Use accounting equation to show the effect of the following transactions of MRoyal Traders beginarray ln- Rs aStarted business with cash - 1-20-000 1 t e x t b Purchased goods for cash - 10-000 1 e Prepaid insurance - 1-000 f Received interest - 700 1-textg Sold goods for cash costing Rs 5-000 - 7-000 1 t e x t h G o o d s d e s t r o y e d b y f i r e - 500 1lend array

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Standard XI

Economics

Market Supply Curve

Use accountin...

Question

Use accounting equation to show the effect of the following transactions of M\s Royal Traders

$\begin{matrix} (R s) (a)Started business with cash & 1, 20, 000 (b) Purchased goods for cash & 10, 000 (c) Rent received & 5, 000 (d) Salary outstanding & 2, 000 (e) Prepaid insurance & 1, 000 (f) Received interest & 700 (g) Sold goods for cash (costing Rs 5,000) & 7, 000 (h) Goods destroyed by fire & 500 \end{matrix}$

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Solution

Statement showing the effect of various transactions on Accounting Equation

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Rohit has the following transactions

$\begin{matrix} (R s) (a)Commenced business with cash & 1, 50, 000 (b) Purchased machinery on credit & 40, 000 (c) Purchased goods for cash & 20, 000 (d) Purchased car for personal use & 80, 000 (e) Paid to Creditors in full settlement & 38, 000 (f) Sold goods for cash costing Rs 5,000 & 4, 500 (g) Paid rent & 1, 000 (h) Commission received & 2, 000 \end{matrix}$

Prepare the accounting equation to show the effect of the above transactions on the assets, liabilities and capital.

Use accounting equation to show the effect of the following transactions of M/s Royal Traders:

		Rs
(a)	Started business with cash	1,20,000
(b)	Purchased goods for cash	10,000
(c)	Rent received	5,000
(d)	Salary outstanding	2,000
(e)	Prepaid Insurance	1,000
(f)	Received interest	700
(g)	Sold goods for cash (costing Rs 5,000)	7,000
(h)	Goods destroyed by fire	500

Show that the effect of following transaction on the accounting equation

$\begin{matrix} (R s) (a)Manoj started business with (i) Cash & 2, 30, 000 (ii) Goods & 1, 00, 000 (iii) Building & 2, 00, 000 (b) He purchased goods for cash & 50, 000 (c) He sold goods ( costing Rs 20,000) & 35, 000 (d)He purchased goods from Rahul & 55, 000 (e) He sold goods to Varun (costing Rs 52,000) & 60, 000 (f)He paid cash to Rahul in full settlement & 53, 000 (g) Salary paid by him & 20, 000 (h) Received cash from Varun in full settlement & 59, 000 (i)Rent outstanding & 3, 000 (j)Prepaid Insurance & 2, 000 (k)Commission received by him & 13, 000 (l) Amount withdrawn by him for personal use & 20, 000 (m) Depreciation charged on building & 10, 000 (n) Fresh capital invested & 50, 000 (0) Purchased goods from Rakhi & 6, 000 \end{matrix}$

Q. Use Accounting Equation to show the effect of the following transactions of M/s Royal Traders :Prepare

		(₹)
(a)	Started Business with Cash	1,20,000
(b)	Purchased goods for cash	10,000
(c)	Rent received	5,000
(d)	Salary Outstanding	2,000
(e)	Prepaid insurance	1,000
(f)	Received interest	700
(g)	Sold goods for cash (costing ₹5,000)	7,000
(h)	Goods destroyed by fire	500

Prepare accounting equation on the basis of the following

$\begin{matrix} (R s) (a) Harsha started business with cash & 2, 00, 000 (b) Purchased goods from Naman for cash & 40, 000 (c) Sold goods to Bhanu costing Rs 10,000 & 12, 000 (d) Bought furniture on credit & 7, 000 \end{matrix}$

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