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Mr. Vinod started a business for buying and selling of stationery with Rs. 5,00,000 as an initial investment. Of which he paid Rs.1,00,000 for furniture, Rs. 2,00,000 for buying stationery items. He employed a sales person and clerk. At the end of the month he paid Rs.5,000 as their salaries. Out of the stationery bought he sold some stationery for Rs.1,50,000 for cash and some other stationery for Rs.1,00,000 on credit basis to Mr.Ravi. Subsequently, he bought stationery items of Rs.1,50,000 from Mr. Peace. In the first week of next month there was a fire accident and he lost Rs. 30,000 worth of stationery. A part of the machinery, which cost Rs. 40,000, was sold for Rs. 45,000.
1. What is the amount of capital with which Mr. Vinod had started business?
2. What is the value of the fixed assets he bought?
3. What is the value of the goods purchased?
4. Who is the creditor and state the amount payable to him.
5. What are the expenses?
6. What is the gain he earned?
7. What is the loss he incurred?
8. Who is the debtor? What is the amount receivable from him?
9. What is the total amount of expenses and losses incurred?
10. Determine if the following are assets, liabilities, revenues, expenses or none of the these:
Sales, debtors, creditors, salary to manager, discount to debtors, Drawings by the owner.
Answers :
1. Rs. 5,00,000
2. Rs. 1,00,000
3. Rs. 2,00,000
4. Mr. Reace, Rs. 1,50,000
5. Rs. 5,000
6. Rs. 5,000
7. Rs. 30,000
8. Mr. Ravi, Rs. 1,00,000
9. Rs. 35,000
10. Assets : debtors;
Liabilities : creditors; drawings;
Revenues : sales expenses,discount, salary.
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