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Illustration 6. Prepare an Accounting Equation from the following transactions in the books of Mr.X for January, 2013: 1 Invested Capital in the firm 20,000 2 Purchased goods on credit from Das & Co. for 2,000 4 Bought plant for cash 8,000 8 Purchased goods for cash 4,000 12 Sold goods for cash (cost 4,000 + Profit 32,000) * 6,000. 18 Paid to Das & Co. in cash 1,000 22 Received from B. Banerjee 3 300 (being a debtor) 25 Paid salary 6,000 30 Received interest 5,000 31 Paid wages 3,000 Solution: Effect of transaction on Assets, Liabilities and Capital Date Transaction Assets = Liabilities + Capital January, 2013 Invested Capital in the firm, * 20,000 20,000 20,000 1 2 Purchased goods on credit from Das & Co. 2,000 +2,000 +2,000 Revised Equation 22,000 = 2,000 + 20,000 4 Bought Plant for cash 8,000 +8,000 -8,000 Revised Equation 22,000 = 2,000 + 20,000 8 Purchased goods for cash 4,000 +4,000 -4,000 Revised Equation 22,000 = 2,000 + 20,000 12 Sold Goods for cash (Cost 4,000 + Profit +6,000 2,000) -4,000 +2,000 Revised Equation 24,000 2,000 + 22,000 18 Paid to Das & Co. for 1,000 -1,000 -1,000 Revised Equation 23,000 = 1,000+ 22,000 22 Received from B.Banerjee for 300 +300 -300 Revised Equation 23,000 = 1,000 + 22,000 25 Paid salary for 6,000 - 6,000 -6,000 Revised Equation 17,000 = 1,000+ 16,000 30 Received Interest for 5,000 +5,000 +5,000 Revised Equation 22,000 = 1,000 + 21,000 31 Paid Wages for 3,000 -3,000 -3,000 Revised Equation 19,000 = 1,000+ 18,000 8