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 |
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 |
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 |
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 |