TS Grewal Solutions for Class 11 Accountancy Chapter 5 – Accounting Equation

Question 1.

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Question 2.

Solution:

Question 3.

Solution:

Question 4.
What will be the effect of the following on the Accounting Equation?
i. Harish started business with cash Rs.18,000
ii. Purchased goods for cash 5,000 and on credit Rs.2,000
iii. Sold goods for cash Rs.4,000 (costing Rs.2,400)
iv. Rent paid Rs.1,000 and rent outstanding Rs.200
(Delhi 1998)
Solution:

Question 5.
Prepare Accounting Equation from the following:
i. Started business with cash Rs.1,00,000 and Goods Rs.20,000.
ii. Sold goods worth Rs.10,000 for cash Rs.12,000.
iii. Purchased furniture on credit for Rs.30,000.
(Delhi 2011)
Solution:

Question 6.
Prepare an Accounting Equation and Balance Sheet on the following basis:
i. Ajeet started business with cash Rs.20,000.
ii. He purchased furniture for Rs.2,000.
iii. He paid rent of Rs.200.
iv. He purchased goods on credit Rs.3,000.
v. He sold goods (cost price Rs.2,000) for Rs.5,000 on cash.
Solution:

Question 7.
Prepare an Accounting Equation from the following:
i. Started business with cash Rs.1,00,000.
ii. Purchased goods for cash Rs.20,000 and on credit Rs.30,000.
iii. Sold goods for cash costing Rs.10,000 and on credit costing Rs.15,000 both at a profit of 20%.
(Delhi 2010)
Solution:

Question 8.

Solution:

Question 9.

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Question 10.
Prove that the Accounting Equation is satisfied in all the following transactions of Suresh. Also prepare a Balance sheet.
i. Commenced business with cash Rs.60,000.
ii. Paid rent in advance Rs.500.
iii. Purchased goods for cash Rs.30,000 and credit Rs.20,000.
iv. Sold goods for cash Rs.30,000 costing Rs.20,000.
v. Paid salary 500 and salary outstanding being Rs.100
vi. Bought motorcycle for personal use Rs.5,000.
Solution:

Question 11.
Show the effect of the following transactions on assets, liabilities and capital using the Accounting Equation. Also prepare a Balance sheet:
i. Started business with cash Rs.60,000
ii. Rent received Rs.2,000
iii. Accrued interest Rs.500
iv. Commission received in advance Rs.1,000
v. Amount withdrawn Rs.5,000
[Hint : Capital = Opening Capital Rs.60,000 + Rent Received Rs.2,000 + Accrued Interest Rs.500 – Drawings Rs.5,000 = Rs.57,500]
Solution:

Question 12.
Prove that the Accounting Equation is satisfied in all the following transactions of Sameer Goel :
(i) Started business with cash Rs.10,000.
(ii) Paid rent in advance Rs.300.
(iii) Purchased goods for cash 5,000 and credit Rs.2,000.
(iv) Sold goods for cash Rs.8,000 costing Rs.4,000.
(v) Paid salary Rs.450 and salary outstanding being Rs.100.
(vi) Bought motorcycle for personal use Rs.3,000.
(KVS 1997)
Solution:

Question 13.
Show the Accounting Equation on the basis of the following transactions and present a Balance sheet on the last new equation balance:

Solution:


Question 14.
Raghunath had the following transaction in an accounting year:
i. Commenced business with cash Rs.50,000.
ii. Paid into bank Rs.10,000.
iii. Purchased goods for cash Rs.20,000 and credit Rs.30,000.
iv. Sold goods for cash Rs.40,000 costing Rs.30,000.
v. Rent paid Rs.500.
vi. Rent outstanding Rs.100.
vii. Bought furniture Rs.5,000 on credit.
viii. Bought refrigerator for personal use Rs.5,000.
ix. Purchased motorcycle for cash Rs.20,000.
Create an Accounting Equation to show the effect of the above transactions on his assets, liabilities and capital and also show his final Balance sheet.
Solution:


Question 15.
Prepare an Accounting Equation from the following:
i. Started business with cash Rs.50,000 and goods Rs.30,000.
ii. Purchased goods for cash 30,000 and on credit from Karan Rs.20,000.
iii. Goods costing Rs.40,000 were sold for Rs.55,000.
iv. Withdraw cash for personal use Rs.10,000.
v. Rent outstanding Rs.2,000.
(MSE Chandigarh)
Solution:

Question 16.
Show an Accounting Equation on the basis of the following transactions:
i. D. Mahapatra commenced business with cash Rs.1,50,000; goods Rs.60,000; machinery Rs.1,00,000 and furniture Rs.50,000.
ii. 1/3rd of the above goods sold at a profit of 10% on cost and half of the payment is received in cash.
iii. Depreciation on machinery provided @10%.
iv. Cash withdrawn for personal use 10,000.
v. Interest on drawings charged @5%.
vi. Goods sold to Gupta for Rs.10,000 and received a Bill Receivable for the same amount for 3 months.
vii. Received Rs.10,000 from Gupta against the Bills Receivable on its maturity.
[Hints:
1. Opening Capital Rs.3,60,000 = Cash Rs.1,50,000 + Stock Rs.60,000 + Machinery Rs.1,00,000 + Furniture Rs.50,000
2. Liabilities: Nil]
Solution:

Question 17.

Solution:

Question 18.
Create an Accounting Equation on the basis of the following transactions:
i. Commenced business with cash Rs.50,000, goods Rs.30,000 and furniture Rs.20,000.
ii. Sold goods to Ajay on credit costing Rs.4,000 for Rs.5,000.
iii. Sold goods for cash costing Rs.12,000 for Rs.16,000.
iv. Purchased goods for cash Rs.40,000.
v. Purchased goods on credit for Rs.20,000.
vi. Paid rent Rs.3,000 including Rs.2,000 in advance.
vii. Paid salaries Rs.2000.
viii. Sold goods costing Rs.8,000 for Rs.10,000.
ix. Salaries outstanding Rs.1,000.
x. Charge depreciation on furniture Rs.500.
Solution:


Question 19.
Prepare Accounting Equation from the following:
a. Started business with cash Rs.1,00,000.
b. Purchased goods for cash Rs.20,000 and on credit Rs.30,000.
c. Sold goods for cash costing Rs.10,000 and on credit costing Rs.15,000 both at profit of 20%.
d. Paid salaries Rs.8,000.
[Delhi 2012]
Solution:

Question 20.
Show the accounting equation on the basis of following transactions:
a. Ram started business with Rs.25,000.
b. Purchased goods from Shyam Rs.10,000.
c. Sold goods to Sohan costing Rs.1,500 for Rs.1,800.
[MSE Chandigarh 2015]
Solution:

Question 21.
If the capital of a business is Rs.3,00,000 and liabilities are Rs.50,000, loss 70,000, calculate the total assets of the business.
Solution:

Question 22.
If total assets of a business are Rs.1,30,000 and net worth is Rs.80,000, calculate the creditors.
[Hint: Net worth = Assets – Liabilities]
Solution:

Question 23.
A commenced his cloth business on 1^st April 2014 with a capital of Rs.30,000. On 31^st March 2015, his assets were worth Rs.50,000 and liabilities of Rs.10,000. Find out his closing capital and profits earned during the year.
Solution:

Question 24.
If capital of a business is Rs.1,40,000 and liabilities are of Rs.80,000, calculate the total assets of the business.
Solution:

Question 25.
Calculate the total assets if:
i. Capital is Rs.40,000.
ii. Creditors are Rs.25,000.
iii. Revenue during the period is Rs.50,000.
iv. Expenses during the period are Rs.40,000.
(Delhi 2001)
Solution:

Question 26.
a. A had a capital of Rs.75,000 on 1st April 2015. He had also goods amounting to Rs.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.
b. After a period of one month, he came to know that he had suffered a loss of Rs.1,700. He withdrew Rs.800 for his personal use. Find out his capital and assets of the business.
Solution:

Question 27.
a. Mohan started a business on 1^st April 2014 with a capital of Rs.10,000 and borrowed Rs.3,000 from a friend. He earned a profit ofRs.5,000 during the year ended 31^st march, 2013 and withdrew cash Rs.4,000 for private use. What is his capital on 31^st March, 2015?
b. Mahesh started a business with capital of Rs.15,000 on 1^st April, 2014. During the year he made a profit of Rs.3,000. He owes Rs.2,500 to suppliers of goods. What is the total of assets in his business on 31^st March, 2015?
Solution:

Question 28.
Mohan stared a business on 1^st April 2014 with a capital of Rs.25,000 and a loan of Rs.12,500 borrowed from Shyam. During 2014-15 he had introduced additional capital of Rs.12,500 and had withdrew Rs.7,500 for personal use. On 31^st March 2015 his assets were Rs.75,000. Find out his capital as on 31^st March,2015 and profit made or loss incurred during the year 2014 – 15.
Solution:

Question 29.
On 31^st March, 2015, the total assets and external liabilities were Rs.2,00,000 and Rs.6,000 respectively. During the year, the proprietor had introduced capital of Rs.20,000 and withdrawn Rs.12,000 for personal use. He made a profit of Rs.20,000 during the year.
Calculate the capital as on 1^st April, 2014.
Solution: