Financial Accounting MGT101 Assignment #1 Solution

                                            
                                     
                        

                      Question no.1

Recall the accounting equation and answer the following:

                             1: Total Assets of business are Rs.100,000/- and total Liabilities are Rs.40,000/- What will be the amount of Owner’s equity?

                       Answer:

                     Assets = 100,000

                     Liabilities = 40,000

                 Owner’s equity = ?

         Assets = liabilities + owner’s equity

        100,000 = 40,000 + owner’s equity

          100,000 – 40,000 = owner’s equity

              owner’s equity = 60,000      

                                  

            2:     Total Assets of business are Rs.500,000/- and Owner’s equity is Rs.300,000/- What will be the amount of Liabilities?

                                Answer:

                                   Assets = 500,000

                                    Owner’s equity = 300,000           

                              Liabilities =?

                            Assets = liabilities + owner’s equity

                       500,000 = liabilities + 300,000

                             500,000 –300,000 = liabilities

                                 Liabilities    = 200,000      

                                3: Total Liabilities of business are Rs.400,000/- and Owner’s equity is Rs.500,000/- What will be the amount of Assets?

Answers:

                             Liabilities = 400,000

                                Owner’s equity = 500,000           

           Assets = liabilities + owner’s equity

                       Assets= 400,000 + 500,000

                                     Assets= 900,000      

Question No 2:

Solution:

                  

Sr. #	Date	Particulars
01	Jan 01	Waqas invested total capital of Rs.1,200,000/- in the business
02	Jan 01	He deposited Rs.600,000/- in bank a/c of business
03	Feb 01	Purchase two cars worth Rs.100,000/- on cash
04	Feb 01	Brought office furniture costing Rs.70,000/- and made payment through cheque
05	June 05	Collected Rs.4000/- 0n accounts receivable
06	July 11	Paid accounts payable of Rs.3200/- by issuing cheque
07	Aug 01	Borrowed Rs.10,000/- from Mr.Ali and signed a note payable for amount

Journal Entries:

Entry no 1:

Date	Particulars	code	Amount(Dr.) Rs.	Amount(Cr.) Rs.
01-01-2011	Cash A/c             Capital A/c Started business with cash	01 02	1,200,000	1,200,000

Entry No.3:

 

Date	Particulars	code	Amount(Dr.) Rs.	Amount(Cr.) Rs.
02-01-2011	Car A/c             Cash A/c Purchase two cars	04 01	100,000	100,000

Entry No.4:

 

Date	Particulars	code	Amount(Dr.) Rs.	Amount(Cr.) Rs.
02-01-2011	Furniture A/c             Cash A/c Purchase furniture	05 01	70,000	70,000

Entry No.5:

 

Date	Particulars	code	Amount(Dr.) Rs.	Amount(Cr.) Rs.
06-05-2011	Accounts receivable A/c             Cash A/c Purchase furniture	06 01	4000	4000

Entry No.6:

Date	Particulars	code	Amount(Dr.) Rs.	Amount(Cr.) Rs.
07-11-2011	Accounts payable A/c             Cash A/c Paid accounts payable	07 01	3200	3200

Entry No. 7:

 

Date	Particulars	code	Amount(Dr.) Rs.	Amount(Cr.) Rs.
08-01-2011	Loan A/c             Cash A/c Take loan from Mr.Ali	08 01	10,000	10,000

 

Cash Account                             (Account Code # 1)
Date	particulars	Code #	Amount Rs.(Dr.)	Date	particulars	Code #	Amount Rs.(Dr.)
01-01-11 06-05-2011 08-01-2011 02-01-2011	Capital Account receivable Loan receive Cash drawn for furniture	02 06 08 05	1200,000 4000 10,000 70,000	01-01-2011 07-11-2011 02-01-2011	Deposited in bank Accounts payable Purchase car Balance	03 07 04	600,000 3200 100,000 580800
	Total		1284000		Total		1284000

         

Bank Account          (Account # 03)
Date	particulars	Code#	Amount Rs.(Dr.)	Date	particulars	Code#	Amount Rs.(Dr.)
01-01-2011	Cash deposited	03	600,000	02-01-2011 07-11-2011	Office furniture purchase Account payable	05 07	70,000 3200