Buy a fixed asset. This is a debit to the wage (expense) account and a credit to the cash (asset) account. Trade discount allowed was 5% and 3% cash discount was allowed. 60,000; Sold goods to Hari on credit Rs. Prove that the Accounting Equation is satisfied in all the following transactions of Suresh. 20,000 (Rs. Solution: Question 10. (iii) Sold goods for cash ₹ 4,000 (costing ₹ 2,400) (iv) Rent paid ₹ 1,000 and rent outstanding ₹ 200. Profit made on . i. Commenced business with cash Rs.60,000. Also prepare a Balance sheet. In the case of a cash sale, the entry is: [debit] Cash. Credit – What went out of the business Cash went out of the business with the cash purchase. Pass necessary Journal Entry. Sold goods for cash Rs. The sales revenue and cost of goods sold will be shown in the Income Statement.. Sales – Gross profit = Cost of goods sold 1800-300 = 1500. 15,000 paid in cash and balance on credit) (vii) Drawn for personal use 5,000 [debit] Cost of goods sold. Payment is received from the customer on December 11. The amount of cash received on December 11 is The solution for this question is as follows: Q.5 Prepare Accounting Equation from the following: (i) Started business with cash ₹ 1,00,000 and Goods ₹ 20,000. Or. 20,000; Purchased goods from Krishan on credit Rs. Sold goods costing 9,000 for cash 15,000 ; sold goods costing 10,000 on credit to Mr. Tejamul 18,000 ; Profit = Sale Price − Cost Price . The Accounting Equation On October 30, goods with a list price of $9,200 are sold, subject to a trade discount of 25 percent with terms of 2/10, n/30. 36,000; Purchased goods from Krishan for cash Rs. 10,000; Cash received from Hari Rs. Debit – What came into the business The goods came into the business and will be held as part of inventory until sold. 20,000 for 40,000 (v) Sold goods costing Rs. Since there is a profit of 8,000, capital increases by 8,000 to 1,08,000. The cash available with the business would increase from 50,000 to 78,000. Cash is increased, since the customer pays in cash at the point of sale. When netted together, the cost of goods sold of $1,000 and the revenue of $1,500 result in a profit of $500. 28,000; Solution 19: Point of Knowledge:-Increase in asset will be debited and decrease will be credited. 20,000 on credit for 42,000 (vi) Bought goods worth Rs. Profits increase capital. Sold Goods for cash 28,000. Cash Sale = 6,000 (15,000 − 9,000) Credit Sale = 8,000 (18,000 − 10,000) Recording sales at cost using Goods/Stock a/c . An expense is incurred for the cost of goods sold, since goods or services have been transferred to the customer. 15,000; Cash paid to Krishan Rs. This means that you are consuming the cash asset by paying employees. Pay employees. Sold goods for cash costing Rs.10,000 and on credit costing Rs.15,000 both at a profit of 20%. (ii) Sold goods worth ₹ 10,000 for cash ₹ 12,000. You pay employees $5,000. 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