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Question

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 cash1,25,000(b) Purchased goods for cash50,000(c) Purchase furniture from RK furniture10,000(d) Solid goods to Parul Traders (costing Rs 7,000 vide bill no 5674)9,000(e) Paid cartage100(f) Cash paid to RK furniture in full settlement9,700(g) Cash sales(costing Rs 10,000)12,000(h) Rent received 4,000(i)Cash withdraw for personal use3,000

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Solution

Statement showing the effect of various transactions on Accounting Equation

Assets=Liabilities+CapitalCash+Stock+Furniture+Debtors=Creditors+Capital(a)1,25,000=1,25,000 1,25,000=1,25,000(b)(50,000)+50,000 75,000+50,000=1,25,000(c)10,000=10,000 75,000+50,000+10,000=10,000+1,25,000(d)(7,000)9,000=2,000 75,000+43,000+10,000+9,000=10,000+1,27,000(e)(100)=(100) 74,900+43,000+10,000+9,000=10,000+1,26,900(f)(9,700)=(10,000)300 65,200+43,000+10,000+9,000=Nil+1,27,200(g)12,000+(10,000)=2,000 77,200+33,000+10,000+9,000=Nil+1,29,200(h)4,000=4,000 81,200+33,000+10,000+9,000=Nil+1,33,200(i)(3,000)=(3,000)78,200+33,000+10,000+9,000=Nil+1,30,200Total1,30,200=1,30,200


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