Question

show that accounting equation is on the basic of the following and present a balance sheet on last new equation balance.

1. manu started business with cash 50000
2. bought furniture for 500
3. purchased goods on credit 4000
4. sold goods on cash for 700
5. recevied rent 200
6. purchashed goods for cash 1000
7. withdrew for personal use 700
8. paid to creditors 400
9. paid for salaries 200.

Answer 1

S. No.	Transaction	Assets					=	Liabilities	+	Capital
		Cash	+	Stock	+	Furniture	=	Creditors
(i)	Business Commenced	50,000								50,000
(ii)	Furniture Purchases Rs 500	(500)				500
		49,500			+	500	=			50,000
(iii)	Goods Purchased on Credit Rs 4,000			4,000				4,000
		49,500	+	4,000	+	500	=	4,000	+	50,000
(iv)	Goods sold on cash Rs 700	700		(700)
		50,200	+	3,300	+	500	=	4,000	+	50,000
(v)	Rent Received Rs 200	200								200
		50,400	+	3,300	+	500	=	4,000	+	50,200
(vi)	Goods Purchased for Cash Rs 1,000	(1,000)		1,000
		49,400	+	4,300	+	500	=	4,000	+	50,200
(vii)	Drawings Rs 700	(700)								(700)
		48,700	+	4,300	+	500	=	4,000	+	49,500
(viii)	Paid to creditors Rs 400	(400)						(400)
		48,300	+	4,300	+	500	=	3,600	+	49,500
(ix)	Salaries Paid Rs 200	(200)								(200)
		48,100	+	4,300	+	500	=	3,600	+	49,300