Balance Sheet of Krishna and Suresh

Assets

• Cash: Rs. 50,000


• Inventory: Rs. 1,00,000


• Accounts Receivable: Rs. 75,000


• Building: Rs. 2,50,000


• Land: Rs. 1,50,000


• Equipment: Rs. 1,00,000

Total Assets: Rs. 7,25,000

Liabilities

• Accounts Payable: Rs. 50,000


• Bank Loan: Rs. 1,00,000


• Capital Accounts:
  
  
  
  • Krishna: Rs. 3,00,000
  
  
  • Suresh: Rs. 1,75,000
  
  
  
  

Total Liabilities: Rs. 7,25,000

Explanation:
The balance sheet of Krishna and Suresh shows the financial position of their business on a particular date. The balance sheet consists of assets, liabilities, and equity. The assets are the resources of the business that have economic value and are expected to provide future benefits. The liabilities are the obligations of the business to pay off its debts. The equity represents the owner's stake in the business.

Assets:
Krishna and Suresh's business has a total asset value of Rs. 7,25,000. The assets include cash, inventory, accounts receivable, building, land, and equipment. Cash is the amount of money that the business has on hand. Inventory is the goods that the business has in stock and is yet to be sold. Accounts receivable is the money that the business is yet to receive from its debtors. Building, land, and equipment are fixed assets that the business owns and uses to generate revenue.

Liabilities:
The liabilities of Krishna and Suresh's business include accounts payable and bank loan. Accounts payable is the amount of money that the business owes to its creditors. The bank loan is the amount of money that the business has borrowed from the bank. The capital accounts of Krishna and Suresh are also included in the liabilities section. The capital accounts show the amount of money that the partners have invested in the business.

Equity:
The equity of Krishna and Suresh's business is the difference between the assets and liabilities. The equity represents the owner's stake in the business. In this case, the equity is Rs. 4,75,000. The profit sharing ratio of Krishna and Suresh is 3:2 respectively. This means that they will share the profits in the same ratio.

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