arvind had the following transactions. Use Accounting
Equation to show their effect on his assets. liabilities
and capital:
(a) Invested 15,000 in cash as capital.
(b) Purchased furniture for cash 37.500.
(c) Purchased a building for 15,000, giving 5.000
in cash and the balance through a loan.
(d) Sold furniture costing? 1,000 for 3 1,500.
(e) Purchased an old car for 2,800 cash, (-)
o Received cash as rent 73,600 cred Cobits -
(g) Paid cash 3 500 for loan and 3 300 for interest
(h) Paid cash for household expenses 7 300.
(1) Received cash for dividend on securities 3200
[Ans. Assets = 328,200 ; Liabilities
= 9,500; Capital = 18,700)
Answers
Answer:
S. No.
Transactions
Assets
=
Liabilities
+
Capital
Cash
(Rs)
+
Furniture
(Rs)
+
Building
(Rs)
+
Old Car
(Rs)
(Loan)
(i)
Invested Rs 15,000 in cash as Capital
15,000
15,000
(ii)
Purchased Furniture for Cash
(7,500)
7,500
7,500
+
7,500
=
15,000
(iii)
Purchased Building for Rs 15,000, giving Rs 5,000 in cash and balance through loan
(5,000)
+
+
15,000
10,000
2,500
+
7,500
+
15,000
=
10,000
+
15,000
(iv)
Sold Furniture costing Rs 1,000 for Rs 1,500
1,500
(1,000)
500
(Profit)
4,000
+
6,500
+
15,000
=
10,000
+
15,500
(v)
Purchased an Old Car for Cash
(2,800)
2,800
1,200
+
6,500
+
15,000
+
2,800
=
10,000
+
15,500
(vi)
Received cash as Rent
3,600
3,600
4,800
+
6,500
+
15,000
+
2,800
=
10,000
+
19,100
(vii)
Paid cash for Loan and Interest
(800)
(500)
(300)
4,000
+
6,500
+
15,000
+
2,800
=
9,500
+
18,800
(viii)
Paid Cash for Household Expenses
(300)
(300)
3,700
+
6,500
+
15,000
+
2,800
=
9,500
+
18,500
(ix)
Received Cash for Dividend
200
200
3,900
+
6,500
+
15,000
+
2,800
=
9,500
+
18,700