Accounting Equation Problem and Solution Exam Based

 

 

Here, Amount = Rs = $ = £ = € = ₹ = Af = ৳ = Nu = Rf = රු = 

 

MIXED PROBLEM: 2

GL Company has following information:

(a) Business started with cash Rs 500,000 and machinery Rs 300,000.

(b) Goods purchase from SL Traders Rs 125,000.

(c) Goods sold costing Rs 90,000 for Rs 130,000 to Rajani.

(d) Rent payable Rs 15,000.

Required: Accounting equation

[Answer: Assets = Rs 965,000; Capital = Rs 825,000; Liabilities = Rs 140,000]

 

SOLUTION:

Explanation:      

(a) Cash and machinery increases assets; they also increase capital.

(b) Goods (stock) purchased from SL Traders is credit transaction; it increases stock (assets) and creditor (liabilities).

(c) Goods sold to Rajani is credit transaction. It decreases stock by 90,000; it increases debtor (Rajani) by 130,000; profit 40,000 increases capital.

(d) Rent payable mean not paid; it is expenses and liabilities. It increases liabilities but decreases capital. 

                   

MIXED PROBLEM: 3

JK Traders has following information:

(a) Business started with cash Rs 200,000 and equipment Rs 50,000.

(b) Goods purchase worth Rs 80,000 from MK Suppliers and paid Rs 30,000 only.

(c) Goods sold costing Rs 60,000 for Rs 90,000 to Manju and received Rs 50,000 partially.

(c) Salary paid Rs 10,000 and payable Rs 5,000.

Required: Accounting equation

[Answer: Assets = Rs 320,000; Capital = Rs 265,000; liabilities = Rs 55,000]

 

SOLUTION:

Explain:

(a) Cash and equipment increases assets, they also create equal capital.

(b) Goods purchased increases stock by 80,000 but decreases cash by 30,000; remaining 50,000 is credit, it increases creditor.

(c) 60,000 decreases stock; 50,000 increases cash; remaining 40,000 increases debtor. Profit 30,000 increases capital.

(d) Salary 10,000 decreases cash, outstanding 5,000 increases liabilities. 15,000 decreases capital. 

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BASIC JOURNAL ENTRIES IN NEPALI http://tiny.cc/uaakkz

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PROBLEMS AND ANSWERS

 

PROBLEM: 3

Sujata Enterprises has following extracted information:

(a) Business started with cash Rs 150,000 and stock Rs 170,000.

(b) Goods sold costing Rs 90,000 for Rs 120,000.

(c) Goods worth Rs 5,000 and cash Rs 2,000 taken by proprietor for personal use.

(d) Wage payable Rs 15,000.

Required: Accounting equation

[Answer: Assets = Rs 343,000; Capital = Rs 328,000; Liabilities = Rs 15,000]

 

PROBLEM: 4

MK Suppliers has following extracted information:

(i) Business started with cash Rs 350,000.

(ii) Goods purchase worth Rs 250,000 from GK Traders and paid only Rs 150,000. 

(iii) Invested Rs 50,000 is shares.

(iv) Goods destroyed by fire worth Rs 5,000.

Required: Accounting equation

[Answer: Assets = Rs 445,000; Capital = Rs 345,000; Liabilities = Rs 100,000]

 

 

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