R started a business with cash Rs. 50, 000. Purchased goods worth Rs. 20, 000 from M on credit. Sold goods to S costing Rs. 3, 000 for Rs. 3, 600 (cash)
The accounting equation on the basis of these transactions will be

Initial cash: Rs. 50,000. After purchasing goods on credit: Assets = Rs. 50,000 (cash) + Rs. 20,000 (goods) = Rs. 70,000; Liabilities = Rs. 20,000 (creditor M); Equity = Rs. 50,000. After sale: Cash increases by Rs. 3,600, goods decrease by Rs. 3,000 (cost), and profit Rs. 600 increases equity. Final: Assets = Rs. 70,600 (Rs. 53,600 cash + Rs. 17,000 goods); Liabilities = Rs. 20,000; Equity = Rs. 50,600.