1. Give the effect of the following transactions in the accounting equation: (1) Started business with cash `1,00,000.
(2) Purchased goods worth `20,000 in cash and worth `10,000 on credit
(3) Sold goods costing `10,000 at a profit of 10% and received 20% in cash and balance top be received later.
(4) Rent paid `1,000, including prepaid Rent `300.
(5) Interest received `2,000, and accrued Interest `500.
(6) Goods costing `2,000 ( Selling Price `3,000 ) and Furniture worth `1,000 lost by fire.
(7) Life Insurance Premium paid in cash `2,000.
(8) Bought computer for office use from Shyam worth `20,000. He was paid `10,000 and for the rest of the amount a bill was accepted.
(9) Deposited `5,000 in Bank.
(10) Sold goods to Amit (costing `6,000) at a profit of 25% on sale.
(11) Paid `9,500 in full settlement of the claim of creditors of `10,000. L
(12) Depreciation charged on Machinery of `10,000 @ 5%p.a.
(13) Invested in Shares `5,000, including personal investment of the owner worth `1,000.
Answers
(2) Purchased goods worth `20,000 in cash and worth `10,000 on credit
(3) Sold goods costing `10,000 at a profit of 10% and received 20% in cash and balance top be received later.
(4) Rent paid `1,000, including prepaid Rent `300.
(5) Interest received `2,000, and accrued Interest `500.
(6) Goods costing `2,000 ( Selling Price `3,000 ) and Furniture worth `1,000 lost by fire.
(7) Life Insurance Premium paid in cash `2,000.
(8) Bought computer for office use from Shyam worth `20,000. He was paid `10,000 and for the rest of the amount a bill was accepted.
(9) Deposited `5,000 in Bank.
(10) Sold goods to Amit (costing `6,000) at a profit of 25% on sale.
(11) Paid `9,500 in full settlement of the claim of creditors of `10,000. L
(12) Depreciation charged on Machinery of `10,000 @ 5%p.a.
(13) Invested in Shares `5,000, including personal investment of the owner worth `1,000.
Answer:
1. cash account. Dr. 1,00,000
to Capital account
2. purchase account. Dr. 20,000
purchase account. Dr 10,000
to cash account. 20,000
to credit account. 10,000
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