Cash Rs 30,000 Costing Rs 20,000
30,000
+
+
– 20,000
10,000
(Profit)
59,500
+
500
+
30,000
=
20,000
+
70,000
(v)
Paid Salary Rs 500 and Salary Outstanding being Rs 100
– 500
=
– 500
100
– 100
59,000
+
500
+
30,000
=
20,000
+
100
+
69,400
(vi)
Brought motorcycle for personal use Rs 5,000
– 5000
=
– 5000 (Drawings)
54,000
+
500
+
30,000
=
20,000
+
100
+
64,400
Assets
=
54,000 + 500 + 30,000
=
Rs
84,500
Liabilities
=
20,000 + 100
=
Rs
20,100
Capital
=
64,400
Balance Sheet
Liabilities
Amount (Rs)
Assets
Amount (Rs)
Capital
64,400
Cash
54,000
Creditors
20,000
Prepaid Rent
500
Salary Outstanding
100
Stock
30,000
85,500
85,500
|
S. No. |
Transactions |
Assets |
= |
Liabilities |
+ |
Capital |
||||||
|
Cash (Rs) |
+ |
Prepaid Rent (Rs) |
+ |
Stock (Rs) |
|
Creditors (Rs) |
+ |
Salary outstanding (Rs) |
|
(Rs) |
||
|
(i) |
Commenced business with cash Rs 60,000 |
60,000 |
|
|
|
|
|
|
|
|
|
60,000 |
|
|
|
60,000 |
|
|
|
|
= |
|
|
|
|
60,000 |
|
(ii) |
Paid Rent in Advance Rs 500 |
– 500 |
+ |
500 |
|
|
|
|
|
|
|
|
|
|
|
59,500 |
+ |
500 |
|
|
= |
|
|
|
|
60,000 |
|
(iii) |
Purchased goods for Cash Rs 30,000 and Credit Rs 20,000 |
– 30,000 |
+ |
|
|
50,000 |
|
20,000 |
|
|
|
|
|
|
|
29,500 |
+ |
500 |
+ |
50,000 |
= |
20,000 |
|
|
+ |
60, 000 |
|
(iv) |
Sold goods for Cash Rs 30,000 Costing Rs 20,000 |
30,000 |
+ |
|
+ |
– 20,000 |
|
|
|
|
|
10,000 (Profit) |
|
|
|
59,500 |
+ |
500 |
+ |
30,000 |
= |
20,000 |
|
|
+ |
70,000 |
|
(v) |
Paid Salary Rs 500 and Salary Outstanding being Rs 100 |
– 500 |
|
|
|
|
= |
|
|
|
|
– 500 |
|
|
|
|
|
|
|
|
|
|
|
100 |
|
– 100 |
|
|
|
59,000 |
+ |
500 |
+ |
30,000 |
= |
20,000 |
+ |
100 |
+ |
69,400 |
|
(vi) |
Brought motorcycle for personal use Rs 5,000 |
– 5000 |
|
|
|
|
= |
|
|
|
|
– 5000 (Drawings) |
|
|
|
54,000 |
+ |
500 |
+ |
30,000 |
= |
20,000 |
+ |
100 |
+ |
64,400 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Assets |
= |
|
54,000 + 500 + 30,000 |
|
|
= |
Rs |
84,500 |
|
Liabilities |
= |
|
20,000 + 100 |
|
|
= |
Rs |
20,100 |
|
Capital |
= |
|
64,400 |
|
Balance Sheet |
|||
|
Liabilities |
Amount (Rs) |
Assets |
Amount (Rs) |
|
Capital |
64,400 |
Cash |
54,000 |
|
Creditors |
20,000 |
Prepaid Rent |
500 |
|
Salary Outstanding |
100 |
Stock |
30,000 |
|
|
85,500 |
|
85,500 |
|
|
|
|
|
