Question

Prepare an Accounting Equation on the basis of the following transaction:


(a) Started business with cash ₹70,000

(b) Credit purchase of goods ₹ 18,000

(c) Payment made to creditors in full settlement ₹ 17,500

(d) Purchase of machinery for cash ₹ 20,000

(e) Depreciation on Machinery ₹ 2,000

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Answer 1

Answer:

Explanation:

PARTICULARS            ASSETS.        TOTAL = LIABILITIES. + CAPITAL. TOTAL

Started business.            Cash.        

with cash                        70000.        70000.                              70000.   70000

Goods purchased.    cash+ stock.                      Creditors

on credit.                   70000+18000  88000.      18000.           70000.   70000

Payment made        Cash + stock

to creditors             52500+18000.    70500.                             70500.  70500

purchase of    Cash+Stock+machinery

machinery      32500+18000+20000. 70500.                           70500.   70500

depreciation  Cash+stock+machinery

charged.        32500+18000+18000.  68500.                           68500.   68500