Question

Prepare Accounting Equation from the following and also prepare a Balance Sheet:-
1. Raghu started business with Cash ₹1,50,000.
2. Bought goods for cash ₹80,000 and on credit for ₹40,000.
3. Goods costing ₹75,000 sold at a profit of 33$\frac{1}{3}$%. Half the payment received in cash.
4. Goods costing ₹10,000 sold for ₹12,000 on credit.
5. Paid for Rent ₹2,000 and for salaries ₹4,000.
6. Goods costing ₹20,000 sold for ₹18,500 for Cash.

Answer 1

ACCOUNTING EQUATION
S. No.	Transaction	Assets					=	Liabilities	+	Capital
		Cash	+	Stock	+	Debtors	=	Creditors
(i)	Raghu started business with cash	+1,50,000							+	1,50,000
		1,50,000					=		+	1,50,000
(ii)	Purchase goods for cash and on credit	–80,000		+1,20,000				+40,000
		70,000	+	1,20,000			=	40,000	+	1,50,000
(iii)	Goods costing Rs 75,000 sold at a profit of $33\frac{1}{3}\%$. Half amount was received in cash.	+50,000		–75,000		+50,000				+25,000 (Profit)
		1,20,000	+	45,000	+	50,000	=	40,000	+	1,75,000
(iv)	Goods costing Rs 10,000 sold for Rs 12,000 on credit			–10,000		+12,000				+2,000 (Profit)
		1,20,000	+	35,000	+	62,000	=	40,000	+	1,77,000
(v)	Rent and salaries paid	–6,000								–6,000 (Expense)
		1,14,000	+	35,000	+	62,000	=	40,000	+	1,71,000
(vi)	Goods costing Rs 20,000 sold for Rs 18,500 cash	+18,500		–20,000						–1,500 (Loss)
		1,32,500	+	15,000	+	62,000	=	40,000	+	1,69,500

Working Note:

WN1 Calculation of Selling Price

Balance Sheet of Raghu as on ……
Liabilities	Amount (Rs)	Assets	Amount (Rs)
Creditors	40,000	Cash	1,32,500
Capital	1,69,500	Stock	15,000
		Debtors	62,000
	2,09,500		2,09,500