Page 36 - ISCDEBK-XI

6.2 Double Entry Book Keeping—ISC XI

Solved Questions

Illustration 1.
X has following assets and liabilities as on 31st March, 2022. Ascertain his capital.
Cash ` 25,000; Bank ` 47,500; Debtors ` 18,000; Creditors ` 22,000; Plant and Machinery ` 80,000;
Building ` 2,00,000; Furniture ` 24,000; Bills Receivable ` 56,500; Bills Payable ` 23,500.
Solution: Assets = Liabilities + Capital
Or
Capital = Assets – Liabilities
= (Cash + Bank + Debtors + Plant and Machinery + Building +
Furniture + Bills Receivable) – (Creditors + Bills Payable)
= ` (25,000 + 47,500 + 18,000 + 80,000 + 2,00,000 + 24,000 +
56,500) – ` (22,000 + 23,500)
= ` 4,51,000 – ` 45,500 = ` 4,05,500.
Illustration 2.
Show the effect of following transactions on the accounting equation:
(i) Ram commenced business with cash ` 15,00,000, Bank Balance ` 7,50,000 and Bank
Loan ` 2,00,000.
(ii) Purchased Car for ` 1,30,000 by paying ` 85,000 in cash and balance at a later date.
(iii) Purchased 300 chairs @ ` 700 each from XYZ Ltd.
(iv) Purchased 2 tables @ ` 5,000 each to be used in his showroom and paid by cheque.
(v) Payment made to XYZ by cheque in full settlement after receiving 20% discount.
(vi) Paid commission ` 24,000. 20% is for current year.
Solution: Refer to Page No. 6.3.
Illustration 3.
Show the effect of following transactions on the accounting equation:
(i) Mr. Y started business with cash ` 4,00,000, Machinery ` 25,000, Furniture ` 15,000
and a loan of ` 1,75,000.
(ii) He purchased goods of ` 1,00,000 from M/s XYZ. Traders who are willing to give cash
discount of 5%, if payment was made within 1 month.
(iii) Furniture is now valued at 75%.
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(iv) Sold goods of list price ` 20,000 at a profit of 33 % on cost price to Mr. Aman. He
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accepted a bill for 1/5th of the amount due and paid the remaining amount.
(v) Purchased Investment (Personal) of ` 5,000.
(vi) Paid instalment of Loan of ` 25,000 including interest on Loan of ` 3,000.
(vii) Paid Life Insurance premium for 8 months of ` 16,000.
(viii) Paid rent ` 15,000 and security deposit to landlord ` 50,000.
(ix) Charge interest on drawings ` 4,000.

Solution: Refer to Page No. 6.4.