SCENARIO 1

Income Statement
1) You start a Perfume business with 300,000 Initial Capital Rs.
2) You buy 1000 units of stock worth 200,000 for cash Revenue (Sales)
3) You hire an employee for a monthly salary of Rs. 7500 - COGS (Purchases)
4) Rent payable is Rs. 12500 Gross Profit 0
5) You sell 1000 units for a Selling Price of Rs 300 for cash - Salary
6) At the end of the month, you pay all expenses. - Rent
7) Taxes are paid @ 30% EBT 0
Calculate the profit. - Tax

Net Income 0

ACCOUNTS AFFECTED
1) + Equity and + Cash
2) + Inventory and - Cash
3) No entry
4) No entry
5) + Revenue and + Cash
- Inventory and - COGS (at cost)
6) - Salary, - Rent and - Cash
7) - Taxes and - Cash
 Balance Sheet
Liability Rs. Asset Rs.

Equity Inventory
Reserves & Surplus Cash

0 0
 SCENARIO 2

1) You start a Shampoo business with 100,000 Initial Capital

2) You buy 1000 units of stock worth 50,000 for 50% on credit and 50% for cash
3) Money is payable after 30 days
4) You hire an employee for a monthly salary of Rs. 5000
5) Rent and Electricity payable is Rs. 5000
6) You sell 800 units for a Selling Price of Rs 100, 60% for Cash and 40% Credit
7) You receive money from your Customers after 25 days
8) You have to pay your suppliers, employee, and utilities.
9) Taxes are paid @ 40%.
10) What is the closing balance of stock and profit?

ACCOUNTS AFFECTED:
1) + Equity and + Cash
2) + Inventory, - Cash & + Payables
3) No entry
4) No entry
5) No entry
6) + Revenue, + Cash & + Receivables
- COGS & - Inventory
7) + Cash & - Receivables
8) - Cash, - Payables, - Rent & Electricity & - Salary
9) - Taxes & - Cash
 Income Statement Balance Sheet
Rs. Liability Rs. Asset
Revenue (Sales)
- COGS (Purchases) Equity Current Assets:
Gross Profit ₹0 Reserves & Surplus ₹0 Inventory
- Salary Cash
- Rent & Electricity Current Liabilities: Receivables
EBT ₹0 Payables ₹0
- Tax
₹0
Net Income ₹0
Units Rs.

0 ₹0
 SCENARIO 3 - For Practice

Nov. 01: Issued 20,000 shares of common stock at $30 per share
Nov. 03: Paid office rent for the month of November $500.
Nov. 06: Purchased office supplies $250 (Expenditure).
Nov. 12: Purchased office equipment on account $4,500 (Asset)
Nov. 16: Purchased business car for $25,000. Paid $10,000 cash and remaining on credit.
Nov. 21: Billed clients $24,000 on account as revenue
Nov. 28: Paid utility bills for the month of November $180.
Nov. 29: Received $20,000 cash from clients billed on November 21.
Nov. 30: Paid salary for the month of November $7,500
Nov. 30: Declared dividends of 5000