Question

show the accounting equation
commenced business with cash 50,000
paid into bank 10,000
purchased goods for cash 20,000 and credit on 30,000
sold goods for cash 40000 costing 30,000
rent paid 500
rent outstanding 100
bought furniture 5,000 on credit
bought refrigerator for personal use 5,000
purchased motor cycle for cash 20,000

Answer 1

Answer:

1. Commenced business with cash 50,000. 2. Purchased goods for cash

credit * 30,000. 3. Sold goods for cash * 40,000, costing * 30,000. 4. Rent paid 500,

Salaries 5,000. 5. Rent outstanding 100, Salaries Outstanding 1,000. 6. Bought

furniture * 5,000 on credit. 7. Bought refrigerator for personal use * 5,000.

8. Purchased computer for cash * 20,000. 9. Cash withdrawn for personal use

* 10,000. 10. Interest on drawings charged 500 and the interest on Capital * 1,000.

Use Accounting Equation to show the effect of the above transactions on his assets,

liabilities and capital and also show his

Explanation:

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