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Question 14 Chapter 3 – Unimax Publications of Class 11
14. Show the effect of following transactions on Accounting equation.
(a) George started business with cash Rs. 1,00,000 and bank balance Rs. 30,000.
(b) Purchased goods for cash Rs. 30,000 and on credit Rs. 20,000.
(c) Sold half of the total of above goods purchased at a profit of 20% on cost.
(d) Sold remaining goods purchased at a profit of 20% on sale.
(e) Purchased goods for Cash Rs. 45,000.
(f) Advance received from a customer Rs. 10,000 by cheque.
(g) Goods destroyed by fire Rs. 15,000. Insurance company admitted the claim for Rs. 8,000.
The solution of Question 14 Chapter 3 – Unimax Publications of Class 11:
| Transactions | Assets | Liabilities | + Capital | ||||
| Cash | +Bank | +Stock | +Claim Admitted | Creditors | +Advance from customers | ||
| (a) George started business with cash and bank balance | +1,00,000 | +30,000 | +1,30,000 | ||||
| (b) Purchased goods for cash and on credit. | -30,000 | +0 | +50,000 | +20,000 | +0 | ||
| (c) Sold half of the total of above goods purchased at a profit of 20% on cost. | +30,000 | +0 | -25,000 | 0 | +5,000 | ||
| (d) Sold remaining goods purchased at a profit of 20% on sale. | +31,250 | +0 | -25,000 | 0 | +6,250 | ||
| (e) Purchased goods for Cash Rs. 45,000. | -45,000 | +0 | +45,000 | 0 | 0 | ||
| (f) Advance received from a customer Rs. 10,000 by cheque. | +0 | +10,000 | +0 | 0 | +10,000 | 0 | |
| (g) Goods destroyed by fire Rs. 15,000. | 0 | +0 | -15,000 | +8000 | 0 | +0 | -7,000 |
| 86,250 | 40,000 | 30,000 | 8000 | 20,000 | 10,000 | 1,34,250 | |
| 1,64,250 | 1,64,250 | ||||||
BALANCE SHEET
| Liabilities | Amount | Assets | Amount |
| Creditors | 20,000 | Cash | 84,250 |
| Advance from customers | 10,000 | Bank | 40,000 |
| Capital | 1,34,250 | Stock | 30,000 |
| Claim admitted | 8,000 | ||
| 1,64,250 | 1,64,250 |
Working Notes: –
| (iii) Half of 50,000 = | 50,000 x | 1 | = 25,000 |
| 2 | |||
| 20% Profit on cost = | 25,000 x | 20 | = 5,000 |
| 100 | |||
| (iv) Remaing goods = | 25,000 | ||
| 20% Profit on cost = | 25,000 x | 20 | |
| 100-20 | |||
| 25,000 x | 20 | = 6,250 | |
| 80 |
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