Question
i. Mr. Ali Hussain started business with Rs. 700,000 on January 1, 2020. Goods sold to Jamals Corporation were amounting to Rs. 10,000, Value of
i. Mr. Ali Hussain started business with Rs. 700,000 on January 1, 2020. Goods sold to Jamals Corporation were amounting to Rs. 10,000, Value of goods worth Rs. 5,000 was returned. He personally contributed to an orphanage house Rs. 40,000 as donation. Explain how this transaction would affect the accounting equation of the business. ii. How depreciation on a fixed asset affects the accounting equation? iii. If the worth of total assets of Axyme Corporation is Rs.550, 000 and loans taken by the firm are Rs.200, 000, what is the amount of owner's equity? iv. Differentiate between paid up and authorized capital using a real time example. v. Mari Petroleum issued 200,000 common shares and 25,000 preferred shares at Rs.7 and Rs.7.59 per share respectively. I wanted to invest somewhere to have my second source of income. My friend helped me in getting 10,000 common and 5000 preferred shares of Mari Petroleum. I have no information of Accounting. Help me out in making my Equity statement as per my investment in Mari Petroleum.
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