Mr. Sunrise started a business for buying and selling of stationery with Rs. 5,00,000 as an initial investment. Of which he paid Rs.1,00,000 for furniture, Rs. 2,00,000 for buying stationery items. He employed a sales person and clerk. At the end of the month he paid Rs.5,000 as their salaries. Out of the stationery bought he sold some stationery for Rs.1,50,000 for cash and some other stationery for Rs.1,00,000 on credit basis to Mr.Ravi. Subsequently, he bought stationery items of Rs.1,50,000 from Mr. Peace. In the first week of next month there was a fire accident and he lost Rs. 30,000 worth of stationery. A part of the machinery, which cost Rs. 40,000, was sold for Rs. 45,000.
From the above, answer the following :
What is the amount of capital with which Mr. Sunrise started business.
What are the fixed assets he bought?
What is the value of the goods purchased?
Who is the creditor and state the amount payable to him?
What are the expenses?
What is the gain he earned?
What is the loss he incurred?
Who is the debtor? What is the amount receivable from him?
What is the total amount of expenses and losses incurred?
Determine if the following are assets, liabilities, revenues, expenses or none of the these: sales, debtors, creditors, salary to manager, discount to debtors, drawings by the owner.
Answers
Answer:
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The answers to the questions are given below:
Explanation:
1.What is the amount of capital with which Mr. Sunrise started the business?
Mr. Sunrise started the business with an investment of rupees 5 Lakhs.
2.What are the fixed assets he bought?
He bought furniture for rupees 1 Lakh, and that was his fixed asset.
3.What is the value of the goods purchased?
He purchased goods worth 2 Lakh rupees for his business.
4.Who is the creditor and state the amount payable to him?
Mr. Peace is the creditor, and Mr. Sunrise needs to pay him 1,50,000 rupees to him.
5.What are the expenses?
Mr.Sunrise appointed a salesperson and a clerk. Their salaries of rupees 10,000 were the expenses.
6.What is the gain he earned?
He gained 5000 rupees by selling a machine. The original cost of the machine was 40,000 rupees, but he sold it for 45,000 rupees.
7.What is the loss he incurred?
During the first month, there was a fire accident in the store, in which he lost 30,000 rupees worth of stationery items.
8.Who is the debtor? What is the amount receivable from him?
Mr. Ravi is the debtor, and he needs to give 1,00,000 rupees to Mr. Sunrise.
9.What is the total amount of expenses and losses incurred?
Mr. Sunrise's total expense is 3,30,000 rupees, and the loss incurred is rupees 30,000.