Question

Accounting Equation -se Shaji set up a newspaper agency. After two months, he had the following accou Cash Rs. 29,000; Accounts receivable Rs. 40,000; Office supplies, Rs. 12,000; Office Equipe Rs. 15,000, Accounts payable Rs 18.000; Equity Rs. 78,000. The following transactions (liab+) place later: Equt Required: Triple column cash book. Long Answer Questions 21. a. Collected payments from clients billed earlier, Rs. 18,000. b. Billed clients for professional services, Rs. 35,000. Bought supplies on account, Rs. 4,000. d. Received agency commission, Rs. 25,000. f. 8. h. }- Bought a computer for cash, Rs. 3,000. Paid office rent, Rs. 4,000. Withdrew cash for personal use, Rs. 13,000. Bought supplies on credit, Rs. 1,500. Paid staff salaries, Rs. 9,000. Paid accounts payable, Rs. 6,000. Took a bank loan, Rs. 32,000. Required: Analyze the effect of the transactions on the accounting equation. First enter beginning balances.

Answer 1

The balance sheet of the bank lists its assets, including reserves of $50, government bonds of $70, and loans of $500. The bank's liabilities consist of deposits worth $400. The bank's net worth is calculated by subtracting liabilities from assets, resulting in a net worth of $220.

Step-by-step explanation:

To set up a T-account balance sheet for the bank and calculate the bank's net worth, we will list down the assets and liabilities. The difference between total assets and total liabilities will give us the net worth of the bank.

Assets

• Reserves: $50
• Government Bonds: $70
• Loans: $500

Liabilities

Deposits: $400

Now let's calculate the assets and liabilities:

• Total Assets = Reserves + Government Bonds + Loans = $50 + $70 + $500 = $620
• Total Liabilities = Deposits = $400

To find the bank's net worth, we subtract the total liabilities from the total assets:

Net Worth = Total Assets - Total Liabilities = $620 - $400 = $220

Therefore, the bank's net worth is $220.