# What is the answer of 3(c)

Solution:

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.

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