Certainly, let's break down the transactions step-by-step and develop the accounting equation.
1. Transaction: Started a business with cash of Rs.8,000 and bank balance of Rs.2,000.
- Assets:
- Cash: Rs.8,000
- Bank Balance: Rs.2,000
- Equity (Capital):
- Capital: Rs.10,000 (Cash Rs.8,000 + Bank Balance Rs.2,000)
Initial accounting equation:
[tex]\[
\text{Assets} = \text{Capital} \\
\text{Rs.10,000} = \text{Rs.10,000}
\][/tex]
2. Transaction: Purchased goods on credit of Rs.2,000.
- Assets:
- Cash: Rs.8,000
- Bank Balance: Rs.2,000
- Goods purchased on credit: Rs.2,000
- Liabilities:
- Creditors: Rs.2,000
Updated accounting equation:
[tex]\[
\text{Assets} = \text{Liabilities} + \text{Capital} \\
\text{Rs.12,000} = \text{Rs.2,000} + \text{Rs.10,000}
\][/tex]
3. Transaction: Sold goods on credit of Rs.3,000.
- Assets:
- Cash: Rs.8,000
- Bank Balance: Rs.2,000
- Goods purchased on credit: Rs.2,000
- Goods sold on credit: Rs.3,000
- Liabilities:
- Creditors: Rs.2,000
Updated accounting equation:
[tex]\[
\text{Assets} = \text{Liabilities} + \text{Capital} \\
\text{Rs.15,000} = \text{Rs.2,000} + \text{Rs.13,000}
\][/tex]
4. Transaction: Received commission of Rs.500.
- Assets:
- Cash: Rs.8,000
- Bank Balance: Rs.2,000
- Goods purchased on credit: Rs.2,000
- Goods sold on credit: Rs.3,000
- Commission received: Rs.500
- Liabilities:
- Creditors: Rs.2,000
Updated accounting equation:
[tex]\[
\text{Assets} = \text{Liabilities} + \text{Capital} \\
\text{Rs.15,500} = \text{Rs.2,000} + \text{Rs.13,500}
\][/tex]
5. Transaction: Withdrawn cash from bank of Rs.1,000.
- Assets:
- Cash: Rs.8,000
- Bank Balance: Rs.1,000 (Rs.2,000 - Rs.1,000 withdrawn)
- Goods purchased on credit: Rs.2,000
- Goods sold on credit: Rs.3,000
- Commission received: Rs.500
- Liabilities:
- Creditors: Rs.2,000
Updated accounting equation:
[tex]\[
\text{Assets} = \text{Liabilities} + \text{Capital}
\][/tex]
[tex]\[
\text{Rs.12,500} = \text{Rs.2,000} + \text{Rs.10,500}
\][/tex]
Thus, after all transactions, the final state of the accounting equation is:
- Total Assets: Rs.12,500
- Total Liabilities: Rs.2,000
- Total Capital: Rs.10,500
