Question

Prepare accounting equation and journal entry on the basis of the following : Rs. i. Pallavan started business with cash 60,000 ii. He purchased furniture 10,000 iii. He paid rent 2,000 iv. He purchased goods on credit from Mr.Mahendran 30,000 v. He sold goods (cost price Rs.20,000) for cash 25,000

Answer 1

Answer:

The amount of prepaid insurance will be credited from assets and debited in liability thus, the equation will be 5000 +1000 = 2000+4000-1000. The same way commission of Rs. 2800 will be added to assets and liability because there's an increase in cash and also an increase in capital (Income).

Answer 2

Answer:

Ram started business with ₹ 25,000. (b) Purchased goods from Shyam ₹ 10,000. ... If the capital of a business is ₹ 3,00,000 and liabilities are ₹ 50,000, loss ₹ 70,000, calculate the total assets of the business.