Prepare accounting equation from the following:
Kunal started business with cash ₹ 2,50000
He purchased furniture for cash ₹ 35,000
He paid commission ₹ 2,000
He purchases goods on credit ₹ 40,000
He sold goods (Costing ₹ 20,000) for each ₹ 26,000
Kunal started business with cash ₹ 2,50000
He purchased furniture for cash ₹ 35,000
He paid commission ₹ 2,000
He purchases goods on credit ₹ 40,000
He sold goods (Costing ₹ 20,000) for each ₹ 26,000
| S.No | Explanation | Asset | Asset | Asset | 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 |