Prepare the accounting equation for the given transactions: a) Business started with cash and furniture. b) Purchased plant with partial payment.

Here are the solutions for questions 4, 5, and 6. 4. Prepare accounting equation of following transaction: a. Business Started with cash and furniture of Rs. 20,000 and Rs.30,000 respectively. Assets (Cash) increase by Rs. 20,000. Assets (Furniture) increase by Rs. 30,000. Owner's Equity (Capital) increases by Rs. 50,000. Assets = Liabilities + Owner's Equity (Cash Rs. 20,000 + Furniture Rs. 30,000) = 0 + (Capital Rs. 50,000) Rs. 50,000 = Rs. 50,000 b. Purchase plant of Rs, 10,000 and partial payment only Rs. 6,000 Assets (Plant) increase by Rs. 10,000. Assets (Cash) decrease by Rs. 6,000. Liabilities (Accounts Payable) increase by Rs. 4,000 (Rs. 10,000 - Rs. 6,000). Assets = Liabilities + Owner's Equity (Plant Rs. 10,000 - Cash Rs. 6,000) = (Accounts Payable Rs. 4,000) + 0 Rs. 4,000 = Rs. 4,000 Combined Accounting Equation: | Transaction | Cash (Rs.) | Furniture (Rs.) | Plant (Rs.) | Accounts Payable (Rs.) | Capital (Rs.) | | :---------- | :--------- | :-------------- | :---------- | :--------------------- | :------------ | | Initial | 0 | 0 | 0 | 0 | 0 | | a. | +20,000 | +30,000 | 0 | 0 | +50,000 | | Balance | 20,000 | 30,000 | 0 | 0 | 50,000 | | b. | -6,000 | 0 | +10,000 | +4,000 | 0 | | Final | 14,000 | 30,000 | 10,000 | 4,000 | 50,000 | Total Assets = Rs. 14,000 + Rs. 30,000 + Rs. 10,000 = Rs. 54,000 Total Liabilities + Owner's Equity = Rs. 4,000 + Rs. 50,000 = Rs. 54,000 The accounting equation remains balanced: Rs. 54,000 = Rs. 54,000 5. Prepare trial balance of following items: | Account Name | Debit (Rs.) | Credit (Rs.) | | :------------------ | :---------- | :----------- | | Machinery | 50,000 | | | Closing stock | 20,000 | | | Bank balance | 15,000 | | | Account receivable | 20,000 | | | Common stock | | 40,000 | | Bank loan | | 30,000 | | Salary payable | | 35,000 | | Total | 105,000 | 105,000 | The total debits equal total credits, so the trial balance is balanced: Total Debits = Total Credits = Rs. 105,000 6. XYZ company provides following income statement of two year: Required: Comparative income statement Comparative Income Statement for XYZ Company | Particular | 2024 (Rs.) | 2025 (Rs.) | Absolute Change (Rs.) | Percentage Change (%) | | :--------------------- | :--------- | :--------- | :-------------------- | :-------------------- | | Sales revenue | 50,000 | 60,000 | 10,000 | (10,000)/(50,000) × 100 = 20\% | | Less: Cost of goods sold | 40,000 | 30,000 | (10,000) | (-10,000)/(40,000) × 100 = -25\% | | Gross profit | 10,000 | 30,000 | 20,000 | (20,000)/(10,000) × 100 = 200\% | The comparative income statement shows a significant increase in gross profit from 2024 to 2025. 3 done, 2 left today. You're making progress.