Answer to Question #301297 in Management for Obama

Question

. Analyse the following transactions for Surprise Ltd. using the concept of Accounting

Equation comprising of Assets, Liabilities and Equity

1.Commenced business with cash of ₹ 5,00,000.

2. Purchased equipment for cash ₹ 2,00,000.

3. Purchased furniture worth ₹50,000 on credit from IndiMart.

4. Purchased raw materials for ₹25,000 against cash from XYZ Suppliers.

5. Deposited cash of ₹ 1,25,000 in the current account.

6. Sold goods for ₹75,000 and received a cheque against the same.

Answer 1

Assets = Liabilities + Capital

1) Dr Cash (Assest)       500000

                     Cr    Capital    500000

2) Dr Equipment     200000

       Cr Cash    200000

3) Dr Furniture         500000

     Cr Indimart creditors   50000

4) Dr Raw material     25000

     Cr Cash       25000

5) Dr Bank 125000

     Cr Capital Injection  125000

6) Dr Bank     75000

   Cr Sales  75000