Rule: Assets= Capital + Liabilities
Started business with cash and bank balance Rs. 1,00,000 and Rs. 50,000 respectively.
Goods costing Rs. 10,000 sold for Rs. 12,000 on credit.
Goods purchased on credit Rs. 5,000.
Received from debtor Rs. 11,800 in full settlement.
Paid to creditor Rs. 4,700 in full settlement.
Loan taken from Everest bank limited Rs. 20,000.
Rent paid rs. 12,000 including pre-paid Rs. 2,000.
Commission received Rs. 6000 including advance Rs. 1,000.
Furniture costing rs. 1,500 sold for rs. 1,200 on credit.
Machinery costing rs. 5,000 destroyed by fire and Insurance Company admitted claim rs. 3,000.
Interest on loan paid rs. 1,800 and still payable rs. 200.
Donation paid rs. 1,000.
Rent received rs. 2,000 and still receivable rs. 200.
Accounting Equation 5 marks
|1||Started business with cash and bank balance||1,00,000 cash 50,000 bank balance||1,50,000||0|
|2||Goods sold on credit with profit||12,000 debtor (10,000) goods||2000 (profit)||0|
|3||Goods purchased on credit||5000 Goods||5000 (creditor)|
|4.||Received from debtor in full settlement||11,800 cash (12,000) debtor||-200 (discount allowed)||5,000|
|New equation||1,56,800||=||1,51 ,800||+||5,000|
|5.||Paid to creditor in full settlement||(4,700) cash||300 (discount received)||0|
|6||Loan taken from Everest bank limited||20,000 cash||0||20,000|
|7||Rent paid including prepaid||(10,000) cash (2,000) prepaid rent||(12,000) expenses||0|
|8||Commission received including advance||6,000 cash||5,000 (income)||1,000|
|9||Furniture sold on loss||1200 cash (1500) furniture||(300) loss||0|
|10||Machinery destroyed by fire and insurance co. admitted claim partially||3,000 (insurance co.) (5,000) machinery||(2,000) loss||0|
|11||Interest on load paid and still payable||(1800) cash||(2000) interest||200|
|12||Donation Paid||(1000) cash||(1000) expenses||0|
|13||Rent received and still receivable||2,000 cash 200 receivable||2,200 (income)||0|
Therefore, Assets= 1,63,200, Capital=1,42,000 and Liabilities= 21,200.