Answer to Question #192317 in Management for melissa

Question

1. Discuss and analyze the following transactions for X Ltd, using the concept of

accounting equation (Assets, Liabilities and Equities).

1. Purchased Furniture for Rs675000

2. Capital Introduced by the business Owner by depositing 12 Lakhs in the bank account

3. Goods purchased on credit from Aman Enterprises for Rs105000

4.Goods sold on credit for Rs 400000. The cost of the goods sold was Rs 300000

5. Purchased goods from Sneha Enterprises for Rs 600000 and made the payment from the

business's bank account

Answer 1

Assets                                                                                                

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                                       1,975,000

 

Liabilities

Goods purchased on credit                        Rs 105,000

Equity

Capital Introduced by the business Owner Rs 1,200,000

Assets = liability+Equity

= Rs 1,305,000

Total Assets are more than liability and equity combined. Asset Rs 1,975,000 while liabilities and equity are 1,305,000. This means the company is doing very well. And it is profitable.