Question No 6 Chapter No 4
6. Arvind has the following transaction. Use accounting equation to show their effect on his assets, liabilities and capital:
| (i) | Commenced business with cash Rs 90,000 and bank balance Rs 40,000 |
| (ii) | Travelling expenses paid by cheque Rs 7,000 |
| (iii) | Salary due but not paid Rs 5,500 |
| (iv) | Rent paid for next year by cheque Rs 6,000 |
| (v) | Interest received Rs 12,000 |
| (vi) | Interest due but not received Rs 8,000 |
| (vii) | Commission received in advance for next year Rs 9,000 |
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The solution of Question No 6 Chapter No 4: –
| S. No. | Particulars | Assets | Liabilities | Capital | ||
| Cash | +Stock | + prepaid rent+ Interest Accrued |
Sal.Due. +Com. Re.adv |
|||
| 1 | Commenced business with cash | 90,000 | +40,000 | – | – | 1,30,000 |
| 90,000 | +40,000 | – | – | 1,30,000 | ||
| 2 | Travelling expenses paid by cheque | – 7,500 | – | – | -7,500 | |
| 90,000 | +32,500 | – | – | 1,22,500 | ||
| 3 | Salary due but not paid | – | – | – | 5,500 | -5,500 |
| 90,000 | +26,500 | + 6,000 | 5,500 | 1,17,000 | ||
| 4 | Rent paid for next Year by cheque | +12,000 | – 6,000 | + 6,000 | – | – |
| 90,000 | +26,500 | + 6,000 | 5,500 | 1,17,000 | ||
| 5 | Interest received | +12,000 | – | – | – | +12,000 |
| 1,02,000 | +26,500 | + 6,000 | 5,500 | 1,29,000 | ||
| 6 | Interest due but not received | – | + 8,000 | – | ||
| 1,02,000 | +26,500 | 6,000 +8,000 | 5,500 | 1,29,000 | ||
| 7 | Commission received in advance | +9,000 | +9,000 | |||
| Total | 1,110,00 | +26,500 |
+ 6,000 +8,000 | 5,500 +9,000 |
1,29,000 | |
Answer: –
Assets = 1,10,000 + 26,500 + 6,000 + 8,000 = 1,51,500/-
Capital = 1,29,,000/-
Liabilities = 5,500 + 9,000/-
Liabilities +Capital
5,5000 + 9,000+ 1,29,000= 1,51,500/-
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