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(x) Withdrawn by owner for personal use ₹ 25,000.
Answers
Answer:
Explanation:
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
or
Transactions
Assets
=
Liabilities
+
Capital
Cash
(Rs)
+
Stock
(Rs)
+
Plant
(Rs)
+
Bank
(Rs)
+
Furniture
(Rs)
+
Debtors
(Rs)
(Rs)
(Rs)
(i)
Commenced business with cash Rs 8,00,000 and Stock Rs 50,000
8,00,000
50,000
8,50,000
(ii)
Purchased Plant for Rs 3,00,000 and paid Rs 15,000 in cash and balance at later date
(15,000)
3,00,000
2,85,000
7,85,000
+
50,000
+
3,00,000
2,85,000
+
8,50,000
(iii)
Deposited Rs 6,00,000 into Bank
(6,00,000)
6,00,000
1,85,000
+
50,000
+
3,00,000
+
6,00,000
=
2,85,000
+
8,50,000
(iv)
Purchased Office Furniture and payment made through cheque
(1,00,000)
1,00,000
1,85,000
+
50,000
+
3,00,000
+
5,00,000
+
1,00,000
=
2,85,000
+
8,50,000
(v)
Purchased Goods for 80,000 in cash and 35,000 on credit
(80,000)
1,15,000
35,000
1,05,000
+
1,65,000
+
3,00,000
+
5,00,000
+
1,00,000
=
3,20,000
+
8,50,000
(vi)
Goods Sold on Cash Basis
60,000
(45,000)
15,000 (Profit)
1,65,000
+
1,20,000
+
3,00,000
+
5,00,000
+
1,00,000
=
3,20,000
+
8,65,000
(vii)
Goods Sold on Credit
(80,000)
1,25,000
45,000 (Profit)
1,65,000
+
40,000
+
3,00,000
+
5,00,000
+
1,00,000
+
1,25,000
=
3,20,000
+
9,10,000
(viii)
Cheque issued to the Supplier
(35,000)
(35,000)
1,65,000
+
40,000
+
3,00,000
+
4,65,000
+
1,00,000
+
1,25,000
=
2,85,000
+
9,10,000
(ix)
Cheque received from Customer
75,000
(75,000)
1,65,000
+
40,000
+
3,00,000
+
5,40,000
+
1,00,000
+
50,000
=
2,85,000
+
9,10,000
(x)
Withdrawn for Personal Use
(25,000)
(25,000)
1,40,000
+
40,000
+
3,00,000
+
5,40,000
+
1,00,000
+
50,000
=
2,85,000
+
8,85,000
Answer:
goods costing to rupees 80,000 was sold for rupees 1,25,000 on credit