Question

Show the effect of following transaction on the accounting equation:
(a) Manoj started business with
$\hspace{0.5cm}$ (i) Cash $\hspace{1.5cm}$ Rs. 2,30,000
$\hspace{0.5cm}$ (ii) Goods $\hspace{1.5cm}$ Rs. 1,00,000
$\hspace{0.5cm}$ (iii) Building $\hspace{1.5cm}$ Rs. 2,00,000
(b) He purchased goods for cash $\hspace{1.5cm}$ Rs. 50,000
(c) He sold goods (costing Rs.20,000) $\hspace{1.5cm}$ Rs. 35,000
(d) He purchased goods from Rahul $\hspace{1.5cm}$ Rs. 55,000
(e) He sold goods to Varun (Costing Rs. 52,000) $\hspace{1.5cm}$Rs. 60,000
(f) He paid cash to Rahul in full settlement $\hspace{1.5cm}$ Rs. 53,000
(g) Salary paid by him $\hspace{1.5cm}$ Rs. 20,000
(h) Received cash from Varun in full settlement $\hspace{1.5cm}$Rs. 59,000
(i) Rent outstanding $\hspace{1.5cm}$Rs. 3,000
(j) Prepaid Insurance $\hspace{1.5cm}$Rs. 2,000
(k) Commission received by him $\hspace{1.5cm}$ Rs. 13, 000
(l) Amount withdrawn by him for personal use $\hspace{1.5cm}$ Rs. 20,000
(m) Depreciation charge on building $\hspace{1.5cm}$ Rs. 10,000
(n) Fresh capital invested $\hspace{1.5cm}$Rs. 50,000
(o) Purchased goods from Rakhi $\hspace{1.5cm}$ Rs. 10,000

Answer 1

Answer:

Explanation:

(a)  Assets

Cash + goods + building = 230000+ 100000+ 200000= 530000

Liabilities  

530000

(b)   Assets

Cash + goods + building = 230000- 50000 + 100000 + 50000 + 200000= 530000

Liabilities  

530000

(c) Assets

Cash + goods + building = 180000+35000 + 150000- 20000 + 200000= 545000

Liabilities  

530000 + 15000 = 545000

(d)  Assets

Cash + goods + building = 215000+130000+55000 + 200000= 600000

Liabilities  

Creditors + capital

545000+ 55000= 600000

(e) Assets

Cash + goods + building = 215000+ 185000- 52000+ 200000 + 60000= 608000

Liabilities  

55000 + 545000 + 8000

= 608000

(f)  Assets

Cash + goods + building = 215000-53000 +133000+ 200000+ 60000 = 555000

Liabilities  

Creditors + capital

555000