What is the answer of 3(c)
Solution:
The Accounting Equation for the following transaction would be as follows:
Working Notes:
(1) Cash Sales = Cost price of goods sold + Profit
= Rs.40,000 + 20% * Rs.40,000
= Rs.40,000 + Rs.8000 = Rs.48,000
Due to cash sales Cash will increase by Rs.48,000
(2) Credit Sales = Cost price of goods sold + Profit
= Rs.72,000 + 25% * Rs.72,000
= Rs.72,000 + Rs.18,000 = Rs.90,000
Due to credit sales Debtors will increase by Rs.90,000
(3) Total Profit = Profit on cash sales + Profit on credit sales
= Rs.8,000 + Rs.18,000 = Rs.26,000
Due to Profit Capital will increase by Rs.26,000
(4) Stock will decrease by 1,12,000 (Rs.40,000+Rs.72000) i.e; cost price of goods sold on cash and credit basis.
The Accounting Equation for the following transaction would be as follows:
S.No. | Transaction | Assets = Liabilities + Capital Cash + Debtors + Stock = Creditors + Capital |
(c) | Sold goods for cash Rs.40,000 at a profit of 20% and credit costing Rs.72,000 at a profit of 25%. | +48,000 + 90,000 + (1,12,000) = 0 + 26,000 |
Working Notes:
(1) Cash Sales = Cost price of goods sold + Profit
= Rs.40,000 + 20% * Rs.40,000
= Rs.40,000 + Rs.8000 = Rs.48,000
Due to cash sales Cash will increase by Rs.48,000
(2) Credit Sales = Cost price of goods sold + Profit
= Rs.72,000 + 25% * Rs.72,000
= Rs.72,000 + Rs.18,000 = Rs.90,000
Due to credit sales Debtors will increase by Rs.90,000
(3) Total Profit = Profit on cash sales + Profit on credit sales
= Rs.8,000 + Rs.18,000 = Rs.26,000
Due to Profit Capital will increase by Rs.26,000
(4) Stock will decrease by 1,12,000 (Rs.40,000+Rs.72000) i.e; cost price of goods sold on cash and credit basis.