Prove that the accounting equation is satisfied in the following transactions:−

(₹)

(a) Brij Mohan commenced business with Cash 1,00,000

(b) Bought goods for Cash 60,000

(c) $\frac{1}{3}$ rd of the above goods sold at a profit of 20% on cost. Half the payment recieved in Cash

(d) Purchased typewritter for office use 15,000

(e) Purchased goods on Credit from X 25,000

(f) Paid to X 15,000

(g) Paid Salary 3,000

(h) Received commission 500

(i) Sold goods for Cash (Cost ₹ 50,000)
60,000

Open in App

Solution

ACCOUNTING EQUATION

S. No. Transaction Assets = Liabilities + Capital

Cash + Stock + Typewriter + Debtors = Creditors

(i) Started business with cash +1,00,000 + 1,00,000

1,00,000 = 1,00,000

(ii) Purchased goods for cash –60,000 +60,000

40,000 + 60,000 = 1,00,000

(iii) 1/3^rd of the goods sold at a profit of 20% on cost. Half payment received in cash +12,000 –20,000 +12,000 +4,000 (Profit)

52,000 + 40,000 + 12,000 = + 1,04,000

(iv) Purchased typewriter for office use –15,000 +15,000

37,000 + 40,000 + 15,000 + 12,000 = + 1,04,000

(v) Purchased goods on credit from X +25,000 +25,000

37,000 + 65,000 + 15,000 + 12,000 = 25,000 + 1,04,000

(vi) Paid to X –15,000 –15,000

22,000 + 65,000 + 15,000 + 12,000 = 10,000 + 1,04,000

(vii) Paid salary –3,000 –3,000 (Expense)

19,000 + 65,000 + 15,000 + 12,000 = 10,000 + 1,01,000

(viii) Received commission +500 +500

19,500 + 65,000 + 15,000 + 12,000 = 10,000 + 1,01,500

(ix) Sold goods (costing Rs 50,000) for cash +60,000 –50,000 +10,000 (Profit)

79,500 + 15,000 + 15,000 + 12,000 = 10,000 + 1,11,500

Working Note:

WN1 Calculation of Selling Price

Suggest Corrections

Similar questions

Calculate the trend percentages from the following information taking year ending 2014 as the base year :

Join BYJU'S Learning Program