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Bobby opened a consulting firm and completed these transactions during November, 2017: (a) Invested ₹ 4,00,000 cash and office equipment with ₹ 1,50,000 in a business called Bobbie Consulting - Bzziii
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Bobby opened a consulting firm and completed these transactions during November, 2017:
(a) Invested ₹ 4,00,000 cash and office equipment with ₹ 1,50,000 in a business called Bobbie Consulting. (b) Purchased land and a small office building. The land was worth ₹ 1,50,000 and the building worth ₹ 3,50,000. The purchase price was paid with ₹ 2,00,000 cash and a long-term note payable for ₹ 3,00,000.
(c) Purchased office supplies on credit for ₹ 12,000
(d) Bobbie transferred title of motor car to the business. The motor car was worth ₹ 90,000.
(e) Purchased for ₹ 30,000 additional office equipment on credit.
(f) Paid ₹ 75,00 salary to the office manager
(g) Provided services to a client and collected ₹ 30,000
(h) Paid ₹ 4,000 for the month’s utilities.
(i) Paid supplier created in transaction c.
(j) Purchase new office equipment by paying ₹ 93,000 cash and trading in old equipment with a recorded cost of ₹ 7,000.
(k) Completed services of a client for ₹ 26,000. This amount is to be paid within 30 days
(l) Received ₹ 19,000 payment from the client created in transaction k
(m) Bobby withdrew ₹ 20,000 from the business.
Analyse the above stated transactions and open the following T-accounts:
Cash, client, office supplies, motor car, building, land, long-term payables, capital, withdrawals, salary, expense and utilities expense.
(a) Anaylsis of Transaction The exchange builds money and office gear on one hand and increment capital then again. Expansion in resources is charged and expansion in capital is credited. Henceforth, the exchange will be recorded with charge the money and office hardware and credit the capital
Office Equipment A/c
Dr.
Cr.
(a) 1,50,000
Cash A/c
Dr.
Cr.
(a) 4,00,000
Capital A/c
Dr.
Cr.
(a) 1,50,000
(a) 4,00,000
Total
5,50,000
(b)Analysis of Transaction This exchange expands resources on one hand and increment liabilities on another hand. Expansion in resources is charged and expansion in liabilities is credited. the workplace supplies will be charged and loan bosses will be credited.
Land A/c
Dr.
Cr.
(b)1,50,000
Building A/c
>
Dr.
Cr.
(b)3,50,000
Cash A/c
Dr.
Cr.
(a)4,00,000
(b) 2,00,000
Note Payable A/c
Dr.
Cr.
(b) 8,00,000
(c) Analysis of Transaction This transaction increases assets on one hand and increase liabilities on another hand. Increase in assets is debited and increase in liabilities is credited. The office supplies will be debited and creditors will be credited.
Office Supplies A/c
Dr.
Cr.
(c) 12,000
Creditor’s A/c
Dr.
Cr.
(c) 12,000
(d) Analysis of Transaction The Transaction builds engine vehicle on one hand and expands capital on other hand. Expansion in resources is charged and expansion in capital is credited. The exchange will be recorded as charge the engine vehicle and credit the increment in capital.
Motor car
Dr.
Cr.
(d)90,000
Capital A/c
Dr.
Cr.
(a)5,50,000
(d)90,000
(e) Analysis of Transaction The Transaction increases office equipment assets on one side and creditors as liabilities on other side. Increase in assets is debited and increase in liabilities is credited.
Office Equipment A/c
Dr.
Cr.
(a) 1,50,000
(e) 30,000
Creditor’s A/c
Dr.
Cr.
(c) 12,000
(e) 30,000
(f) Analysis of Transaction The installment of pay is a cost which diminishes capital hence, are recorded as charge. Credit money to record decline in resources.
Salary A/c
Dr.
Cr.
(e) 7,500
Cash A/c
Dr.
Cr.
(a)4,00,000
(b) 2,00,000
(f) 7,500
(g) Analysis of Transaction The exchange will build resources cash on one side and increment income on the opposite side. Expansion in resources money will be charged and for expansion in income Service record will be credited.
Cash A/c
Dr.
Cr.
(a) 4,00,000
(b)2,00,000
(g) 30,000
(e) 75,000
Service A/c
Dr.
Cr.
(g) 30,000
(h) Analysis of Transaction The instalment of month's liabilities is a cost which decline capital and recorded as charge and record cash as credit to record decline in resources.
Cash A/c
Dr.
Cr.
(a) 4,00,000
(b) 2,00,000
(g) 30,000
(e) 75,000
(h) 4,000
Month’s Utilities Expenses A/c
Dr.
Cr.
(h) 4,000
(i) Analysis of Transaction This exchange diminishes the asstes and furthermore diminishes the liabilities. Record decline in resources case will be credited and decline in liabilities Creditors' record will be charged.
Cash A/c
Dr.
Cr.
(a) 4,00,000
(b) 2,00,000
(g) 30,000
(e) 75,000
(h) 4,000
(i) 12,000
Creditor’s A/c
Dr.
Cr.
(i) 12,000
(c) 12,000
(e) 30,000
(j) Analysis of Transaction In this exchange, one resources office gear is increasng and diminishing. The expanded expense of gear will be recorded as charge and diminished expense of hardware is recorded as credit. Then again, contrast sum paid with money will be decline the resources and recorded in credit side.
Office Equipment A/c
Dr.
Cr.
(a) 1,50,000
(j)7,000
(e) 30,000
(j) 1,00,000
Cash A/c
Dr.
Cr.
(a) 4,00,000
(b) 2,00,000
(g) 30,000
(e) 75,000
(h) 4,000
(i) 12,000
(j) 93,000
(k) Analysis of Transaction This transaction increase assets on one side and increase in capital on the other side. Increase in assets Client account will be debited and to records increase in capital Service account will be credited.
Salary A/c
Dr.
Cr.
(k) 26,000
Cash A/c
Dr.
Cr.
(k) 26,000
(l) Analysis of Transaction In this exchange, one resource cash is expanding and recorded as charge and one more resources customer is diminishing recorded as credit.
Cash A/c
Dr.
Cr.
(a) 4,00,000
(b) 2,00,000
(g) 30,000
(e) 75,000
(l) 19,000
(h) 4,000
(i) 12,000
(j) 93,000
Client A/c
Dr.
Cr.
(k) 26,000
(l) 19,000
(m) Analysis of Transaction In this transaction, asset is decreasing one side cash will be credited to record the transaction and capital on the other side is decreasing will be recorded as debit side.
Himanshu withdrews Rs 2,500 at the end Month of each month. The Partnership deed provides for charging the interest on drawings @ 12% p.a. Calculate interest on Himanshu’s drawings for the year ending 31st December, 2017 SOLUTION Calculations for Himanshu's Total Drawing = Rs 2,500 × 12 = Rs 30,000 Interest on Drawing = Total Drawings `\times` `"Rate"/"100"` `\times` `frac{11}{2\times12}` = Rs. 30,000 `\times` `"Rate"/"100"` `\times` `frac{11}{2\times12}` = RS. 1,650 Chapter-2 Partnership Basic: Accounts 18 19 20 21 22
NUMERICAL QUESTION 1.Triphati and Chauhan are partners in a firm sharing profits and losses in the ratio of 3:2. Their capitals were Rs 60,000 and Rs 40,000 as on January 01, 2015. During the year they earned a profit of Rs 30,000. According to the partnership deed both the partners are entitled to Rs 1,000 per month as Salary and 5% interest on their capital. They are also to be charged an interest of 5% on their drawings, irrespective of the period, which is Rs 12,000 for Tripathi, Rs 8,000 for Chauhan. Prepare Partner’s Accounts when, capitals are fixed. SOLUTION 2. Anubha and Kajal are partners of a firm sharing profits and losses in the ratio of 2:1. Their capital, were Rs 90,000 and Rs 60,000. The profit during the year were Rs 45,000. According to partnership deed, both partners are allowed salary, Rs 700 per month to Anubha and Rs 500 per month to Kajal. Interest allowed on capital @ 5% p.a. The drawings at the end of the period were Rs 8,500 for Anubha and Rs 6,500 for Kajal. ...
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