Question

Vinod has the following transactions.Show accounting equation for the same:

(i) Commenced business with Cash Rs.50,000; and Stock Rs.30,000 and Machinery Rs.20,000.

(ii) Goods purchases on credit Rs.10,000.

(iii) Rent Received Rs.5,000.

(iv) Sold goods costing Rs.9,000 for Cash Rs.12,000.

Answer 1

Accounting Equation

$\begin{array}{cccc}\text{Particulars}& \text{Assets}& =\text{Liabilities}& \\ & \text{Cash+Stock+Machinery}& =& \text{Creditors+Capital}\\ \left(i\right)\text{Commenced Business}& 5000+30,000+20,000& =& 0+1,00,000\\ \left(ii\right)\text{Goods purchased}& 0+10,000+0& =& 10,000+0\\ \text{New Equation}& 50,000+40,000+20,000& =& 10,000+1,00,000\\ \left(iii\right)\text{Rent Received}& 5,000+0+0& =& 0+5,000\\ \text{New Equation}& 55,000+40,000+20,000& =& 10,000+1,05,000\\ \left(iv\right)\text{Solds goods}& 12,000+(9,000)+0& =& 0+3,000\\ \text{New Equation}& 67,000+31,000+20,000& =& 10,000+1,08,000\end{array}$