Subject : Principles of Accounting Depertment : Management

Accounting equation
Problem-1
Mr. Samad is a veterinary, opened veterinary business in his home on May 1. On May 31, the
balance sheet Tk. 10,000, Accounts receivable Tk. 1,000, supplies Tk. 800. Office equipment Tk.
8,000, Accounts payable Tk 4.000 and Mr. Samad's capital Tk. 15,800. During June the following
transactions occurred June 1 Collected Tk. 300 of accounts receivable. [NU. BBA (Hons.)
Fin.-2017
June 2, Paid Tk. 500 cash on accounts payable.
3, Paid salaries Tk. 700, rent for June Tk. 800 and advertising expense Tk. 300.
4, Purchased additional office equipment for Tk. 3,100 paying Tk.400 in cash and the
balance on account
5, Earned fees of Tk. 10,000 of which Tk. 7,000 is paid in cash and the balance is due in
July
6, Withdrew Tk. 650 cash for personal use.
7, Received Tk. 11,000 from Janata Bank money borrowed on a notes payable.
8 incurred utility expenses for the month on account, Tk. 250.
Required:
1. You are required to show the effects of these transactions on accounting equation
2. Prove the accounting equation.
Problem-2
On January 1, 2001, Abdullah established Sundarbans Travel Agency. The following transactions
were completed during the month.
January
1, Invested cash to start the agency Tk. 3,00,000.
2, Pald cash for. January office rent Tk. 10,000.
5, Purchased office equipment for cash Tk. 25,000,
10, Incurred advertising costs, in the Daily Times, on accounts Tk. 10,000.
14, Purchased office supplies for cash Tk. 5,000
18, Earned for service rendered Tk. 30,000 (TK. 20,000 cash received from customers and
the balance Tk. 10,000 is billed to customers on accounts
20, Withdrew cash for personal use Tk. 6,000.
23 Paid the Daily Times amounts due on January 10.
25, Purchased additional office supplies on accounts Tk. 4,000.
31, Paid employees salaries Tk. 5,000.
31 Received in cash from customers who have previously' been billed on January 18,
31, Received cash from a new customer for services rendered Tk. 10,000.
31, Paid telephone, gas and electricity bils Tk. 3,000.

Atik Bhairabi - 01912677566 Page : 1

Required:
1. You are required to show the effects of these transactions on accounting equation
2. Prove the accounting equation.
Problem-3
After achieving L.L.M. degree Mr. Shaquid opened a law chamber on 1st August, 2016. On August
31, his account balances was cash Tk. 4,000, account receivable Tk. 1,500, supplies Tk. 500,
office equipment Tk.5,000, account payable Tk.4,200 and capital Tk. 4,000. During the month
August, the following transactions Occurred:
August
1, Collected Tk. 1,400 of account receivable.
2, Paid Tk. 2,700 in cash on accounts payable.
3, Earned revenue of Tk. 7,500 of which Tk. 3,000 is collected in cash.
4, Purchased additional equipment for Tk. 1,000 paying Tk. 400 in cash and the balance on
account.
5, Paid salaries Tk. 2,500 and rent for August Tk. 900.
12, Withdrew Tk. 550 cash for personal use.
20, Received TK. 2,000 from Rupali Bank money borrowed on a notes payable.
28, incurred utility expense for the month August on account Tk. 250.
Required:
1. You are required to show the effects of these transactions on accounting equation.
2. Prove the accounting equation.
Problem-4
From the following transactions prepare a Tabular analysis of transactions showing effect on
accounting equation. Transactions occurred in the books of Mr. Zaman:
(i) Started business bringing in Tk. 1,00,000 Cash, Inventory Tk. 2,00,000, Furniture Tk.
1,00,000 and Equipment Tk. 1,00,000
(ii) Purchase of goods on account Tk. 2,00,000.
(ill) Three month's rent Tk. 15,000 were paid in advance.
(iv) Sold goods for cash Tk. 1,00,000 (cost Tk. 80,000).
(v) Paid Tk. 1,80,000 in full settlement for transaction no (ii)
(vi) Sale of goods on credit Tk. 2,00,000 (cost Tk. 1,50,000).
(vii) Received cash from credit sales for transaction no (vi) less 10% discount,
(vii) One month's rent is to be treated as expense.

Atik Bhairabi - 01912677566 Page : 2

Problem-5
Show the effect on the accounting equation for the month of January, 2006 from the following
transactions: Rahim started business with cash Tk. 1,50,000. Purchased machinery Tk. 16,000 for
cash.
(i) Purchased merchandising inventory from Karim on credit Tk. 4,000
(ii) Purchased merchandising inventory by cash Tk. 25,000
(v) Merchandise sales Tk. 17,000 af which cost price Tk. 15,000.
(vi) Merchandise sales to Rahman on credit Tk. 15,000 of which cost price Tk. 12,000,
(vii) Salary paid Tk. 3,000.
(viii) Received from merchandising credit sales Tk. 9,000.
(ix) Bad debt allowance Tk. 1,000,
(x) Commission received Tk. 4,000.
Problem-6
Mr. Zahid passing Bachelor Degree in Medical Science started practice under firm's name "Zahid
Medical Centre" on June 1, 2015. During the first month, the following transactions occurred: June
2015
1, Capital Investment: Cash Tk. 1,50,000; Almira; Table, Chair Costing Tk. 1,00,000.
1, Paid rent for the month of June and July, 2015 Tk. 10,000.
2, Purchased medical equipment for cash Tk 50,000
4, Purchased medical supplies on account Tk. 10,000,
11, Service Revenue Received for cash Tk 60,000.
16, Billed patient Tk. 40,000 for treatment Service Rendered.
21, Cash Tk. 20,000 borrowed from a bank on a note payable,
25, Received Tk. 30,000 from the patient billed on June, 2015.
30, Received telephone bill for Tk. 5,000.
30, Paid salaries Tk. 10,000 and electricity bill Tk. 6,000
30, Medical supplies on hand Tk. 2,000.
Required:
You are required to show the effects of these transactions on accounting equation.
1. Prepare an income statement for the month of June
2. Owner's Equity Statement
3. Balance Sheet

Atik Bhairabi - 01912677566 Page : 3