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# Class 11-commerce T S GREWAL Solutions Accountancy Chapter 5 - Accounting Equation

## Accounting Equation Exercise 5.18

### Solution 1

 Sr. No. Transactions Assets = Liabilities+ Capital Cash Rs. + Bank + Rs. Stock Rs. = Creditors Rs. Capital Rs. (i) Started business with cash 45,000 = 45,000 45,000 = 45,000 (ii) Opened a Bank Account with a deposit (4,500) 4,500 = 40,500 4,500 = 45,000 (iii) Bought goods from M/s .Sun and Co. 11,200 = 11,200 Total 40,500 + 4,500 + 11,200 = 11,200 + 45,000

### Solution 2

 Sr. No. Transactions Assets = Liabilities + Capital Cash Rs. + Stock Rs. + Debtors Rs. = Creditors Rs. Capital Rs. (i) Gopinath started business with 25,000 = 25,000 25,000 = 25,000 (ii) Purchased goods from Shyam 10,000 10,000 25,000 10,000 = 10,000 25,000 (iii) Sold goods to Sohan (1,800) 1,500 = (300) 25,000 8,200 1,500 = 10,000 24,700 (iv) Gopinath withdraw from business (5000) = (5,000) Total 20,000 + 8,200 + 1,500 = 10,000 + 19,700

### Solution 3

 Sr. No. Transactions Assets = Liabilities + Capital Cash Rs. + Advance Expenses Rs. = Outstanding Expenses Rs. Capital Rs. (i) Started business with cash 50,000 = 50,000 50,000 = 50,000 (ii) Salaries paid (2,000) = (2,000) (Exp.) 48,000 = 48,000 (iii) Wages Outstanding = 200 (200) 48,000 = 200 47,800 (iv) Interest due but not paid = 100 (100) (Exp.) 48,000 = 300 47,700 (v) Rent pain advance (150) 150 = Total 47,850 + 150 = 300 + 47,700

### Solution 4

 Sr. No. Transactions Assets = Liabilities + Capital Cash Rs. + Stock Rs. = Creditors Rs. + Outstanding Rent Rs. + Capital Rs. (i) Harish started business with cash 18,000 = 18,000 18,000 = 18,000 (ii) Purchased goods for cash Rs.5,000 and on credit Rs.2,000 (5,000) 7,000 = 2,000 13,000 7,000 = 2,000 + 18,000 (iii) Sold goods for cash Rs.4,000 costing Rs.2,400 4,000 (2,400) = 1,600 (Profit) 17,000 4,600 = 2,000 + 19,600 (iv) Rent paid Rs.1,000 and Rent Outstanding Rs.200 (1,000) = 200 (1,200) Total 16,000 + 4,600 = 2,000 200 + 18,400

## Accounting Equation Exercise 5.19

### Solution 5

 Sr. No. Transactions Assets = Liabilities + Capital Cash Rs. + Stock + Rs. Furniture Rs. = Creditors Rs. + Capital Rs. (i) Started business with cash Rs.1,00,000 and Goods Rs.20,000 1,00,000 20,000 = 1,20,000 1,00,000 20,000 = 1,20,000 (ii) Sold goods worth Rs.10,000 for cash Rs.12,000 12,000 (10,000) = 2,000 (Profit) 1,12,000 10,000 = 1,22,000 (iii) Purchased furniture on credit for Rs.30,000 30,000 = 30,000 Total 1,12,000 + 10,000 + 30,000 = 30,000 + 1,22,000

### Solution 6

 Sr. No. Transactions Assets = Liabilities + Capital Cash Rs. + Furniture  Rs. + Stock Rs. = Creditors Rs. + Capital Rs. (i) Ajeet started business with cash Rs.20,000 20,000 = 20,000 20,000 = 20,000 (ii) He purchased furniture for Rs.2,000 (2,000) 2,000 = 18,000 2,000 = 20,000 (iii) He paid rent of Rs.200 (200) = (200) (Exp.) 17,800 2,000 = 19,800 (iv) He purchased goods on credit Rs.3,000 3,000 = 3,000 17,800 2,000 + 3,000 = 3,000 19,800 (v) He sold goods(cost price Rs. (2,000) for Rs.5,000 on cash 5,000 + (2,000) = 3,000 (Profit) Total 22,800 + 2,000 + 1,000 = 3,000 + 22,800

 Balance Sheet Liabilities Rs. Assets Rs. 1,000 25,800 25,800

### Solution 7

 Sr. No. Transactions Assets = Liabilities + Capital Cash Rs. + Stock  Rs. + Debtors Rs. = Creditors Rs. + Capital Rs. (i) Started business with cash Rs.1,00,000 1,00,000 = 1,00,000 1,00,000 = 1,00,000 (ii) Purchased goods for cash Rs.20,000 and on credit Rs.30,000 (20,000) 50,000 = 30,000 80,000 50,000 = 30,000 1,00,000 (iii) Sold goods for cash costing Rs.10,000 and on credit costing Rs.15,000 both at a profit of 20% 12,000 (10,000)   (15,000) + 18,000 =   = 2,000   3,000 Total 92,000 + 25,000 + 18,000 = 30,000 + 1,05,000

### Solution 8

 Sr. No. Transactions Assets = Liabilities + Capital Cash Rs. + Stock  Rs. + Furniture Rs. = Creditors Rs. + Capital Rs. (i) Mohan commenced business with cash 50,000 = 50,000 50,000 = 50,000 (ii) Purchased goods for cash (30,000) 30,000 = 20,000 30,000 = 50,000 (iii) Purchased goods on credit 20,000 = 20,000 20,000 50,000 = 20,000 50,000 (iv) Sold goods costing Rs.10,000 for Rs.12,000 12,000 (10,000) = 2,000 (Profit) 32,000 40,000 = 20,000 52,000 (v) Bought furniture on credit 2,000 = 2,000 32,000 40,000 + 2,000 = 22,000 52,000 (vi) Paid cash to creditor (15,000) = (15,000) 17,000 40,000 + 2,000 = 7,000 52,000 (vi) Salary paid (1,000) = (1,000) Total 16,000 + 40,000 + 2,000 = 7,000 + 51,000

### Solution 9

 Sr. No. Transactions Assets = Liabilities + Capital Cash Rs. + Stock  Rs. + Machinery Rs. = Creditors Rs. Capital Rs. (i) Started business with cash Rs.70,000 70,000 70,000 70,000 70,000 (ii) Credit purchase of goods Rs.18,000 18,000 = 18,000 70,000 18,000 = 18,000 70,000 (iii) Payment made to creditor Rs.17,500 in full settlement (17,500) = (18,000) 500 (Discount Received) 52,500 18,000 = NIL 70,500 (iv) Purchase of machinery for cash Rs.20,000 (20,000) 20,000 32,500 18,000 20,000 = NIL 70,500 (v) Depreciation on machinery Rs.2,000 (2,000) (2,000) (Depreciation) Total 32,500 + 18,000 + 18,000 = NIL + 68,500

### Solution 10

 Sr. No. Transactions Assets = Liabilities + Capital Cash Rs. + Prepaid Rent Rs. + Stock Rs. = Creditors Rs. + Outstanding Salary Rs. + Capital Rs. (i) Commenced business with cash Rs.60,000 60,000 60,000 60,000 = 60,000 (ii) Paid rent in advance Rs.500 (500) 500 59,500 500 = 60,000 (iii) Purchased goods for cash Rs.30,000 and credit Rs.20,000 (30,000) 50,000 20,000 29,500 500 50,000 = 20,000 60,000 (iv) Sold goods for cash 30,000 costing Rs.20,000 30,000 (20,000) 10,000 (Profit) 59,500 500 30,000 = 20,000 70,000 (v) Paid salary Rs.500 and salary outstanding being Rs.100 (5000) = (5,000) (Drawings) Total 54,000 + 500 + 30,000 = 20,000 + 100 + 64,400

 Balance Sheet Liabilities Rs. Assets Rs. 30,000 85,500 85,500

## Accounting Equation Exercise 5.20

### Solution 11

 Sr. No. Transactions Assets = Liabilities + Capital Cash Rs. + Accrued Interest Rs. = Advance Commission  Rs. + Capital Rs. (i) Started business with cash Rs.60,000 60,000 = 60,000 60,000 = 60,000 (ii) Rent received Rs.2,000 2,000 = 2,000 (Income) 62,000 = 62,000 (iii) Accrued interest Rs.500 500 = 500 (Income) 62,000 500 = 62,500 (iv) Commission received in advance Rs.1,000 1,000 = 1,000 63,000 500 = 1,000 62,500 (v) Amount withdrawn Rs.5,000 ( 5000) = (5,000) Total 58,000 + 500 = 1,000 + 57,500

 Balance Sheet Liabilities Rs. Assets Rs. 500 58,500 58,500

### Solution 12

 Sr. No. Transactions Assets = Liabilities + Capital Cash Rs. + Prepaid Rent Rs. + Stock Rs. = Creditors Rs. + Outstanding Salary Rs. + Capital Rs. (i) Started business with cash Rs.10,000 10,000 10,000 10,000 = 10,000 (ii) Paid rent in advance Rs.300 (300) 300 9,700 300 = 10,000 (iii) Purchased goods for cash Rs.5,000 and credit Rs.2,000 (5,000) 5,000 = 2,000 2,000 = 4,700 300 7,000 = 2,000 10,000 (iv) Sold goods for cash Rs.8,000 costing Rs.4,000 8,000 (4,000) 4,000 (Profit) 12,700 300 3,000 = 2,000 14,000 (v) Paid salary Rs.450 and salary outstanding being Rs.100 (450) = 100 (450) (Expenses) (100) (Expenses) 12,250 300 3,000 = 2,000 + 100 13.450 (vi) Brought motorcycle for personal use Rs.3,000 (3,000) = (3,000) (Drawings) Total 9,250 + 300 + 3,000 = 2,000 + 100 10,450

### Solution 13

 Sr. No. Transactions Assets = Liabilities + Capital Cash Rs. + Bank Rs. + Stock Rs. + Furniture Rs. + Motor Cycle Rs. = Creditors Rs. + Outstanding Rent Rs. + Capital Rs. (i) Commenced business with Cash Rs.50,000 50,000 50,000 50,000 = 50,000 (ii) Paid in to bank Rs.10,000 (10,000) 10,000 40,000 10,000 = 50,000 (iii) Purchased goods for cash Rs.20,000 and credit Rs.30,000 (20,000) 20,000   30,000 30,000 20,000 10,000 50,000 = 30,000 50,000 (iv) Sold goods for cash Rs.40,000 costing Rs.30,000 40,000 (30,000) = 10,000 (Expenses) 60,000 10,000 20,000 = 30,000 60,000 (v) Rent paid Rs.500 (500) = (500) (Expenses) 59,500 10,000 20,000 = 30,000 59,500 (vi) Rent outstanding Rs.100 100 (100) (Drawings) 59,500 10,000 20,000 = 30,000 100 59,400 (vii) Bought Furniture on credit Rs.5,000 5,000 = 5,000 54,500 10,000 20,000 5,000 = 35,000 100 59,400 (viii) Bought refrigerator for personal use Rs.5,000 (5,000) = (5,000) (Drawings) 54,500 10,000 20,000 5,000 = 35,000 100 54,500 (ix) Purchased motorcycle for cash (20,000) 20,000 = Total 34,500 + 10,000 + 20,000 + 5,000 + 20,000 = 35,000 + 100 + 54,400

 Balance Sheet Liabilities Rs. Assets Rs. 20,000 89,500 89,500

### Solution 14

 Sr. No. Transactions Assets = Liabilities + Capital Cash Rs. + Stock Rs. = Creditors Rs. + Outstanding Rent Rs. + Capital Rs. (i) Started business with cash Rs.50,000 and goods Rs.30,000 50,000 30,000 = 80,000 50,000 30,000 = 80,000 (ii) Purchased goods for cash Rs.30,000 and on credit from Kiran Rs.20,000 (30,000) 30,000   20,000 20,000 20,000 80,000 = 20,000 80,000 (iii) Goods costing Rs.40,000 were sold for Rs.55,000 55,000 (40,000) 15,000 (Profit) 75,000 40,000 = 20,000 95,000 (iv) Withdraw cash for personal use Rs.10,000 (10,000) (10,000) (Drawings) 65,000 40,000 = 20,000 85,000 (v) Rent outstanding Rs.2,000 2,000 (2,000) (Expenses) Total 65,000 + 40,000 = 20,000 + 2,000 + 83,000

## Accounting Equation Exercise 5.21

### Solution 15

 Sr. No. Transactions Assets = Liabilities + Capital Cash + Rs. Bank + Rs. Stock + Rs. Machinery + Rs. Furniture + Rs. DebtoRs.+ Rs. Bills Receivables Rs. = Capital Rs. (1) Started business with cash Rs.50,000 and Bank Rs.1,00,000 Stock Rs.60,000 Machinery Rs.1,00,000 Furniture Rs.50,000 50,000 1,00,000 60,000 1,00,000 50,000 1,50,000   60,000 1,00,000 50,000 50,000 1,00,000 60,000 1,00,000 50,000 = 3,60,000 (ii) 1/3rd of above goods sold at a profit of 10% on cost and half of it received in cash (WN) 11,000 (20,000) 11,000 2,000 (Profit) 61,000 1,00,000 40,000 1,00,000 50,000 11,000 = 3,62,000 (iii) Depreciate machinery by 10% (Rs.1,00,000 × 10%) (10,000) (10,000) Expense 61,000 1,00,000 40,000 90,000 50,000 11,000 = 3,52,000 (iv) Cash withdrawn for personal use (10,000) = (10,000) 51,000 1,00,000 40,000 90,000 50,000 11,000 = 3,42,000 (v) Interest on drawings charged @ 5% (500) 500 51,000 1,00,000 40,000 90,000 50,000 11,000 = 3,42,000 (vi) Goods sold to Gupta for Rs.10,000 and received a Bill Receivable for the same amount (10,000) 10,000 51,000 1,00,000 30,000 90,000 50,000 11,000 10,000 = 3,42,000 (vii) Received Rs.10,000 from Gupta against the Bill Receivable on its maturity 10,000 (10,000) Total 61,000 + 1,00,000 30,000 + 90,000 + 50,000 + 11,000 + NIL = 3,42,000

Working Note:

Rs.60,000 × 1/3 = Rs.20,000 × 110% = Rs.22,000

Half received in Cash = Rs.11,000

### Solution 16

 Sr. No. Transactions Assets = Liabilities + Capital Cash Rs. + Stock Rs. + Debtors Rs. = Creditors Rs. + Capital Rs. (i) started business with cash Rs.1,00,000 1,00,000 1,00,000 1,00,000 = 1,00,000 (ii) purchased good for cash Rs.20,000 and credit Rs.30,000 (20,000) 50,000 30,000 80,000 50,000 30,000 1,00,000 (iii) Sold goods for cash Rs.10,000 and credit 15,000 both at profit of 20% 12,000 (25,000) 18,000 = 5,000 (Profit) 92,000 25,000 18,000 = 30,000 1,05,000 (iv) Paid Salaries Rs.8,000 (8,000) (8,000) Total 84,000 + 25,000 + 18,000 = 30,000 + 97,000

### Solution 17

 Sr. No. Transactions Assets = Liabilities + Capital Cash Rs. + Stock Rs. + Debtors Rs. + = Creditors Rs. + Capital Rs. (i) Ram started business with cash Rs.1,00,000 25,000 25,000 25,000 = 25,000 (ii) purchased good form Shyam credit costing Rs.10,000 10,000 10,000 25,000 + 10,000 + = 10,000 25,000 (iii) Sold goods to Sohan costing Rs.1,500 for Rs.1,800 (1,500) 1,800 300 (Profit) Total 25,000 + 8,500 + 1,800 = 10,000 + 25,300

### Solution 18

 -- Rs.2,80,000

Total Assets of the business is Rs.2,80,000

### Solution 19

 -- Rs.50,000

Creditors is Rs.50,000.

### Solution 20

 -- Rs.-10,000

### Solution 21

 2,20,000

Total Assets of the business is Rs.2,20,000

## Accounting Equation Exercise 5.22

### Solution 22

 -- Rs.75,000

### Solution 23

 Total Assets = Rs.90,000 --- Rs.- Rs.. Revised Capital = Rs.72,500 ii. Assets = Rs.87,500

### Solution 24

 Mohan Started the Business a. Capital on 31st March 2019 = Capital on April 01,2018 + Profit - Drawings = Rs.10,000 + Rs.5,000 - Rs.4,000 = Rs.11,000

 Mahesh Started the Business b. Total Assets on 31st March 2019 = Capital on April 01, 2018 + Profit + Creditors = Rs.15,000 + Rs.3,000 + Rs.2,500 = Rs.20,500

### Solution 25

 Mohan Started the Business Capital on 31st March 2019 = Assets - Loan from Shyam = Rs.75,000 - Rs.12,500 = Rs.62,500 Profit (or Loss) during the year 2018 - 19 = Capital on March 31, 2019 + Drawings - (Capital on April 01, 2018 +Additional Capital) = Rs.62,500 + Rs.7,500 - ( Rs.25,000 + Rs.12,500) = Rs.70,000 - Rs.37,500 = Rs.32,500

### Solution 26

 Capital on 31st March 2019 = Total Assets - External Liabilities = Rs.2,00,000 - Rs.6,000 = Rs.1,94,000 Capital on 01st April 2018 = Capital on March 31, 2019 - Additional Capital + Drawings - Profit = Rs.1,94,000 - Rs.20,000 + Rs.12,000 - Rs.20,000 = Rs.1,66,000

### Solution 27

 Sr. No. Transactions Assets = Liabilities + Capital Cash Rs. + Bank Rs. + Building and Furniture Rs. + Stock Rs. + Debtors Rs. = Creditors Rs. + Security Deposit Rs. + Capital Rs. (i) Sunil started business with cash Rs.1,50,000 1,50,000 = 1,50,000 1,50,000 = 1,50,000 (ii) Opened Bank Account by depositing Rs.25,000 from cash (25,000) 25,000 = 1,25,000 25,000 = 1,50,000 (iii) Sold personal car for Rs.50,000 and deposited money in Bank A/c 50,000 = 50,000 1,25,000 75,000 = 2,00,000 (iv) Building and Furniture purchased for Rs.1,00,000 (1,00,000) 1,00,000 = 25,000 75,000 1,00,000 = 2,00,000 (v) Purchased goods from Ram on credit 50,000 = 50,000 25,000 75,000 1,00,000 50,000 = 50,000 2,00,000 (vi) Paid Cartage Rs.500 (500) = (500) (Exp.) 24,500 75,000 1,00,000 50,000 = 50,000 1,99,500 (vii) Sold to Shyam on credit goods costing Rs.6,000 for Rs.9,000 (6,000) 9,000 = 3,000 (Profit) 24,500 75,000 1,00,000 44,000 9,000 = 50,000 2,02,500 (viii) Received rent from tenants of Rs.1,000 1,000 = 1,000 (Income) 25,500 75,000 1,00,000 44,000 9,000 = 50,000 2,03,500 (ix) Received Security Deposits from tenants of Rs.1,500 1,500 = 1,500 27,000 75,000 1,00,000 44,000 9,000 = 50,000 1,500 2,03,500 (x) Purchased Stationery for Cash of Rs.100 (100) = (100) (Exp.) 26,900 75,000 1,00,000 44,000 9,000 = 50,000 1,500 2,03,400 (xi) Invested in Shares (personal) Rs.50,000 (50,000) = (50,000) (Drawings) 26,900 25,000 1,00,000 44,000 9,000 = 50,000 1,500 1,53,400 (xii) Received Interest of Rs.200 in Cash 200 = 200 (Income) 27,100 25,000 1,00,000 44,000 9,000 = 50,000 1,500 1,53,600 (xiii) Introduced fresh Capital of Rs.25,000 25,000 = 25,000 52,100 25,000 1,00,000 44,000 9,000 = 50,000 1,500 1,78,600 (xiv) Goods of Rs.500 were destroyed by fire (500) = (500) (Loss) Total 52,100 + 25,000 + 1,00,000 + 43,500 + 9,000 = 50,000 + 1,500 + 1,78,100