Answer to Question #200555 in Finance for krishna

Question

Discuss and analyze the following transactions for X Ltd, using the concept of accounting equation (Assets, Liabilities and Equities).

Answer 1

Assets= Liabilities +Equity

Assets include;

Purchased furniture= Rs 675,000

Goods sold on credit=Rs 400,000

Goods sold=Rs 300,000

Purchased goods from Sneha=Rs 600,000

Total Assets=Rs 1,975,000

Equity

Cash introduced by owners 12 lakhs which is Rs 1,200,000

Liabilities

Goods purchased on Credit=Rs 105,000

Rs 1,975,000 is more than Rs 1,200,000+Rs 105,000(Rs 1,305,000).

Company X ltd has already hit the break even point and is making profit.