Question

Q- Monu had the following transactions
1. Started business with cash - 100000
2. Deposit cash into bank - 60000
3. Bought a machine by raising a bank loan -50000
4. Bought goods for cash 20000 and on credit - 40000
5. Goods bought for cash was sold to amit - 25000
6. Amit returned goods worth - 5000
7. Amit settled his account by paying - 19500
8. Paid instalment of bank loan 20000 and paid interest by cheque 2000
9. Charge 10% deprection on machine
Use accounting equation to show effect of above transaction

Answer 1

1. cash a /c Dr 100000
to capital a/c 100000

2. Bank a/c Dr 60000
to cash a/c 60000

3. machinery a/c Dr 50000
to bank loan a/c 50000

4. purchase a/c Dr 60000
to cash a/c 20000
to creditors a/c 40000

5. amit a/c Dr 25000
to sales a/c 25000

6. return inward a/c Dr 5000
to amit a/c 5000

7. bad debts a/c Dr 500
to amit a/c 500

8. Bank loan a/c Dr 20000
interest on bank loan Dr 2000
to cash a/c 20000
to bank a/c 2000

9. depreciation a/c Dr 5000
to machinery a/c 5000