Question 9: Prepare an Accounting Equation on the basis of the following transactions: (i) Started business with cash 70,000. 3. (iii) Sold goods for cash costing ₹ 10,000 and on credit costing ₹ 15,000 both at a profit of 20%. 70,000. Credit purchase of goods Rs. (ii) Purchased goods for cash ₹ 30,000 and on credit from Karan ₹ 20,000. 5. If in the above case, the proprietor had introduced fresh capital of â¹ 40,000 and had withdrawn â¹ 10,000 for personal purposes, calculate his profits. On 31st March, 2012 his assets were worth â¹ 5,00,000 and liabilities â¹ 1,00,000. He withdrew ₹ 800 for his personal use. A partnership in liquidation has converted all assets into cash and paid all liabilities. What is the total of assets in his business on 31st March, 2019? (iii) Payment made to creditors in full settlement ₹ 17,500. (vi) Goods Sold to Gupta for ₹ 10,000 and received a Bill Receivable for the same amount for 3 months. Q.19 If the capital of a business is ₹ 3,00,000 and liabilities are ₹ 50,000, loss ₹ 70,000, calculate the total assets of the business. Yogesh commenced business on 1st April, 2011 with a Capital of â¹ 5,00,000 and a loan of â¹ 1,00,000 borrowed from Citi Bank. (i) The accounting equation is always equal it ensures the accuracy in the recording of a business transaction. Purchased goods for â¹ 50,000 for cash. Opening Capital (Capital as on 1st April, 2013) = Rs 1,00,000. For example, if monthly purchases are 18,000 and month end creditors are 19,000 the creditor days is calculated as follows. 'A' commenced his cloth business on 1st April, 2011 with a capital of â¹ 3,00,000. The reason why the accounting equation is so important is that it is always true - and it forms the basis for all accounting transactions. 3. 18,000 (iii) Payment made to creditors in full settlement Rs. 2. During the process, the debt settlement company would advise the borrower to stop making payments to their creditors and instead make payments to the debt settlement company (albeit at a lower payment rate). For this transaction the accounting equation is shown in the following table. Prepare accounting equation from the following: Accounting Equation Formula: Assets= Liabilities- Owner’s Equity. The first journal is to record the cash paid to the supplier. ACCOUNTING (AC310) Uploaded by. (iv) Interest due but not paid ₹ 100. 5. As we know, increase in liability is recorded on the credit side while decrease in liability will be shown on the debit side of the concerned liability account. 24,700 to Naveed store in full settlement for June 5 th transaction by bank. (iii) Rent paid â¹ 5,000. Started business with cash Rs. Purchase of machinery for cash Rs 20,000. Find out his capital and assets of the business. Increase in Debtors (being an asset) will be shown on the debit side and decrease in them will be recorded on the credit side of the Debtors Account. (iii) Payment made to creditors in full settlement * 17,500. (b) Credit purchase of goods Rs.18,000. A 2% cash discount on 500 is 10, and the amount of cash the business actually pays the supplier pays is 490. WN1 Calculation of Selling Price of Goods Sold 10% discount is allowed if payment is made within 30 days. The accounting equation also indicates that the company's creditors have a claim of $7,120 and the owner has a residual claim of $10,080. All Accountancy Dk Goel 2019 Solutions for class Class 11 Commerce Accountancy are prepared by experts and are 100% accurate. Trade Discount 25% and Cash Discount 5% if full payment is made within 14 days. Half the payment received in cash. Show the accounting equation on the basis of the following transactions and present a Balance Sheet of the last new equation balance: Prove that the accounting equation is satisfied in the following transactions:−. (ii) Salaries paid ₹ 2,000. (iii) Goods costing 40,000 were sold for 55,000. (iii) Payment made to creditor 17,500 in full settlement (iv) Purchase of Machinery for Cash 20,000 (v) Depreciation on Machinery 2,000 Solution: Question 10. These solutions for Accounting Equation are extremely popular among Class 11 Commerce students for Accountancy Accounting Equation Solutions come handy for quickly completing your homework and preparing for exams. Find out his closing capital and profits earned during the year. The solution for this question is as follows: Q.10 Prove that the Accounting Equation Accounting Equation S.No Transaction Assets = Liabilities + Capital Cash + Furniture + Stock = Creditors 1. WN1 Calculation of Sale Price. (i) Commenced business with Cash â¹ 20,000; Goods â¹ 50,000 and Furniture â¹ 30,000. (d) Purchased goods from Mohan â¹ 80,000. If you are using purchases for a different period then replace the 365 with the number of days in the management accounting period. (vi) Salary paid in advance â¹ 3,000. (ii) Purchased goods for cash ₹ 20,000 and on credit ₹ 30,000. (iv) Purchase of machinery for cash ₹ 20,000. 1. Q.17 Prepare Accounting Equation from the following: (a) Started business with cash ₹ 1,00,000. Total Cost of Goods Sold = 40,000 + 72,000 = Rs 1,12,000. When the cash discount is given to customer on sale for one time settlement. (iv) Purchase of … Received Cash from Bhushan â¹ 10,000. 2. Prepare the accounting equation on the basis of the following data. Prepare an Accounting Equation on the basis of the following transactions: (i) Started business with Cash ₹ 70,000 (ii) Credit purchase of goods ₹ 18,000 (iii) Payment made to creditor ₹ 17,500 in full settlement (iv) Purchase of Machinery for Cash ₹ 20,000 (v) Depreciation on Machinery ₹ 2,000 Solution: Then divide the resulting turnover figure into 365 days to arrive at the number of accounts payable days. During the year, the following transactions took place: (i) Furniture purchased Purchased goods on credit from Raghubir, Goods (costing Rs 50,000) sold at a profit of 25% on cost, Purchased goods for cash and on credit from Karan, Goods costing Rs 40,000 sold for Rs 55,000, Sold goods for Cash (cost price was â¹ 3,000), Sold goods (costing Rs 3,000) for Rs 4,000, Goods costing Rs 48,000 sold at a profit of, Goods costing Rs 20,000 sold at a loss of 5% out of which Rs 12,000 were received in cash, Started business with cash, goods and furniture, Sold goods (costing Rs 30,000) for cash Rs 40,000, Sold goods (costing Rs 50,000) to Ram for Rs 65,000, Paid for printing Rs 500 and received commission Rs 1,200, Value of furniture was reduced by â¹ 5,000, Paid rent Rs 4,000 including Rs 1,000 as advance, Purchased goods for cash Rs 30,000 and on credit Rs 20,000, Sold goods (costing Rs 20,000) for Rs 25,000, Purchased furniture Rs 10,000 for office use and Rs 5,000 for domestic use. Prepare Accounting Equation from the following: He sold goods (Costing â¹ 20,000) for cash. (v) Depreciation on machinery ₹ 2,000. (c) Bought goods for cash â¹ 30,000 and on credit â¹ 20,000. Calculate his closing capital and profits earned during the year. (b) Credit purchase of goods â¹ 18,000. Also prepare a Balance Sheet. (i) Started a business with cash â¹ 1,00,000 and goods worth â¹ 20,000. (v) Depreciation on machinery 2,000. (b) Purchased goods for cash â¹ 30,000 and on credit from Karan â¹ 20,000. Q.5 Prepare Accounting Equation from the following: (i) Started business with cash ₹ 1,00,000 and Goods ₹ 20,000. (v) Paid salary ₹ 500 and salary outstanding being ₹ 100. 13. The accounting equation concept is built into all accounting … (b) Paid rent â¹ 4,000 including â¹ 1,000 as advance. (b) Sold goods to Hari on credit â¹ 20,000. Q.27 On 31st March, 2019, the total assets and external liabilities were ₹ 2,00,000 and ₹ 6,000 respectively. 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