Question

Anand had the following transactions.
₹
Started business with cash
40,000
Purchased goods for cash
20,000
(1) Purchased goods on credit
15,000
v) Machinery purchased
7,000
Paid to creditors
5,000
Pi) Withdrew cash for personal use
3,500
(vii) Sold goods (Cost 78,500) for cash
10,000
(viil) Sold goods (Cost * 3,500) on credit
5,000
(ix) Additional capital introduced
10,000
(x) Cash received from debtors
2,000
Use the accounting equation to show the effect of the above transactions on h
liabilities and capital and show the final accounting equation.​

Answer 1

Explanation:

S. No. Transaction Assets = Liabilities + Capital

Cash + Furniture + Stock = Creditors

(i) Sandeep started business with cash 1,00,000 + 1,00,000

1,00,000 = + 1,00,000

(ii) Purchased furniture for cash –5,000 +5,000

95,000 + 5,000 = + 1,00,000

(iii) Purchased goods for cash –20,000 +20,000

75,000 + 5,000 + 20,000 = + 1,00,000

(iv) Purchased goods on credit +36,000 +36,000

75,000 + 5,000 + 56,000 = 36,000 + 1,00,000

(v) Rent paid -700 –700

74,300 + 5,000 + 56,000 = 36,000 + 99,300

(vi) Goods costing Rs 40,000 sold at a profit of 20% for cash +48,000 -40,000 +8,000

1,22,300 + 5,000 + 16,000 = 36,000 + 1,07,300

Working Note:

WN1 Calculation of Sale Price

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