Rohit has the following transactions:
Rs
(a)
Commenced business with cash
1,50,000
(b)
Purchased machinery on credit
40,000
(c)
Purchased goods for cash
20,000
(d)
Purchased car for personal use
80,000
(e)
Paid to creditors in full settlement
38,000
(f)
Sold goods for cash costing Rs 5,000
4,500
(g)
Paid rent
1,000
(h)
Commission received in advance
2,000
Prepare the Accounting Equation to show the effect of the above transactions on the assets, liabilities and capital.
Rohit has the following transactions:
|
|
| Rs |
| (a) | Commenced business with cash | 1,50,000 |
| (b) | Purchased machinery on credit | 40,000 |
| (c) | Purchased goods for cash | 20,000 |
| (d) | Purchased car for personal use | 80,000 |
| (e) | Paid to creditors in full settlement | 38,000 |
| (f) | Sold goods for cash costing Rs 5,000 | 4,500 |
| (g) | Paid rent | 1,000 |
| (h) | Commission received in advance | 2,000 |
Prepare the Accounting Equation to show the effect of the above transactions on the assets, liabilities and capital.
S.No.
Explanation
Assets
Liabilities
+
Capital
Cash
+
Machinery
+
Stock
=
Creditors
+
Unaccrued Income
(a)
Increase in cash
1,50,000
Increase in capital
1,50,000
1,50,000
=
NIL
+
1,50,000
(b)
Increase in machinery
40,000
Increase in creditors
=
40,000
1,50,000
+
40,000
=
40,000
+
1,50,000
(c)
Increase in stock
20,000
Decrease in cash
(20,000)
1,30,000
+
40,000
+
20,000
=
40,000
+
1,50,000
(d)
Decrease in cash
(80,000)
Decrease in capital (Drawings)
(80,000)
50,000
+
40,000
+
20,000
=
40,000
+
70,000
(e)
Decrease in creditors
(40,000)
Decrease in cash
(38,000)
Increase in capital
(Discount received)
2,000
12,000
+
40,000
+
20,000
=
NIL
+
72,000
(f)
Increase in cash
4,500
Decrease in stock
(5,000)
Decrease in capital (Loss)
(500)
16,500
+
40,000
+
15,000
=
NIL
+
71,500
(g)
Decrease in cash
(1,000)
Decrease in capital (Expense)
(1,000)
15,500
+
40,000
+
15,000
=
NIL
+
70,500
(h)
Increase in cash
2,000
Increase in unaccrued income
=
2,000
17,500
+
40,000
+
15,000
=
NIL
+
2,000
+
70,500
| S.No. | Explanation | Assets | Liabilities | + | Capital | |||||||||
| Cash | + | Machinery | + | Stock | = | Creditors | + | Unaccrued Income | ||||||
| (a) | Increase in cash | 1,50,000 | | |
| |||||||||
| Increase in capital |
|
|
|
|
|
|
| | |
| 1,50,000 | |||
|
| 1,50,000 | = | NIL | | | + | 1,50,000 | |||||||
| (b) | Increase in machinery | 40,000 | | |
| |||||||||
| Increase in creditors |
|
|
|
|
| = | 40,000 | | |
|
| |||
|
| 1,50,000 | + | 40,000 | = | 40,000 | | | + | 1,50,000 | |||||
| (c) | Increase in stock | 20,000 | | |
| |||||||||
| Decrease in cash | (20,000) |
|
|
|
|
|
| | |
|
| |||
|
| 1,30,000 | + | 40,000 | + | 20,000 | = | 40,000 | | | + | 1,50,000 | |||
| (d) | Decrease in cash | (80,000) | | |
| |||||||||
| Decrease in capital (Drawings) |
|
|
|
|
|
|
| | |
| (80,000) | |||
| 50,000 | + | 40,000 | + | 20,000 | = | 40,000 | | | + | 70,000 | ||||
| (e) | Decrease in creditors |
| (40,000) | | |
| ||||||||
| Decrease in cash | (38,000) | | |
| ||||||||||
| Increase in capital (Discount received) |
|
|
|
|
|
|
| | |
| 2,000 | |||
| 12,000 | + | 40,000 | + | 20,000 | = | NIL | | | + | 72,000 | ||||
| (f) | Increase in cash | 4,500 | | |
| |||||||||
| Decrease in stock |
| (5,000) | | |
| |||||||||
| Decrease in capital (Loss) |
|
|
|
|
|
|
| | |
| (500) | |||
| 16,500 | + | 40,000 | + | 15,000 | = | NIL | | | + | 71,500 | ||||
| (g) | Decrease in cash | (1,000) | | |
| |||||||||
| Decrease in capital (Expense) |
|
|
|
|
|
|
| | |
| (1,000) | |||
| 15,500 | + | 40,000 | + | 15,000 | = | NIL | | | + | 70,500 | ||||
| (h) | Increase in cash | 2,000 | | |
| |||||||||
| Increase in unaccrued income |
|
|
|
|
| = | | 2,000 |
|
| ||||
|
| 17,500 | + | 40,000 | + | 15,000 | = | NIL | + | 2,000 | + | 70,500 | |||
