Question

Prepare accounting equation from the following:
(i) Started a business with cash ₹ 1,00,000 and goods worth ₹ 20,000.
(ii) Sold 50% of above goods at a profit of ₹ 2,000 on credit to Ram.
(iii) Rent paid ₹ 5,000.
(iv) Ram paid 50% of his balance in cash.

Answer 1

		Cash	+	Stock	+	Debtors	=	Liabilities	+	Capital
(i)	Started business with cash and goods	+1,00,000	+	20,000			=		+	1,20,000
(ii)	Sold goods on credit	0	˗	10,000	+	12,000	=		+	2,000
	New Balance	1,00,000	+	10,0000	+	12,000	=		+	1,22,000
(iii)	Rent paid	˗ 5,000					=		˗	5,000
	New Balance	95,000	+	10,000	+	12,000	=		+	1,17,000
(iv)	Ram paid cash	+ 6,000			˗	6,000	=
	New Balance	1,01,000	+	10,000	+	6,000	=		+	1,17,000