Krishna, a diploma holder, started a small takeaway food stall with necessary equipment and hired a few employees. He tried to prepare his accounts and discovered that his collection from customers was 48,000 though he made a sale of 72,000. He borrowed from a bank 60,000. He had run down his savings substantially. His payments are:

He had some raw materials in his stores to the tune of ` 36,000. Krishna thought that he had a successful business during the year, but was surprised to know that his cash balance was nil. He is very confused now. Try to convince him by preparing a cash summary and explain the position.

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Wages to employees 24,000 Materials purchased 72,000 Payment of installment for equipment purchased 10,000 Electricity charges 2000 Withdrawals for personal use 30,000 Other payments for expenses 6000