Illustration 5. Prepare the accounting equation to show the effect of following transactions in the books of \( M / s \) Goenka Enterprises :
\( \begin{array}{llr}\text { 1. Started business with cash as on 1st April 2018 } & 20,00,000 \\ \text { 2. Purchase goods for cash } & 4,00,000 \\ \text { 3. Life Insurance premium paid in cash } & 1,00,000 \\ \text { 4. Purchase goods on credit } & 2,00,000 \\ \text { 5. Paid rent } & 40,000 \\ \text { 6. Sold goods to Johny at cost price } & 40,000 \\ \text { 7. Sold goods for cash. (Cost price ₹ 8,000) } & 12,000 \\ \text { 8. Payment made to creditors } & 1,72,000\end{array} \)
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\( 8.12 \)
Accounting Equation
9. Purchase Machinery
\( 10,00,000 \)
10. Paid three months advance fire insurances premium
3,000
