NCERT Solutions for Commerce Accountancy Class 11 (Part - 3) Recording of Transactions-I

Page No 91:

Question 9: Transactions of M/s. Vipin Traders are given below. Show the effects on Assets, Liabilities and Capital with the help of the accounting Equation.

ANSWER:

Question 10: Bobby opened a consulting firm and completed these transactions during November, 2005:
(a) Invested Rs 4,00,000 cash and office equipment with Rs 1,50,000 in a business called Bobbie Consulting.
(b) Purchased land and a small office building. The land was worth Rs 1,50,000 and the building worth Rs 3,50,000. The purchase price was paid with Rs 2,00,000 cash and a long term note payable for Rs 8,00,000.
(c) Purchased office supplies on credit for Rs 12,000.
(d) Bobbie transferred title of motor car to the business. The motor car was worth Rs 90,000.
(e) Purchased for Rs 30,000 additional office equipment on credit.
(f) Paid Rs 75,00 salary to the office manager.
(g) Provided services to a client and collected Rs 30,000
(h) Paid Rs 4,000 for the month’s utilities.
(i) Paid supplier created in transaction (c).
(j) Purchase new office equipment by paying Rs 93,000 cash and trading in old equipment with a recorded cost of Rs 7,000.
(k) Completed services of a client for Rs 26,000. This amount is to be paid within 30 days
(l) Received Rs 19,000 payment from the client created in transaction (k).
(m) Bobby withdrew Rs 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.
ANSWER:
a) Effect: Assets increase by Rs 5,50,000 (Cash Rs 4,00,000 and Office Equipment Rs 1,50,000); Capital increases by Rs 5,50,000.
Brief accounting note: Debit Cash Rs 4,00,000 and Equipment Rs 1,50,000; Credit Capital Rs 5,50,000.

b) Effect: Land and Building (assets) increase by Rs 1,50,000 and Rs 3,50,000 respectively (total Rs 5,00,000). Cash decreases by Rs 2,00,000 and Long-term Note Payable (liability) increases by Rs 8,00,000.
Brief accounting note: Debit Land Rs 1,50,000 and Building Rs 3,50,000; Credit Cash Rs 2,00,000 and Long-term Note Payable Rs 8,00,000 (net funds used/owed shown by the entries).

c) Effect: Office Supplies (asset) increase by Rs 12,000 and Creditors / Accounts Payable (liability) increase by Rs 12,000 because the purchase is on credit.
Brief accounting note: Debit Office Supplies Rs 12,000; Credit Accounts Payable Rs 12,000.

d) Effect: Motor Car (asset) increases by Rs 90,000 and Capital increases by Rs 90,000 because the proprietor contributed the car to the business.
Brief accounting note: Debit Motor Car Rs 90,000; Credit Capital Rs 90,000.

e) Effect: Office Equipment (asset) increases by Rs 30,000 and Creditors / Accounts Payable (liability) increase by Rs 30,000 (purchase on credit).
Brief accounting note: Debit Office Equipment Rs 30,000; Credit Accounts Payable Rs 30,000.

f) Effect: Salary Expense increases (reduces profit / capital) by Rs 75,000; Cash (asset) decreases by Rs 75,000.
Brief accounting note: Debit Salary Expense Rs 75,000; Credit Cash Rs 75,000.

g) Effect: Revenue from services increases Capital (or Retained Earnings) and Cash increases by Rs 30,000.
Brief accounting note: Debit Cash Rs 30,000; Credit Service Revenue Rs 30,000.

h) Effect: Utilities Expense increases (reduces profit / capital) by Rs 4,000; Cash decreases by Rs 4,000.
Brief accounting note: Debit Utilities Expense Rs 4,000; Credit Cash Rs 4,000.

i) Effect: Payment to supplier reduces Accounts Payable (liability) and reduces Cash (asset) by the amount paid.
Brief accounting note: Debit Accounts Payable Rs 12,000; Credit Cash Rs 12,000 (assuming full payment of the amount in transaction c).

j) Effect: New Office Equipment (asset) increases by the purchase value; Cash decreases by Rs 93,000 and Old Equipment (asset) with book value Rs 7,000 is removed from the books (credited). The net increase in equipment is accounted for by debiting Office Equipment and crediting Cash and the old equipment account.

Brief accounting note: Debit Office Equipment (new cost) Rs 1,00,000 (or appropriate total cost shown in supporting image); Credit Cash Rs 93,000 and Credit Office Equipment (or Accumulated Depreciation / Disposal) Rs 7,000 for the trade-in disposal. Record any gain or loss on disposal if necessary (not specified here).

k) Effect: Services provided on credit increase Accounts Receivable (Client) by Rs 26,000 and increase Service Revenue (which increases Capital) by Rs 26,000.
Brief accounting note: Debit Accounts Receivable (Client) Rs 26,000; Credit Service Revenue Rs 26,000.

l) Effect: Receipt from client reduces Accounts Receivable (asset) and increases Cash (asset) by Rs 19,000.
Brief accounting note: Debit Cash Rs 19,000; Credit Accounts Receivable (Client) Rs 19,000.

m) Effect: Drawings reduce Capital and reduce Cash by Rs 20,000.
Brief accounting note: Debit Drawings Rs 20,000; Credit Cash Rs 20,000.

T – Accounts 

Page No 92:

Question 11: Journalise the following transactions in the books of Himanshu:

ANSWER:

Question 12:  Enter the following Transactions in the Journal of Mudit :

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Page No 93:

Question 13:
Journalise the following transactions:

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Question 14: Jouranlise the following transactions in the books of Harpreet Bros.:
(a) Rs 1,000 due from Rohit are now bad debts.
(b) Goods worth Rs 2,000 were used by the proprietor.
(c) Charge depreciation @ 10% p.a for two month on machine costing Rs 30,000.
(d) Provide interest on capital of Rs 1,50,000 at 6% p.a. for 9 months.
(e) Rahul become insolvent, who owed is Rs 2,000 a final dividend of 60 paise in a rupee is received from his estate.
ANSWER:


Question 15: Prepare Journal from the transactions given below:

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