Prepare accounting equation from the foolowing:-
1. Sandeep started business with cash Rs. 1,00,000
2.purcshased furniture for cash Rs. 5,000
3. purchased good for Rs. 20,000
4. purchased good on credit Rs. 36,000
5. paid for rent Rs. 700
6. goods costing s. 40,000 sold at a profit of 20% for cash
Accounting Equation
S. No. | Transaction | Assets | = | Liabilities | + | Capital | ||||||||||
Cash |
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| + | Stock | + | Furniture |
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| = | Creditors |
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| + | Capital | ||
(i) | Sandeep started business with Rs. 1,00,000 | 1,00,000 |
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| + | 0 | + | 0 |
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| = | 0 |
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| + | 1,00,000 |
| New Equation | 1,00,000 |
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| + | 0 | + | 0 |
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| = | 0 |
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| + | 1,00,000 |
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(ii) | Purchased furniture for cash for Rs. 5,000 | (-) 5,000 |
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| + | 0 | + | 5,000 |
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| = | 0 |
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| + | 0 |
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| New Equation | 95,000 |
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| + | 0 | + | 5,000 |
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| = | 0 |
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| + | 1,00,000 |
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(iii) | Purchased goods for Rs. 20,000 | (-)20,000 |
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| + | 20,000 | + | 0 |
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| = | 0 |
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| + | 0 |
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| New Equation | 75,000 |
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| + | 20,000 | + | 5,000 |
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| = | 0 |
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| + | 1,00,000 |
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(iv) | Purchased goods on credit Rs. 36,000 | 0 |
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| + | 36,000 | + | 0 |
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| = | 36,000 |
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| + | 0 |
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| New Equation | 75,000 |
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| + | 56,000 | + | 5,000 |
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| = | 36,000 |
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| + | 1,00,000 |
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(v) | Paid for rent Rs.700 | (-) 700 |
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| + | 0 | + | 0 |
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| = | 0 |
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| (-) | 700 |
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(vi) | New Equation Goods costing 40,000 sold at a profit of 20% for cash . | 74,300 48,000 |
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| + (-) | 56,000 40,000 | + + | 5,000 0 |
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| = = | 36,000 0 |
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| + + | 99,300 8,000 |
| Final Equation | 1,22,300 |
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| + | 16,000 | + | 5,000 |
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| = | 36,000 |
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| + | 1,07,300 |