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

• 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.
  $$\text{Assets} = \text{Liabilities} + \text{Owner's Equity}$$ $$(\text{Cash } \uparrow \text{ Rs. } 20,000 + \text{ Furniture } \uparrow \text{ Rs. } 30,000) = 0 + (\text{Capital } \uparrow \text{ Rs. } 50,000)$$ $$\text{Rs. } 50,000 = \text{Rs. } 50,000$$

• 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).
  $$\text{Assets} = \text{Liabilities} + \text{Owner's Equity}$$ $$(\text{Plant } \uparrow \text{ Rs. } 10,000 - \text{ Cash } \downarrow \text{ Rs. } 6,000) = (\text{Accounts Payable } \uparrow \text{ Rs. } 4,000) + 0$$ $$\text{Rs. } 4,000 = \text{Rs. } 4,000$$

• 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: $\boxed{\text{Rs. } 54,000 = \text{Rs. } 54,000}$

• Comparative Income Statement for XYZ Company

The comparative income statement shows a significant increase in gross profit from 2024 to 2025.