1) Prove that the Accounting Equation is satisfied in all the following transactions of Suresh.
Also prepare a Balance Sheet.
(i) Commenced business with cash ₹ 60,000.
(ii) Paid rent in advance ₹ 500.
(iii) Purchased goods for cash ₹ 30,000 and credit ₹ 20,000.
(iv) Sold goods for cash ₹ 30,000 costing ₹ 20,000.
(v) Paid salary ₹ 500 and salary outstanding being ₹ 100.
(vi) Bought motorcycle for personal use ₹ 5,000.
BALANCE SHEET
2) Prepare a Two Column Cash Book from the following transactions∶−
2016
May 1 Cash at office ₹ 72.
Bank overdraft ₹ 1,250.
4 Received from Prem Chand a cheque for ₹ 1,875 in full settlement of his account of ₹
1,900. The cheque was banked on the same day.
5 Bought goods and paid by cheque ₹ 500.
6 Narinder settled his account of ₹ 700 by a cheque. This was banked on the same day.
9 Paid to Manohar Lal by a cheque for ₹ 420. Discount received ₹ 80.
12 Cash sales to date ₹ 400 of which ₹ 300 were banked.
17 Sold old typewriter for cash ₹ 320.
20 Received a cheque for ₹ 400 from Naresh in full settlement of his account of ₹ 460. The
cheque is endorsed to Suresh on 24th May in full settlement of his account of ₹ 420.
25 Received a cheque from Hari Prakash for ₹ 150. The cheque is endorsed to Raj Prakash on
27th May; Discount received ₹ 30.
28 Withdrew from Bank for office use ₹ 100 and for personal use ₹ 100.
29 WIthdrew (from office) for payment of private bills ₹ 425.
30 Paid by cheque salaries ₹ 160 and rent ₹ 100.
31 Bank charges as per Pass Book ₹ 5.
3) Give the adjusting entry for the following adjustments:
[a] Managers commission Rs.1000
[b] Interest on capital Rs.2000
[c] Goods distributed as a free sample Rs.3000
[d] Goods taken by the proprietor for personal use.Rs.4000
[a] Managers commission:
Managers Commission account.Dr1000
To Managers commission outstanding.a/c 1000
Being Adjusting entry passed.]
[b] Interest on capital:
Interest on capital a/c Dr 2000
To capital a/c 2000
[Being interest on capital allowed.]
[c] Goods distributed as a free sample
Samples or advertisement or sales promotion expenses a/c Dr 3000
To purchases a/c 3000
[Being good distributed as free samples.]
[d] Goods taken by the proprietor for personal use.
Drawings a/c Dr 4000
To purchases a/c 4000
[being Goods taken by the proprietor for personal use.]
4) From the following ledger balance of shradha as on 31st march, 2019, prepare trading and
profit and loss account and balance sheet:
Particulars Rs.
capital 80,000
drawings 18,000
sales 1,55,000
purchases 82,600
stock (1st april, 2018) 42,000
returns outward 1,600
carriage inwards 1,200
wages 4,000
power 6,000
machinery 50,000
furniture 14,000
rent 22,000
salary 15,000
insurance 3,600
8% bank loan 25,000
debtors 20,600
creditors 18,900
cash in hand 1,500
adjustments:
(i) closing stock ₹ 64,000.
(ii) wages outstanding ₹ 2,400.
(iii) bad debts ₹ 600.
(iv) provision for doubtful debts to be 5%.
(v) rent is paid for 11 months.
(vi) insurance premium is paid per annum, ended 31st may, 2019.
(vii) loan from the bank was taken on 1st october, 2018
(viii) provide depreciation on machinery @ 10% and on furniture @ 5%.
Particular Amt Particular Amt
Opening Stock 42,000 sales 1,55,000
Purchases 82,600 Closing Stock 64,000
Less: Return Outwards 81,000
(1,600)
Carriages Inwards 1,200
Wages 4,000
Add: Outstanding Wages 6,400
2,400
Power 6,000
Gross Profit (Balancing 82,400
Figure)
2,19,000 2,19,000
