Prepare Accounting equation on the basis of following information:
(i) Sohan started business with cash ` 80,000 Machinery ` 10,000 and stock `
10,000
(ii) Interest on the above capital was allowed @ 10%
(iii) Money withdrew from the business for his personal use ` 10,000
(iv) Interest on drawings ` 500
(v) Depreciation charged on machinery ` 2,000.
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Answer:
Assets
=
Liabilities
+
Capital
Cash
(Rs)
+
Bank
(Rs)
+
Stock
(Rs)
=
Creditors
(Rs)
(Rs)
(i)
Started business with cash
45,000
=
45,000
45,000
=
45,000
(ii)
Opened a Bank Account with a deposit
– 4,500
+
4,500
=
40,500
+
4,500
=
45,000
(iii)
Bought goods from M/s. Sun & Co.
11,200
=
11,200
40,500
+
4,500
+
11,200
=
11,200
+
45,000
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