Question

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sold goods for cash coasting rupees 40,000 at a profit of 20% and on credit coasting rupees 72,000 at a profit of 25%.

prepare accounting equation

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Answer 1

Hello Mortals

1st CASE :-

Sold goods for cash costing 40000 at a profit of 20%.

The cost will be,

20% of 40000 + 40000
= 8000 + 40000
= 48000


Now on accounting equation,

You will reduce 40000 from stock( as we sell goods costing 40000) , add 48000 to cash ( as we get 48000 as cash) and add 8000 to capital ( as 8000 is our income).


2nd CASE :-

Goods sold on credit costing 72000 at a profit of 25%.

Amount we will get,

25% of 72000 + 72000
= 18000 + 72000
= 90000.

Accounting equation will be,

Reduce 72000 from stock, add 90000 to debtor and add 18000 to capital.

Answer 2

Add cash 48000( 40000 + 8000) less stock 40000 and add capital 8000
Create debtors 90000 less stock 72000 and 18000 add to capital