Question

Ajay had the following transactions
1. Commenced business with cash 50,000.
2. Purchased goods for cash 20,000 and credit 30,000.
3. Sold goods for cash 40,000, costing 30,000.
4. Rent paid 500, Salaries 5,000.
5. Rent outstanding 100, Salaries Outstanding 1,000.
Prepare Accounting Equation

Answer 1

Explanation:

1 cash 50,000 and capital 50,000

2 cash less 20000 from from total cash ie 50000 and add 30000 to creditors and stock.

3Add cash 40000 and less 30000 and less stock 30000 and add 10000 to capital

4 less total cash 500 And 5000 and less captial 500 and 5000

5 add 100 and 1000 to liabilities and less 100 and 1000 to capital

hence 64500=64500