4 Marks Question

Question 14 Marks

$Y$ started a business on $1^{\text {st }}$ April, $2013$ with a Capital of $₹ 2,00,000$ and a loan of $₹ 75,000$ from the bank. During the year, he had introduced additional capital of $₹\ 60,000$ and had withdrawn $₹\ 36,000$ for personal purposes. On $31^{\text {st }}$ March, $2014$ his assets were ₹ $3,80,000$. Find out his Capital as on $31^{\text {st }}$ March, 2014 and profit earned during the year $2013-14.$

Answer

Opening Capital $($Capital as on $1^{st}$ April, $2013) = ₹ 2,00,000$
Calculation of Closing Capital (Capital as on March 31, 2014)
Assets $=$ Liabilities $+$ Capital
$3,80,000 = 75,000 +$ Capital
Capital $= ₹ 3,05,000$
Calculation of Profit Earned during the year
Closing Capital $=$ Opening Capital $+$ Additional Capital $+$ Profit $-$ Drawings
$3,05,000 = 2,00,000 + 60,000 +$ Profit $- 36,000$
$3,05,000 = 2,24,000 +$ Profit
Profit $= 3,05,000 - 2,24,000$
$= ₹ 81,000$

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Question 24 Marks

From the following transactions, state the nature of accounts and state the accounts which will be debited and credited:

Ganesh started business with Cash ₹ 2,00,000.
Purchased goods for Cash ₹ 60,000.
Sold goods for cash ₹ 75,000.
Purchased goods from Nakul on Credit for ₹ 80,000.
Sold goods to Bhushan on Credit for ₹ 50,000.
Paid Cash to Nakul ₹ 20,000.
Received Cash from Bhushan ₹ 10,000.
Paid salary ₹ 20,000.

Answer

	Transactions	Nature of Account
i.	Ganesh started business with cash	Cash A/c- Debit (Asset) Capital A/c- Credit (Liability)
ii.	Purchased goods for cash	Purchases- Debit (Expense) Cash A/c- Credit (Asset)
iii.	Sold goods for cash	Cash A/c- Debit (Asset) Sales A/c- Credit (Revenue)
iv.	Purchased goods from Nakul on credit	Purchases A/c- Debit (Expense) Nakul A/c- Credit (Liability)
v.	Sold goods to Bhushan on credit	Bhushan A/c- Debit (Asset) Sales A/c- Credit (Revenue)
vi.	Paid cash to Nakul	Nakul A/c- Debit (Liability) Cash A/c- Credit (Asset)
vii.	Received Cash from Bhushan	Cash A/c- Debit (Asset) Bhushan A/c- Credit (Asset)
viii.	Paid salary	Salary A/c- Debit (Expense) Cash A/c- Credit (Asset)

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Question 34 Marks

If in the above case, the proprietor had introduced fresh capital of ₹ $40,000$ and had withdrawn ₹ $10,000$ for personal purposes, calculate his profits.

Answer

Opening Capital (Capital as on $1^{st}$ April, $2011$) = ₹ $5,00,000$
Calculation of Closing Capital (Capital as on March 31, 2012)
Assets = Liabilities + Capital
8,00,000 = 1,00,000 + Capital
Capital = ₹ 7,00,000
Calculation of Profit Earned during the year
Closing Capital = Opening Capital + Additional Capital + Profit - Drawings
7,00,000 = 5,00,000 + 40,000 + Profit - 10,000
7,00,000 = 5,30,000 + Profit
= ₹ 1,70,000

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Question 44 Marks

Put the following on the proper side of Cash account, Debtor's account and Creditor's account:

Sold goods for cash ₹ 60,000.
Sold goods to Hari on credit ₹ 20,000.
Purchased goods from Krishan on credit ₹ 36,000.
Purchased goods from Krishan for cash ₹ 10,000.
Cash received from Hari ₹ 15,000.
Cash paid to Krishan ₹ 28,000.

Answer

Increase in Cash (being an asset) will be shown on the debit side and decrease in cash will be recorded on the credit side of the Cash Account.

Increase in Debtors (being an asset) will be shown on the debit side and decrease in them will be recorded on the credit side of the Debtors Account.

Increase in Creditors (being a liability) will be shown on the credit side and decrease in the creditors will be recorded on the debit side of the Creditors Account.

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Question 54 Marks

Prepare accounting equation from the following:

Started a business with cash ₹ 1,00,000 and goods worth ₹ 20,000.
Sold 50% of above goods at a profit of ₹ 2,000 on credit to Ram.
Rent paid ₹ 5,000.
Ram paid 50% of his balance in cash.

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Question 64 Marks

Yogesh commenced business on $1st$ April, $2011$ with a Capital of ₹ $5,00,000$ and a loan of ₹ $1,00,000$ borrowed from Citi Bank. On $31st$ March, $2012$, his assets were ₹ $8,00,000$. Calculate his closing capital and profits earned during the year.

Answer

Opening Capital (Capital as on $1^{st}$ April, 2011) = ₹ $5,00,000$
Calculation of Closing Capital (Capital as on March 31, 2012)
Assets = Liabilities + Capital
8,00,000 = 1,00,000* + Capital
Capital = ₹ 7,00,000
Calculation of Profit Earned during the year
Closing Capital = Opening Capital + Additional Capital + Profit - Drawings
7,00,000 = 5,00,000 + 0 + Profit - 0
Profit = 7,00,000 - 5,00,000
= ₹ 2,00,000
*It is assumed that loan borrowed from Citi Bank has not been paid till the end of the accounting year.

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Question 74 Marks

Prepare the Accounting Equation on the basis of the following:

Started business with cash ₹ 1,40,000 and Stock ₹ 2,50,000.
Sold goods (costing ₹ 50,000) at a profit of 25% on the cost.
Deposited into bank account ₹ 1,80,000.
Purchased goods from Mohan ₹ 80,000.

Answer

Working Note:
Calculation of Selling Price

Cost of Goods Sold	=	50,000
Add: Profit 25% of ₹ 50,000	=	12,500
$\therefore$ Sales	=	$\overline{62,500}$

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Question 84 Marks

Prepare Accounting Equation from the following:

Started business with Cash ₹ 2,00,000.
Purchased goods for Cash ₹ 60,000 and on Credit ₹ 1,50,000.
Sold goods for Cash costing ₹ 40,000 at a profit of 20% and on Credit costing ₹ 72,000 at a profit of 25%.
Paid for Rent ₹ 5,000.

Answer

Working Note:
Calculation of Selling Price of Goods Sold

Cost of Goods Sold	=	40,000
Add: Profit 20% of ₹ 40,000	=	8,000
$\therefore$ Selling Price for goods sold for cash	=	$\overline{48,000}$

Cost of Goods Sold	=	72,000
Add: Profit 25% of ₹ 72,000	=	18,000
$\therefore$ Selling Price for goods sold for credit	=	$\overline{90,000}$

Total profit = 8,000 + 18,000 = ₹ 26,000
Total Cost of Goods Sold = 40,000 + 72,000 = ₹ 1,12,00

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Question 94 Marks

Prepare Accounting Equation on the basis of the following transactions:

Started business with cash ₹ 70,000.
Credit purchase of goods ₹ 18,000.
Payment made to creditors in full settlement ₹ 17,500.
Purchase of machinery for cash ₹ 20,000.

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