Question

Considering the following transaction prepare an accounting

equation:-

a) Started business with Cash and Rs.10,00,000 and Goods

Rs.50,000

b) Bought goods from Varun for Rs.25,000.

c) Goods costing Rs.50,000 sold at a profit of 20%

d) Rent paid Rs.20,000 and Outstanding Rs. 45,000.

e) Paid to Varun Rs.9,800 and discount received Rs.100.

f) Paid Insurance Rs.20,000 including Rs.4,000 for next year.​

Answer 1

Answer:

a) started business with cash and rs. 10,00,000 and goods rs. 50,000

here

capital a/c 10,50,000

cash a/c 10,00,000

stock a/c 50,000

b) Bought goods from Varun for Rs. 25,000

cash a/c (10,00,000 -25,000) = Rs. 9,75,000

stock a/c (50,000 + 25,000) = 75,000

c) Goods costing Rs.50,000 sold at a profit of 20%

stock a/c (75,000 - 50,000) = 25,000

Cash a/c = 9,75,000 + 50,000 + 20% of 50,000

= 9,75,000 + 50,000 + 10,000

=10,35,000

Capital a/c = 10,50,000 + 20% of 50,000

= 10,50,000 + 10,000

=10,60,000

d) Rent paid Rs.20,000 and outstanding Rs.45,000

Rent paid : cash a/c = 10,35,000 -20,000

= 10,15,000

Rent outstanding : 45,000

Capital : (10,60,000 - (45,000 + 20,000))

= 10,60,000 - 65,000

= 9,95,000