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CBSE Class 11-commerce Answered

Transaction of Arihant Traders are given below. Show the effects on asset, liability and capital with the help of accounting equation. Business started with cash Rs.1,25,000 Purchased furniture from JSW for cash Rs.20,000 Paid for carriage Rs.400 Cash withdrew for personal use Rs.5,000 Rent received Rs. 6,000

Asked by Topperlearning User | 14 Jun, 2016, 10:03: AM

Expert Answer

Sr. No	Explanation	Assets		=	Liabilities + Capital
		Cash +	Furniture	=	Liabilities	+ Capital
i.	Increase in cash	(+)1,25,000
	Increase in capital					(+)1,25,000
		1,25,000		=	NIL +	1,25,000
ii.	Increase in furniture		(+)20,000
	Decrease in cash	(-)20,000
		1,05,000	20,000	=	NIL +	1,25,000
iii.	Paid carriage (expense)					(− )400
	Decrease in cash	(− )400
		1,04,600	20,000	=	NIL +	1,24,600
iv.	Cash withdrew for personal use	(−) 5,000
	Decrease in capital					(− )5,000
		99,600	20,000	=	NIL +	1,19,600
v.	Increase in cash	(+)6,000
	Increase in capital (profit)					(+)6,000
		1,05,600	20,000	=	NIL +	1,25,600

Answered by | 14 Jun, 2016, 12:03: PM

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