What will be the effect of the following on the Accounting Equation? (1) Harish started business with cash * 1,80,000 (II) Purchased goods for cash * 60,000 and on credit * 30,000 (III) Sold goods for cash 40,000; costing * 24,000 (iv) Rent paid * 5,000; and rent outstanding 2,000 (v) Sold goods on credit * 50,000 (costing * 38,000) (vi) Salary paid in advance 3,000 S.No Transaction 1. 2. 3. 4. 5. 6. 1. W N Accounting Equation 3. 4. 5. 6. 7. 8. Harish started business with cash Purchased goods for 60,000 cash and on * 30,000 credit Sold goods for $40,000 cash costing * 24,000 Rent paid 25,000. Rent outstanding *2,000 Sold goods on 50,000 credit (costing * 38,000) Salary paid in advance 3,000 Business started with cash 94 Purchased goods for cash Rent received Salary outstanding Prepaid insurance Received interest Sold goods for cash(costing 5,000) Goods destroyed by fire Cash + Assets Stock + Debtors +1,80,000 1,80,000 -60,000 +90,000 1,20,000 90,000 +40,000 1,60,000 -5,000 Question 7 Use Accounting Equation to show the effect of the following transactions of M/s Royal Traders. -24,000 66,000 1,55,000 66,000 Prepaid Salary -38,000 +50,000 1,55,000 28,000 50,000 -3,000 +3,000 1,52,000 28,000 50,000 3,000 Liabilities + -Creditors+ +30,000 30,000 30,000 +2,000 30,000 30,000 30,000 Outstanding Rent 2,000 2,000 2,000 1,20,000 10,000 5,000 2,000 1,000 700 7,000 500 Capital +1,80,000 1,80,000 1,80,000 +16,000 (Profit) -7,000 (Expense) 1,89,000 +12,000 (Profit) 2,01,000 2,01,000