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Question -

Prepareaccounting equation from the following:

 

 

Rs

(a)

Kunal started business with cash

2,50,000

(b)

He purchased furniture for cash

35,000

(c)

He paid commission

 2,000

(d)

He purchases goods on credit

40,000

(e)

He sold goods (costing Rs 20,000) for cash

26,000



Answer -

S.No.

Explanation

Assets

 

Liabilities

+

Capital

Cash

+

Furniture

+

Stock

 

 

=

Creditors

 

 

(a)

Increase in cash

2,50,000

 

 

 

 

 

 

 

 

 

 

 

Increase in capital

 

 

 

 

 

 

 

 

 

 

2,50,000

 

 

2,50,000

 

 

 

 

 

 

=

NIL

+

2,50,000

(b)

Increase in furniture

 

 

35,000

 

 

 

 

 

 

 

 

 

Decrease in cash

(35,000)

 

 

 

 

 

 

 

 

 

 

 

 

2,15,000

+

35,000

 

 

 

 

=

NIL

+

2,50,000

(c)

Decrease in capital (Expense)

 

 

 

 

 

 

 

 

 

 

(2,000)

 

Decrease in cash

(2,000)

 

 

 

 

 

 

 

 

 

 

 

 

2,13,000

+

35,000

 

 

 

 

=

NIL

+

2,48,000

(d)

Increase in stock

 

 

 

 

40,000

 

 

 

 

 

 

 

Increase in creditors

 

 

 

 

 

 

 

 

40,000

 

 

 

 

2,13,000

+

35,000

+

40,000

 

 

=

40,000

+

2,48,000

(e)

Increase in cash

26,000

 

 

 

 

 

 

 

 

 

 

 

Decrease in stock

 

 

 

 

(20,000)

 

 

 

 

 

 

 

Increase in capital (Profit)

 

 

 

 

 

 

 

 

 

 

6,000

 

 

2,39,000

+

35,000

+

20,000

 

 

=

40,000

+

2,54,000

 

 

 

 

 

 

 

 

 

 

 

 

 

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