Analyse the effect of each transaction on assets and liabilities and show that the both sides of Accounting Equation (A = L + C) remains equal :
(i) Introduced ₹ 8,00,000 as cash and ₹ 50,000 by stock.
(ii) Purchased plant for ₹ 3,00,000 by paying ₹ 15,000 in cash and balance at a later date.
(iii) Deposited ₹ 6,00,000 into the bank.
(iv) Purchased office furniture for ₹ 1,00,000 and made payment by cheque.
(v) Purchased goods worth ₹ 80,000 for cash and for ₹ 35,000 in credit.
(vi) Goods amounting to ₹ 45,000 was sold for ₹ 60,000 on cash basis.
(vii) Goods costing to ₹ 80,000 was sold for ₹ 1,25,000 on credit.
(viii) Cheque issued to the supplier of goods worth ₹ 35,000.
(ix) Cheque received from customer amounting to ₹ 75,000.
(x) Withdrawn by owner for personal use ₹ 25,000.
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Answer:
- Introduction ₹ 800000 as a cash and₹ 50000 as stock.
A=L+C
Cash+ Goods=Liabilities+ capital
8,00,000+50,000=0+8,50,000
___________________________
8,50,000=8,50,000
- Purchase plant for ₹ 3,00,000 by paying₹15000 in cash and balance at a later date.
A=L+C
Cash+ goods = creditors+ capital
8,00,000+50,000=0+8,50,000
(-)15,000+(+)3,00,000=2,85,000+0
___________________________
7,85,000+3,50,000=2,85,000+8,50,000
- Deposited₹ 6,00,000 into bank
A=L+C
Cash+ bank+goods= creditors+ capital
7,85,000+ 0 +3,50,000=2,85,000+8,50,000
(-)6,00,000+6,00,000= 2,85,000+8,50,000
____________________________________
1,85,000+6,00,000+3,50,000=2,85,000+8,50,000
- Purchase office furniture for₹ 1,00,000 and made payment by cheque.
A=L+C
Cash+bank+ goods=creditors+ capital
1,85,000+6,00,000+3,50,000=2,85,000+8,50,000
0. (-)100000+(+)100000=285000+850000
______________________________________
185000+500000+450000=285000+850000
Hope it helps you
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