Question

Prepare Accounting Equation from the following:
(a) Started business with cash ₹ 1,00,000.
(b) Purchased goods for cash ₹ 20,000 and on credit ₹ 30,000.
(c) Sold goods for cash costing ₹ 10,000 and on credit costing ₹ 15,000 both at a profit of 20% .
(d) Paid salaries ₹ 8,000.

Answer 1

S. No.	Transactions	Assets					=	Liabilities	+	Capital
		Cash (Rs)	+	Stock (Rs)	+	Debtors (Rs)		Creditors (Rs)		(Rs)
(i)	Started business with cash	1,00,000								1,00,000
		1,00,000					=			1,00,000
(ii)	Purchased goods for Cash Rs 20,000 and on credit Rs 30,000	– 20,000	+	50,000			=	30,000
		80,000	+	50,000			=	30,000	+	1,00,000
(iii)	Sold goods for cash costing Rs 10,000 and on credit costing Rs 15,000 both at profit of 20%	12,000	+	– 25,000	+	18,000				5,000 (Profit)
		92,000	+	25,000	+	18,000	=	30,000	+	1,05,000
(iv)	Paid Salaries Rs 8,000	– 8,000								– 8,000 (Expenses)
		84,000	+	25,000	+	18,000	=	30,000	+	97,000

Assets	=		84,000 + 25,000 + 18,000
	=	Rs	1,27,000
Liabilities	=	Rs	30,000
Capital	=	Rs	97,000