CASE STUDY 1

Accounting equations:

Sam decided to operate a hot dog stand near a football stadium during football season. The following
transaction describes the financial effects of his activities in setting up the business and operating it for
one week.

I. He deposited Rs 30,000 in SBI bank.

II. He rented a site, paying Rs 4500 for the right to use location on the following three Saturdays.
III. A tent and other other equipment were purchased for Rs 11000 from a concern and cheque was
issued as a payment
IV. Stock was purchased from Kayat worth Rs 30,500; Sheikh paid Rs 10,000 by cheque and
promised to pay the balance on Monday after the first game.
V. All the stock was sold for cash on the first Saturday and sheikh deposited Rs 65,000 in bank
account.
VI. 1/3rd of the rent was applicable to the business and other was used for his personal use After
that , Sam paid the balance to Kayat .
VII. Sam have sold his equipment have value of Rs 4700 at the end in Rs 5000.

Summarize the effect of these transactions on the assets, liabilities and owner’s equity of Sam hot dog
business.