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#Accounting Problems and Solutions 2#

The document shows accounting transactions for a business owner that affect assets, liabilities, and capital. It tracks purchases, sales, payments and deposits. The transactions are presented as equations to demonstrate their impact on the accounting equation.

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Alexa Lee
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16 views3 pages

#Accounting Problems and Solutions 2#

The document shows accounting transactions for a business owner that affect assets, liabilities, and capital. It tracks purchases, sales, payments and deposits. The transactions are presented as equations to demonstrate their impact on the accounting equation.

Uploaded by

Alexa Lee
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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Accounting Problems and Solutions 2

PROBLEM

Following are the accounting transactions relating to Mr. P's business. Use the accounting
equation to show their effect on his assets, liabilities and capital.

1. Commenced business with a Capital of 50,000


2. Bought Machinery for cash 10,000
3. Purchased goods for cash 15,000
4. Purchased goods from A on credit 5,000
5. Sold goods for cash 10,000
6. Paid to A 2,000
7. Sold goods to B on credit 3,000
8. Paid into Bank 6,000
9. Paid to A by cheque 1,000
SOLUTION

This solution differs from the first only in the way the data is presented. Data here is presented in
the form of a mathematical equation while in the previous it is presented in the form of a
statement.

1.

Capital + Liabilities = Assets

50,000 +0 = 50,000 (Cash)

3.

Capital + Liabilities = Assets

50,000 +0 = 40,000 (Cash) + 10,000 (Machinery)

5.

Capital + Liabilities = Assets

50,000 +0 = 25,000 (Cash) + 10,000 (Machinery) + 15,000 (Goods)


7.

Capital + Liabilities = Assets

50,000 + 5,000 (A) = 25,000 (Cash) + 10,000 (Machinery) + 20,000 (Goods)

9.

Capital + Liabilities = Assets

50,000 + 5,000 (A) = 35,000 (Cash) + 10,000 (Machinery) + 10,000 (Goods)

11.

Capital + Liabilities = Assets

50,000 + 3,000 (A) = 33,000 (Cash) + 10,000 (Machinery) + 10,000 (Goods)

13.

Capital + Liabilities = Assets

50,000 + 3,000 (A) = 33,000 (Cash) + 10,000 (Machinery) + 7,000 (Goods) + 3,000
(B)

15.

Capital + Liabilities = Assets

50,000 + 3,000 (A) = 27,000 (Cash) + 10,000 (Machinery) + 7,000 (Goods) + 3,000
(B)
+ 6,000 (Bank)

17.

Capital + Liabilities = Assets

50,000 + 2,000 (A) = 27,000 (Cash) + 10,000 (Machinery) + 7,000 (Goods) + 3,000
(B)
+ 5,000 (Bank)

19.
Capital + Liabilities = Assets

50,000 + 2,000 (A) = 27,000 (Cash) + 10,000 (Machinery) + 7,000 (Goods) + 1,000
(B)
+ 7,000 (Bank)

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