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Kanchan commenced business of selling bicycle on April 1,2017 with a capital of rupees 12.5 lakh.It entered into an agreement with health accosricise to sell the bicycle,purchased from them on one month credit basis. Kanchan acquired during the year, following assets for which the payments were made through bank: Land Amount-3,75,000 Building. 6,25,000 Office equipments 60,000 Furniture and fittings 65,000?
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Kanchan commenced business of selling bicycle on April 1,2017 with a c...
Explanation of Transactions and Events in Kanchan's Business
Capital Investment:
- Kanchan started the business on April 1, 2017, with a capital of Rs. 12.5 lakh.
Credit Purchase:
- Kanchan entered into an agreement with Health Accosricise to sell the bicycle, purchased from them, on a one-month credit basis.
Bank Payments for Asset Acquisition:
- During the year, Kanchan acquired the following assets for which payments were made through bank:
- Land - Rs. 3,75,000
- Building - Rs. 6,25,000
- Office Equipments - Rs. 60,000
- Furniture and Fittings - Rs. 65,000
Explanation of Accounting Treatment
Capital Investment:
- The capital investment of Rs. 12.5 lakh will be recorded as a liability under the head 'Capital' in the balance sheet.
Credit Purchase:
- The purchase of bicycles from Health Accosricise will be recorded as a liability under the head 'Sundry Creditors' in the balance sheet until the payment is made.
Bank Payments for Asset Acquisition:
- The acquisition of land, building, office equipment, and furniture and fittings will be recorded as assets under the respective heads in the balance sheet.
- The payment made through bank will be recorded as a decrease in the bank balance under the head 'Bank' in the balance sheet.
- Depreciation will be charged on the assets over their useful life and will be recorded as an expense in the income statement.
Conclusion:
The above transactions and events in Kanchan's business have been explained along with their accounting treatment. These transactions will be recorded in the balance sheet and income statement, which will help in determining the financial position and profitability of the business.
Capital Investment:
- Kanchan started the business on April 1, 2017, with a capital of Rs. 12.5 lakh.
Credit Purchase:
- Kanchan entered into an agreement with Health Accosricise to sell the bicycle, purchased from them, on a one-month credit basis.
Bank Payments for Asset Acquisition:
- During the year, Kanchan acquired the following assets for which payments were made through bank:
- Land - Rs. 3,75,000
- Building - Rs. 6,25,000
- Office Equipments - Rs. 60,000
- Furniture and Fittings - Rs. 65,000
Explanation of Accounting Treatment
Capital Investment:
- The capital investment of Rs. 12.5 lakh will be recorded as a liability under the head 'Capital' in the balance sheet.
Credit Purchase:
- The purchase of bicycles from Health Accosricise will be recorded as a liability under the head 'Sundry Creditors' in the balance sheet until the payment is made.
Bank Payments for Asset Acquisition:
- The acquisition of land, building, office equipment, and furniture and fittings will be recorded as assets under the respective heads in the balance sheet.
- The payment made through bank will be recorded as a decrease in the bank balance under the head 'Bank' in the balance sheet.
- Depreciation will be charged on the assets over their useful life and will be recorded as an expense in the income statement.
Conclusion:
The above transactions and events in Kanchan's business have been explained along with their accounting treatment. These transactions will be recorded in the balance sheet and income statement, which will help in determining the financial position and profitability of the business.
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Kanchan commenced business of selling bicycle on April 1,2017 with a capital of rupees 12.5 lakh.It entered into an agreement with health accosricise to sell the bicycle,purchased from them on one month credit basis. Kanchan acquired during the year, following assets for which the payments were made through bank: Land Amount-3,75,000 Building. 6,25,000 Office equipments 60,000 Furniture and fittings 65,000?
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Kanchan commenced business of selling bicycle on April 1,2017 with a capital of rupees 12.5 lakh.It entered into an agreement with health accosricise to sell the bicycle,purchased from them on one month credit basis. Kanchan acquired during the year, following assets for which the payments were made through bank: Land Amount-3,75,000 Building. 6,25,000 Office equipments 60,000 Furniture and fittings 65,000? for Class 12 2024 is part of Class 12 preparation. The Question and answers have been prepared according to the Class 12 exam syllabus. Information about Kanchan commenced business of selling bicycle on April 1,2017 with a capital of rupees 12.5 lakh.It entered into an agreement with health accosricise to sell the bicycle,purchased from them on one month credit basis. Kanchan acquired during the year, following assets for which the payments were made through bank: Land Amount-3,75,000 Building. 6,25,000 Office equipments 60,000 Furniture and fittings 65,000? covers all topics & solutions for Class 12 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Kanchan commenced business of selling bicycle on April 1,2017 with a capital of rupees 12.5 lakh.It entered into an agreement with health accosricise to sell the bicycle,purchased from them on one month credit basis. Kanchan acquired during the year, following assets for which the payments were made through bank: Land Amount-3,75,000 Building. 6,25,000 Office equipments 60,000 Furniture and fittings 65,000?.
Kanchan commenced business of selling bicycle on April 1,2017 with a capital of rupees 12.5 lakh.It entered into an agreement with health accosricise to sell the bicycle,purchased from them on one month credit basis. Kanchan acquired during the year, following assets for which the payments were made through bank: Land Amount-3,75,000 Building. 6,25,000 Office equipments 60,000 Furniture and fittings 65,000? for Class 12 2024 is part of Class 12 preparation. The Question and answers have been prepared according to the Class 12 exam syllabus. Information about Kanchan commenced business of selling bicycle on April 1,2017 with a capital of rupees 12.5 lakh.It entered into an agreement with health accosricise to sell the bicycle,purchased from them on one month credit basis. Kanchan acquired during the year, following assets for which the payments were made through bank: Land Amount-3,75,000 Building. 6,25,000 Office equipments 60,000 Furniture and fittings 65,000? covers all topics & solutions for Class 12 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Kanchan commenced business of selling bicycle on April 1,2017 with a capital of rupees 12.5 lakh.It entered into an agreement with health accosricise to sell the bicycle,purchased from them on one month credit basis. Kanchan acquired during the year, following assets for which the payments were made through bank: Land Amount-3,75,000 Building. 6,25,000 Office equipments 60,000 Furniture and fittings 65,000?.
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Kanchan commenced business of selling bicycle on April 1,2017 with a capital of rupees 12.5 lakh.It entered into an agreement with health accosricise to sell the bicycle,purchased from them on one month credit basis. Kanchan acquired during the year, following assets for which the payments were made through bank: Land Amount-3,75,000 Building. 6,25,000 Office equipments 60,000 Furniture and fittings 65,000?, a detailed solution for Kanchan commenced business of selling bicycle on April 1,2017 with a capital of rupees 12.5 lakh.It entered into an agreement with health accosricise to sell the bicycle,purchased from them on one month credit basis. Kanchan acquired during the year, following assets for which the payments were made through bank: Land Amount-3,75,000 Building. 6,25,000 Office equipments 60,000 Furniture and fittings 65,000? has been provided alongside types of Kanchan commenced business of selling bicycle on April 1,2017 with a capital of rupees 12.5 lakh.It entered into an agreement with health accosricise to sell the bicycle,purchased from them on one month credit basis. Kanchan acquired during the year, following assets for which the payments were made through bank: Land Amount-3,75,000 Building. 6,25,000 Office equipments 60,000 Furniture and fittings 65,000? theory, EduRev gives you an
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