Question

Q ) create an accounting equation on the basis of the following transaction:

I) started business with cash 40000 and furniture 20000.

II) bought goods for cash 10000 and on credit from Atul for 20000.

III) goods bought from Atul on credit , sold for 26000.

IV) cleared the account of Atul by paying 19500.

V) paid salary 6000 and still unpaid 2000.

VI) received commission 3000 including 1000 as advance .​

Answer 1

Answer:

i) cash + furniture = capital

40000 + 20000 = 60000

ii) cash + furniture + inventory = liability + capital

30000+20000+30000 = 20000+60000

iii) sold goods, considered as cash sales and 6000 is profit which will add in capital so,

cash + furniture + inventory = liability + capital

56000 + 20000 + 10000 = 20000 + 66000

iv) cash + furniture + inventory = capital

36500+20000+10000=66500

(500 is again consider as profit)

v) unpaid salary is a liability

cash + furniture + inventory = liability + capital

30500+20000+10000=2000+64500

vi) advance amount also consider as liability.

cash + furniture + inventory = liability + capital

34500+20000+10000=3000+64500.