Balance Sheet Practice Question

Balance Sheet

Q 1: As on 1st April Assets = 100,000; Equity = 75,000; during the year the company purchased assets for 50,000 for cash. Find the value of the total liabilities to be shown in the balance sheet as at the end of the year.

Answer: Assets remains the same as 100,000 (One form of asset changed to other form which is cash here). Hence, Liability is Assets – Equity = 100,000-75,000 = 25,000

Q 2: Opening Cash in hand =40,000; Credit Sales = 50,000; Cash sales =25,000; Expenses for the period = 30,000; Expenses paid = 10,000; Find Closing cash in hand.

Answer: Closing Cash = Opening Cash + Cash Sales – Expenses Paid = 40,000 + 25,000 - 10,000 = 55,000

Q 3: Rent per month =5000; Accounting period =3 months. Rent paid =5000. How much will appear in the balance sheet?

Answer: Rent Payable / Outstanding Rent will appear on Balance sheet (Rent for the accounting period – Rent Paid for the accounting period = 15,000 – 5,000 = 10,000)

Q 4: Opening debtors = 50,000; Sold goods for cash =50,000; Collections from the debtors = 30,000; Bad debts written off = 10,000. Find debtors to be shown in the balance sheet.

Answer: Closing Debtors = Opening Debtor - Collection of Debtors – Bad Debts Written Off = 50,000 - 30,000 – 10,000 = 10,000

Q 5: As on 1st April Assets = 100,000; Loan = 25,000. During the year the company issued 10,000 shares of 2 at 10. Company used the entire money for purchasing computers. Find the equity immediately after the issue of shares.

Answer: Revised Equity = Old Equity + New Equity = (100,000 – 25,000) + (10,000*10) = 75,000 + 100,000 = 175,000. (Here, Face Value of Share is 10 and not 2. Company issued the share in market at premium)