Professional Documents
Culture Documents
Equation
Equation
2.
3.
4.
5.
6.
7.
8.
9.
Accounting Equation
Assets
Furniture
Equities
Machinery
A/C Receivables
A/C Payable
O.E
S. No
Cash
100,000
100,000
Bal
100,000
100,000
(2000)
2,000
Bal
98,000
2,000
3
Bal
98,000
(20,000)
Bal
78,000
6,000
Bal
84,000
2,000
100,000
10,000
10,000
10,000
10,000
(20,000)
2,000
10,000
10,000
84,000
2,000
10,000
2,000
10,000
10,000
86,000
4,000
(4000)
14,000
82,000
2,000
7
Bal
84,000
(7,000)
Bal
77,000
(4,000)
Bal
73,000
Total
80,000
6,000
6
Bal
100,000
2,000
10,000
2,000
2,000
14,000
84,000
(7,000)
2,000
10,000
2,000
14,000
77,000
(4,000)
2,000
10,000
2,000
14,000
73,000
Rs. 87,000
Rs. 87,000
2
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Unit 1
AE # 1.2 Ali Ahmed Khan is wholesale trader; following transactions are record in Accounting Equation.
i. Commence business with cash Rs. 200,000 and Land Rs. 50,000.
ii. Bought merchandising for cash Rs. 80,000.
iii. Cash sales of worth Rs. 25,000.
iv. Bought goods on credit from Salman of worth Rs. 50,000.
v. Sales on account to Karim Rs. 12,000.
vi.
Accounting Equation
Assets
Equities
S. No
Cash
Land
A/C Receivables
Furniture
200,000
50,000
25,000
Bal
200,000
50,000
250,000
ii
(80,000)
Bal
120,000
iii
25,000
Bal
145,000
145,000
50,000
170,000
25,000
50,000
195,000
50,000
50,000
(50,000)
50,000
145,000
12,000
v
Bal
145,000
vi
(5,000)
Bal
140,000
vii
10,000
Bal
150,000
viii
1,500
Bal
151,500
ix
(3,000)
Bal
148,500
Total
O.E
(80,000)
iv
Bal
A/C Payable
50,000
12,000
12,000
50,000
157,000
5,000
50,000
157,000
5,000
50,000
157,000
50,000
157,000
1,500
(4,500)
51,500
152,500
5,000
50,000
12,000
(10,000)
50,000
2,000
(1,500)
50,000
50,000
2,000
3,500
2,000
3,500
Rs. 204,000
Rs. 204,000
3
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Unit 1
AE # 1.3 Selected Transactions from Shah Transport Services began on June 1, 2005 by Zahid Shah as
a.
b.
c.
d.
A bill of Rs. 7,200 for transporting goods was sent to Mr. Ashraf Abbasi, a customer.
e.
Cash of Rs. 6,000 is received form the customer who was billed in d.
f.
g.
Equipment of Rs. 1,200 was withdrawn from business for Zahid Shahs personal use.
Required
Arrange the Assets, Liabilities and Owners Equity accounts in an Accounting Equation, using the following account titles:
Cash, Trucks, Equipment, Account Receivables, Account Payable and Owners Equity.
Accounting Equation
Assets
Cash
S. No
a
Bal
b
Bal
c
Bal
d
Bal
e
Bal
f
Bal
g
Bal
h
Bal
i
Bal
600,000
600,000
(430,000)
170,000
170,000
Truck
Equities
Equipment
A/C Receivables
A/C Payable
430,000
430,000
430,000
600,000
9,000
9,000
9,000
9,000
170,000
6,000
176,000
22,300
198,300
(5,000)
193,300
(1,700)
191,600
430,000
9,000
430,000
9,000
7,200
7,200
(6,000)
1,200
430,000
9,000
1,200
430,000
9,000
1,200
9,000
(5,000)
4,000
430,000
1,200
4,000
191,600
430,000
9,000
(1,200)
7,800
1,200
4,000
Total
O.E
600,000
600,000
Rs. 630,600
9,000
9,000
600,000
7,200
607,200
607,200
22,300
629,500
629,500
(1,700)
627,800
(1,200)
626,600
Rs. 630,600
4
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Unit 1
AE # 1.4
Prove that the Accounting Equation is satisfied in all following transactions of Jamil Ahmed
II.
III.
Purchased merchandising inventory for cash Rs. 80,000 and on account Rs. 20,000.
IV.
V.
VI.
VII.
VIII.
Jamil Ahmed
Accounting Equation
Assets
S. No
Cash
500,000
Bal
500,000
Prepaid Rent
(6,000)
Bal
494,000
6,000
Bal
414,000
IV
(100,000)
Bal
314,000
30,000
Bal
344,000
M. Securities
A/C Payables
500,000
100,000
6,000
20,000
100,000
20,000
500,000
20,000
500,000
100,000
6,000
100,000
100,000
(20,000)
6,000
10,000
80,000
100,000
20,000
(2,000)
VI
Bal
344,000
VII
(1,000)
Bal
343,000
VIII
4,000
Bal
347,000
Total
O.E
500,000
II
(80,000)
Inventory
500,000
6,000
III
Equities
4,000
510,000
(2,000)
80,000
100,000
20,000
508,000
(1,000)
4,000
80,000
100,000
20,000
507,000
4,000
4,000
80,000
100,000
Rs. 531,000
20,000
511,000
Rs. 531,000
5
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Unit 1
AE # 1.5 Adil Ahmed had the following transactions. Use accounting equation to show their effect on his
Assets, Liabilities, and Capital:
a) Invested Rs. 15,000 in cash.
b) Purchased securities for cash Rs. 7,500.
c)
Purchased a home for Rs. 15,000: giving Rs. 5,000 in cash and the balance through loan account.
f)
Adil Ahmed
Accounting Equation
Assets
Securities
Equities
Home
Car
Loan
O.E
S. No
Cash
a)
15,000
15,000
Bal
15,000
15,000
b)
(7,500)
7,500
Bal
7,500
7,500
c)
(5000)
Bal
2,500
7,500
d)
1500
(1,000)
Bal
4,000
6,500
e)
(2,800)
Bal
1,200
f)
3,600
Bal
4,800
g)
(800)
Bal
4,000
h)
(300)
Bal
3,700
i)
200
Bal
3,900
Total
15,000
15,000
10,000
15,000
10,000
15,000
500
15,000
10,000
15,500
10,000
15,500
2,800
6,500
15,000
2,800
3,600
6,500
6,500
15,000
15,000
2,800
2,800
10,000
19,100
(500)
(300)
9,500
18,800
(300)
6,500
15,000
2,800
9,500
18,500
200
6,500
15,000
Rs. 28,200
2,800
9,500
18,700
Rs. 28,200
6
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Unit 1
AE # 1.6 Sameena after receiving her degree in computer science, begin her own business called Sameena
Computer Services. She completed the following transactions soon after starting the business.
a) Sameena began her business with Rs. 90,000 cash investment and system library which cost is Rs. 200,000.
b) Paid Rs. 5,000 as one months rent of office.
c) Purchase a computer of Rs. 20,000.
d) Purchase computer components on credit Rs. 6,000.
e) Develop software and collected revenue form client Rs. 15,000.
f) Billed a client Rs. 1,000 upon completion of a composing assignment.
g) Paid expenses Rs. 1,500.
h) Paid Rs. 5,000 amount owed on computer components.
i)
Required
Arrange the Assets and Equities in Balance Sheet Equation using following account title: Cash, S. Library, Computer, C.
Components, A/C Receivables, A/C Payable and O.E.
Accounting Equation
Assets
Computer
Equities
S. No
Cash
S. Library
C. Components
A/C Receivables
A/C Payable
a
Bal
b
Bal
c
Bal
d
Bal
e
Bal
90,000
90,000
(5,000)
85,000
(20,000)
65,000
200,000
290,000
200,000
290,000
(5,000)
200,000
285,000
200,000
20,000
6,000
6,000
65,000
15,000
80,000
200,000
20,000
6,000
6,000
285,000
15,000
200,000
20,000
6,000
6,000
f
Bal
g
Bal
300,000
1,000
80,000
(1,500)
78,500
200,000
20,000
6,000
1,000
6,000
301,000
(1,500)
200,000
20,000
6,000
1,000
299,500
h
Bal
i
Bal
(5,000)
73,500
800
74,300
6,000
(5000)
200,000
20,000
6,000
1,000
(800)
1,000
299,500
200,000
20,000
6,000
200
1,000
299,500
20,000
285,000
1,000
Total
O.E
Rs. 300,500
Rs. 300,500
7
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Unit 1
AE # 1.7 On 1st January, 2009 the balances of Khan Bros. are as follows
Assets
Equities
Cash . 25,000
Debtor .. 17,000
Inventory.. 22,000
Building 70,000
Total
Creditor 40,000
Capital ....... 94,000
Rs. 134,000
Rs. 134,000
Khan Bros
Accounting Equation
Assets
S. No
Bal
Cash
25,000
(3,600)
Bal
21,400
5
Bal
7
Bal
9
Bal
11
Bal
15
Bal
18
Bal
22
Bal
30
Bal
12,000
33,400
(25,000)
8,400
5,000
13,400
(2,000)
11,400
14,000
25,400
(1,000)
24,400
24,400
24,400
Total
Debtor
17,000
Equities
Inventory
22,000
Building
70,000
Creditor
40,000
Capital
94,000
94,000
3,600
17,000
25,600
70,000
40,000
17,000
(10,500)
15,100
70,000
15,100
(6,000)
9,100
1,900
11,000
70,000
40,000
(25,000)
15,000
70,000
15,000
70,000
15,000
11,000
70,000
15,000
6,000
11,000
15,000
6,000
(700)
5,300
11,000
70,000
(1,400)
68,600
11,000
68,600
15,000
17,000
3,000
20,000
20,000
(14,000)
6,000
Rs. 109,300
15,000
1,500
95,500
95,500
2,000
97,500
(100)
97,400
97,400
(1,000)
96,400
(1,400)
95,000
(700)
94,300
Rs. 109,300
8
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Unit 1
AE # 1.8
Hassan brothers engage in a service business completed the following selected transactions
during June 2009.
2009
June 2
5
7
12
15
20
22
25
28
30
31
Received cash from the owner Rs. 20,000 and equipment Rs. 8,000
Purchase supplies on account Rs. 3,000.
Return defective supplies purchased on account Rs. 1,000
Charged customers for services sold on account Rs. 12,000
Paid utilities expenses Rs. 1,500.
Paid to a creditor on account Rs. 500.
Received cash on account from charged customers Rs. 7,000.
Hassans drawings Rs. 5,000.
Depreciation expense estimated on equipment at the rate of 5% by WDM.
Salaries expenses outstanding at the end of month Rs. 2,100.
Cost of supplies on hand at the end of the month Rs. 1,200.
Using following heads of accounts for above mentioned transactions. Cash, Equipment, Supplies, Account Receivable,
Salary Payable, Account Payable and O.E
Hassan Brothers
Accounting Equation
Assets
S. No
June 2
Cash
20,000
Equipment
8,000
Bal
20,000
8,000
20,000
8,000
20,000
8,000
5
Bal
7
Bal
Equities
Supplies
15
Bal
20
Bal
22
Bal
25
Bal
3,000
3,000
(1,000)
2,000
3,000
3,000
(1,000)
2,000
28,000
12,000
40,000
(1,500)
38,500
2,000
8,000
2,000
12,000
8,000
2,000
8,000
2,000
12,000
(7,000)
5,000
2,000
5,000
1,500
20,000
8,000
(400)
7,600
2,000
5,000
1,500
20,000
7,600
5,000
1,500
2,100
2,100
20,000
7,600
2,000
(800)
1,200
5,000
1,500
2,100
31
Bal
Total
O.E
28,000
28,000
8,000
20,000
(1,500)
18,500
(500)
18,000
7,000
25,000
(5,000)
20,000
2,000
2,000
(500)
1,500
Rs. 33,800
38,500
1,500
30
Bal
S. Payable
12,000
12,000
28
Bal
A/P
28,000
12
Bal
A/R
38,500
(5,000)
33,500
(400)
33,100
(2,100)
31,000
(800)
30,200
Rs. 33,800
9
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Unit 1
AE # 1.9 Following Transactions are related to Brother Corporation. You are required to make Equation.
Opening Balances
Inventory. 23,000
Furniture .. 10,000
Bank . 25,000
Cash 40,000
Debtors . 17,000
1.
Received dividend on marketable securities by bank of Rs. 500 and sold marketable securities of Rs. 1,000 by cash.
2.
Defective inventory returned to vendor of Rs. 7,000 who reduced account payable and paid carriage expense of Rs.
2,000.
3.
Obtained a bank loan of Rs. 13,000 by cash and paid Rs. 5,000 to creditor by bank.
4.
Paid Rent for 2 years of worth Rs. 6,000 by cash and received commission of worth Rs. 500 by bank.
5.
Payment made for furniture purchased for owner domestic use for Rs. 3,000 by bank.
6.
Goods return by cash customer of Rs. 2,500 which cost Rs. 2,100.
7.
Sold goods on account of Rs. 7,500 and by cash Rs. 2,500 which cost was Rs. 8,000.
Brother Corporation
Accounting Equation
Assets
S. No
Cash
A/C Rec
Stock
Furniture
Bal
40,000
17,000
23,000
10,000
1,000
Bal
41,000
(2,000)
Bal
39,000
13,000
Bal
52,000
(6,000)
Bal
46,000
17,000
23,000
Equities
P. Rent
10,000
Bank
M. Sec
Creditors
25,000
5,000
30,000
500
(1,000)
25,500
4,000
(7,000)
17,000
16,000
10,000
25,500
4,000
(5,000)
17,000
17,000
16,000
16,000
10,000
10,000
20,500
6,000
500
6,000
21,000
4,000
B. Loan
90,000
500
30,000
90,500
(7,000)
(2,000)
23,000
88,500
(5,000)
13,000
18,000
13,000
46,000
(2,500)
Bal
43,500
17,000
18,100
2,500
7,500
(8,000)
Bal
46,000
24,500
10,100
Total
17,000
16,000
10,000
6,000
18,000
88,500
500
4,000
18,000
13,000
(3,000)
Bal
Capital
89,000
(3,000)
4,000
18,000
13,000
2,100
86,000
(400)
10,000
6,000
18,000
4,000
18,000
13,000
85,600
2,000
10,000
6,000
18,000
Rs. 118,600
4,000
18,000
13,000
87,600
Rs. 118,600
10
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Unit 1
AE # 1.10 On November 1, ABC Company started the business by depositing Rs. 80,000 in a bank.
Nov.8
Purchased a building for Rs. 36,000, paying Rs. 6,000 by bank and issuing a note payable for balance.
Nov.12
Nov. 16 Cash withdrawal of Rs. 10,000 for business purpose and retained as cash account.
Nov.19
Nov.20
Sold some inventory on account of Rs. 7,500 which cost was Rs. 2,800 collectible within 45 days.
Nov.21
Nov.23
Sold some of the tools at a price equal to their cost, 1,500 and received amount through bank.
Nov 25
Nov.29
Received cash Rs. 3,500 in partial collection of the account receivable from the sale of inventory Nov. 20.
Nov. 30
ABC Company
Accounting Equation
Assets
S. No
Nov 1
Bal
8
Bal
Bank
80,000
Building
80,000
(6,000)
36,000
74,000
36,000
16
36,000
13,800
19
64,000
(3,000)
61,000
36,000
Bal
13,800
13,800
80,000
10,000
30,000
13,800
80,000
10,000
3,000
30,000
13,800
80,000
7,500
4,700
36,000
11,000
10,000
(2,000)
3,000
7,500
30,000
13,800
(2,000)
84,700
61,000
1,500
36,000
11,000
8,000
3,000
(1,500)
7,500
30,000
11,800
84,700
62,500
36,000
11,000
8,000
1,500
7,500
30,000
11,800
84,700
(1,000)
(1,000)
62,500
36,000
10,000
8,000
3,500
1,500
7,500
(3,500)
30,000
10,800
84,700
62,500
36,000
10,000
(500)
11,500
1,500
4,000
30,000
10,800
84,700
(500)
62,500
36,000
9,500
11,500
1,500
4,000
30,000
10,800
84,200
31
Bal
30,000
61,000
29
Bal
80,000
13,800
(2,800)
25
Bal
O.E
80,000
3,000
21
23
A/P
10,000
20
Bal
N/P
30,000
13,800
Bal
A/R
13,800
36,000
Bal
Tools
30,000
74,000
(10,000)
Bal
Equities
Cash
80,000
12
Bal
Inventory
Total
Rs. 125,000
Rs. 125,000
11
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Unit 1
AE # 1.11 Following Transactions are related to M.A Industries. You are required to make Equation.
1.
Muhammad Ali owner of Muhammad Ali Industries started business by depositing Rs. 180,000 in company bank
account, Stock Rs. 20,000 and Cash in hand Rs. 50,000
2.
Purchased Land for Rs. 40,000 by issuance of check and Furniture Rs. 7,000 by issuance of Note Payable.
3.
Sold part of land at a price Rs. 20,000 equal to cost Rs. 8,000 collectable within three months by Note receivable
4.
Purchased inventory on credit for Rs. 5,500 and by check Rs. 4,500.
5.
Received Rs. 1,500 cash on collection of note receivable and paid Rs. 2,000 by bank on account of note payable.
6.
Purchase Marketable securities of total cost of Rs. 25,000 paid 20,000 by bank and Rs. 5,000 by cash account.
7.
Paid rent Expenses Rs. 3,000, Salaries Expenses Rs. 1,000 and withdrawal of cash by owner of Rs. 2,500.
8.
Received dividend on securities by bank of Rs. 1,500 and sold marketable securities of Rs, 8,000 by cash.
M. A Industries
Accounting Equation
Assets
S. No
Bank
Stock
Cash
180,000
20,000
50,000
250,000
Bal
180,000
20,000
50,000
250,000
(40,000)
Bal
140,000
20,000
50,000
Land
Equities
Fur.
N/R
140,000
20,000
(4,500)
10,000
Bal
135,500
30,000
(2,000)
Bal
133,500
(20,000)
Bal
113,500
50,000
7,000
7,000
40,000
7,000
7,000
32,000
7,000
250,000
7,000
262,000
5,500
50,000
32,000
7,000
51,500
32,000
7,000
20,000
7,000
46,500
5,500
262,000
(1,500)
(2,000)
18,500
5,000
5,500
262,000
5,000
5,500
262.000
25,000
32,000
7,000
18,500
25,000
(6,500)
Bal
113,500
1,500
Bal
115,000
Total
30,000
40,000
(6,500)
32,000
7,000
18,500
8,000
30,000
O.E
12,000
20,000
(5,000)
30,000
A/P
20,000
1,500
30,000
N/P
40,000
(8,000)
Bal
M. sec
48,000
25,000
5,000
5,500
255,500
(8,000)
32,000
7,000
18,500
Rs. 267,500
17,000
1,500
5,000
5,500
257,000
Rs. 267,500
12
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