Prove that the Accounting Equation is satisfied in all the following transactions of Samarth : 1) Started business with Cash Rs.50,000 and goods Rs. 20,000. 2) Bought goods for Cash Rs.15,000 and on credit from Ramesh for Rs. 10,000. 3) Goods costing Rs.25,000 sold at a profit of 20% to Shirish. He paid half payment in cash. 4) Payment made to Ramesh Rs.9,750 . 5) Paid Salary to Arun Rs. 2000 and salary outstanding being Rs.1,000.
Answers
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