PRACTICAL PROBLEMS

1. What will be effect of the following on the Accounting Equation

)Start ed business with cash 7 45,000
( ) Opened a Bank Account with a deposit of 7 4,500
(iii) Bought goods from M/s. Sun & Co. for7 11,200 (KVS 2010)
Assets:Cash 7 40,500 + Bank 4,500 Stock 11,200 =
+

Liabilities: Creditors 11,200 + Capital: F 45,000.]

2. Show the Accounting Equation for the following transactions:

(i) Gopinath started business with cash 25,000

ii)
Purchased goods from Shyam 10,000
(11) Sold goods to Sohan costing 1,800 1,500
(iv) Gopinath withdrew from business 5,000
[Assets: Cash T 20,000 + Stock 7 8,200 +Debtors 1,500 =

Liabilities: Creditors 10,000 +Capital: T 19,700.]

3
3. Show the effect of the following transactions on the Accounting Equation:
(i) Started business with cash 7 50,000.
(i) Salaries paid 7 2,000.
(iii) Wages outstanding 200.
(iv) Interest due but not paid 7 100.

(o) Rent paid in advance 150.

[Assets: Cash 47,850 +PrepaidRent 150 =

Liabilities: Outstanding Expenses 300 + Capital: 47,700.]

4. What will be the effect of the following on the Accounting Equation?
(i) Harish started business with cash 18,000
ii) Purchased goods for cash 5,000 and on credit 7 2,000
(ini) Sold goods for cash 7 4,000 (costing 7 2,400)
(iuy Rent paid ? 1,000 and rent outstanding 200 (Delhi 1998)
[Assets: Cash 7 16, 000 + Stock 4, 600=

Liabilities: Oulstanding Rent 200 + Creditors 2,000 + Capital: 18,400.]

Accounting Equation 5.19
(i)
5. Prepare Accounting Equation from the following:
Mohan business with
(i) Started cash7 1,00,000 and Goods
Sold
20,000.
(i) goods worth 10,000 for cash 12,000.
(iii) Purchased furniture on credit
commenced for 30,000. (Delhi 2011)
Assets: Cash 1,12,000 + Stock 10,000 + Furniture 30,000 =
Liabilities: Creditors for
Furniture 30,000 + Capital: ? 1,22,000
6. Prepare an Accounting Equation and Balance Sheet on the
business following basis:
() Ajeet started business with cash 20,000.
(ii) He purchased furniture for 2,000.
(iii) He paid rent of 7 200. with
(iv)(u) HeHe purchased
goods goods
on credit R 3,000.
sold (cost price cash
2,000) for T 5,000 cash.
on

[Assets: Cash 22,800 +Furniture 2,000 + Stock 1,000 =

Liabilities: Creditors T 3,000 + Capital:7 22,800.]
7. Prepare an Accounting Equation from the following:
) Started business with cash R 1,00,000.
(i) Purchased goods for cash 20,000 and on credit 7 30,000.
(ii) Sold goods for cash costing 7 10,000 and on credit costing 15,000 both at profit
a
of 20%.
(Delhi 2010)
[Assets: Cash 92,000 + Stock 25,000 + Debtors 18,000 =
Liabilities: Creditors 30,000 + Capital: 1,05,000.]
8. Develop an Accounting Equation from the following transactions:

50,000
(i) Purchased goods for cash 30,000
(ii) Purchased goods on credit 20,000
(iv) Sold goods (costing 10,000) for 12,000
(v) Bought furniture on credit 2,000
(ui) Paid cash to a ereditor 15,000
(vii) Salary paid 1,000
Assets: Cash 16,000 + Stock T 40,000 + Furniture 2,000 =
Liabilities: Creditors 5,000 + Vendorfor Furniture 2,000 + Capital: 51,000.]
9. Prepare an Accounting Equation on the basis of the following transactions:
() Started business with cash 70,000.
(ii) Credit purchase of goods 18,000.
(iit) Payment made to ereditors in full settlement 17,500.
(iv) Purchase of machinery for cash T 20,000.
(u) Depreciation on machinery 2,000. (Delhi 2009)
[Assets: Cash 32,500 +Stock 18,000 +Machinery 18,000 =

Liabilities: Nil + Capital: 68,50o.]

10. Prove that the Accounting Equation is satisfied in all the following transactions of Suresh.
Also prepare a Balance Sheet.

) Commenced business with cash F 60,000.

(i) Paid rent in advance R 500.

 5.20 Double Entry Book Koeping CBSE

)Purchased goods for cash 30,000 and credit 20,000.

( ) Sold good« for cash 30,000costing? 20,000.
()Paid salary ? 500 and snlary outstanding being ? 100.
(v) Bought motoreycle for personal use 5,000.
Assets: Cash 54, 000 + Prepaid Rent ? 500 + Stock 30,000
Liabilities: Creditora 20,000 + Outstanding Salary 100 + Capilal: ? 64,4001

11. Show the effect of the following transactions and also prepare a Balance Sheet:
(i) Started business with cash 60,000.
(i) Rent received 2,000.
(ii) Accrued interest 500.
(iv) Commission received in advance 1,000.
(0) Amount withdrawn 5,000.
Assets: Cash 58,000 + Accrued interest 500 = Liabilities: Commission
Received in Advance ? 1,000 + Capital: * 57,500]
Hint: Capital = Opening Capital 7 60,000 + Rent Received 2,000 + Accrued Interest
500- Drawings 5,000 = 57,500.]
12. Prove that the Accounting Equation is satisfied in all the following transactions of Sameer Goel:
(i) Started business with cash 7 10,000.
( ) Paid rent in advance 300.
(i) Purchased goods for cash 7 5,000 and credit 7 2,000.
(iu) Sold goods for cash 8,000 costing 4,000.
(u) Paid salary 7 450 and salary outstanding being 100.
(vi) Bought motorcycle for personal use 3,000. (KVS 199)
Assets: Cash 9,250 + Prepaid Rent 300 +Stock 3,000
Liabilities: Salary Outstanding 7 100 + Creditor T 2,000 + Capital: 7 10,450.

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13. Raghunath had the following transactions in an accounting year:

(i) Commenced business with cash 50,000.
(ii) Paid into bank 7 10,000.
(iii) Purchased goods for cash 20,000 and credit 7 30,000.
(iv) Sold goods for cash 40,000 costing 30,000.
(u) Rent paid 7 500.
(ui) Rent outstanding7 100.
(uii) Bought furniture 5,000 on credit.
(vt) Bught refrigerator for personal use ? 5,000.
(ix) Purchased motorcyclefor cash 20,000.
Creaue an Accounting Equation to show the effect of the above and also show his Balance Sheet.
Assets: Cash R 34, 500 + Bank 10,000 + Stock 7 20,000
+Furniture 5,000 + Motorcycle 20,000 = Liabilities: Creditors 7 30,000
+Dutstanding Rent 7 100 + Vendor for Furniture 5,000 + Capital: 7 54,400.]
14. Prepare an Accounting Equation from the following:
i) Btarted business with cash 50,000 and goods 30,000.
(i) Purchased goods for cash 7 30,000 and on eredit from Karan 20,000.
(i) imds conting 40,000 were Bold for 55,000.
Accounting Equation 5.21

(iu) Withdrew cash for personal use 10,000.

()Rent outstanding 2,000. (MSE Chandigarh 2007
Asaets: Cash 65,000 +Stock 40,000 = Liabilities: Outstanding Rent ? 2,000+
Creditors 7 20,000 + Capital: 83,000.)
15. Show an Accounting Equation for the following transactions:
() D. Mahapatra commenced business with cash 50,000 and 7 1,00,000 by cheque: goods
60,000; machinery 1,00,000 and furniture 50,000.
() 1/3rd of the above goods sold at a profit of 10% on cost and half of the payment is
received in cash.
(ii) Depreciation on machinery provided @ 10%.
(iv) Cash withdrawn for personal use ? 10,000.
(u) Interest on drawings charged @5%.
(Ui) Goods sold to Gupta for R 10,000 and received a Bill Receivable for the same amount
for 3 months.
(vi) Received 10,000 from Gupta against the Bills Receivable on its maturity.
Assets: Cash 61,000 +Bank 1,00,000 + Stock (goods) 30,000 +Machinery
90,000 + Furniture 50,000 + Debtors 11,000 Liabilities: Nil + Capital: 7 3,42,000.]
Hints: 1. Opening Capital 3,60,000 Cash 7 50,000 +Bank 7 1,00.000 + Stock R 60,000

+Machinery7 1,00,000+ Furniture 50,000.

2. Liabilities: Nil.]
16. Prepare Accounting Equation from the following:
(a) Started business with cash7 1,00,000.
(6) Purchased goods for cash ? 20,000 and on credit ? 30,000.
() Sold goods for cash costing 10,000 and on credit costingR 15,000 both at a profit of 20°
(d) Paid salaries 8,000. (Delhi 2012)
Capital: 97,000 +Liabilities: Creditors 30,000 =Assets: Cash 84,000
+Stock T 25,000 + Debtors 18,000.]
17. Show the accounting equation on the basis of following transactions:
(a) Ram started business with F 25,000. (6) Purchased goods from Shyam7 10,000.
Sold goods to Sohan costing 1,500 for7 1,800. (MSE Chandigarh 2015)
(c)
[Capital: 25,300+Liabilities: Creditors 10,000 = Assets: Cash 25,000
+Debtors 7 1,800 + Stock 8,500.]

Calculation of Total Assets, Opening and Closing Capital and Profit and Loss

18. If the capital of a business is 3,00,000 and liabilities are 50,000, loss 70.000, calculate
the total assets of the business. R2.80,000.]
business 1,30,000 and net worth is { 80,000, caleulate the creditors.
19. If total assets ofa are

R 50,000.]

Hint: Net Worth = Assets -

Liabilities.]
2018 with a capital of R 30,000. On
20. A commenced his cloth business on 1st April,
worth R 50,000 and liabilities of R 10,000. Find out his
31st March 2019, his assets were
closing capital and profits earned during the year. [Capital 40,000; Profit 10,000.]
21. If capital of a business is 1,40,000 and liabilities are of R80,000, calculate the total assets
of the business. [TotalAssets 2,20,000.]
 5.22
Double Entry Book Keeping CBSE XI
22. Calculate the total assets it:
() Capital is 7 40,.000. (i) Creditors are 7 25.000.
() Revenue during the period is R 50,000.
(iv) Expenses during the period are T 40,000. (Delhi 2001)
[Total Assets = T 75,000.
23. (a) A had a capital of 75,000 on 1st April, 2018. He had also goods amounting to
15,000 which he had purchased on credit and the payment had not been made. Find
out the value of the total assets of the business. R 90,000.]
(6) After a period of one month, he came to know that he had suffered a loss of R 1,700.
He withdrew 800 for his personal use. Find out his capital and assets of the business.
[Capital 72,500; Assets 87,500.]
24. (a) Mohan started a business on 1st April, 2018 with a capital ofR 10,000 and borrowed 73,000
from a friend. He earned a profit of 5,000 during the year ended 31st March, 2019 and
withdrew cash 4,000 for personal use. What is his capital on 31st March, 2019? R 11,000.]
(6) Mahesh started a business with a capital of T 15,000 on 1st April, 2018. During the
he made a profit of 3,000. He owes T 2,500 to suppliers of goods. What is the total of
year
assets in his business on 31st March, 2019? R 20,500.]
25. Mohan started a business on 1st April, 2018 with a capital of 7 25,000 and a loan of
712,500 borrowed from Shyam. During 2018-19 he had introduced additional capital of
T12,500 and had withdrawn 7,500 for personal use. On 31st March, 2019 his assets were
7 75,000. Find out his capital as on 31st March, 2019 and profit made or loss incurred during
the year 2018-19. Closing Capital 62,500; Profit 32,500.]
26. On 31st March, 2019, the total assets and external liabilities were 2,00,000 and
6,000 respectively. During the year, the proprietor had introduced capital of 20,000 and
withdrawn7 12,000 for personal use. He made a profit of 20,000 during the year. Calculate
the capital as on 1st April, 2018. Opening Capital 1,66,000.
27. Show an Accounting Equation on the basis of the following transactions:
(i) Sunil started business with cash 1,50,000
(i) Opened a Bank Account by depositing F 25,000 out of cash
(ii) He sold his personal car for 7 50,000 and deposited the amount
in the firm's Bank Account
(iv) He purchaseda building and furniture for 1,00,0000
(v) He purchased goods from Ram on credit 50,000
(vi) He paid cartage 500
(uii) He sold to Shyam on credit goods costing R 6,000 for 9,000
(viii) Received rent from tenants 1,000
ix) Received security deposit from tenants 1,500
(x) Purchased stationery for cash 100
(xi) Invested in shares (personal)
50,000
(xii) Received interest in cash 200
(xiii) Introduced fresh capital 25,000
(xiv) Goods destroyed by fire 500
Assets: 2,29,600 =Liabilities: 51,500 +Capital: 7 1,78,100.]
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