Question No 19 Chapter No 8 - T.S. Grewal 11 Class

Question No 19 Chapter No 8

On 1st April 2018 the position of Tendulkar was as follows: Stock in trade Rs 2,88,000; Bills Payable Rs 48,000: Cash in Bank Rs 2,16,000; Plant and Machinery Rs 1,20,000; Owing by Debtors Rs 60,000; Owing to Creditors Rs 96,000; Investment Rs 2,40,000. Loan from S.K. Garg Rs 1,80,000. What was the amount of Tendulkar's capital on the date ? Show an opening Journal entry. 

Solution of Question No 19 Chapter No 8: - 

So to solve this question first we have to prepare the working Note shown as below:

To Calculate the amount of capital we should use the following formula. 

"Capital = Total Assets - Total Liabilities"

To apply this formula we have to recognise the assets and liabilities accounts first. This is shown below: -

Name of Accounts	Type of Account	Debit/ Credit	Reason of Debit/Credit
Stock in Trade A/c	Asset	Debit	All assets always have debit balance.
Bills Payable A/c	Liability	Credit	B/P is Liability for the business So, All Liabilities are always have Credit balance
Cash at Bank A/c	Asset	Debit	All assets always have debit balance
Plant & Machinery A/c	Asset	Debit	All assets always have debit balance
Qwing by debtors (Sundry Debtors)	Asset	Debit	All assets always have debit balance
Owing to creditors (Sundry Creditors)	Liability	Credit	All Liabilities are always have Credit balance
Investment A/c	Asset	Debit	All assets always have debit balance
Loan From S.K. Garg	Liability	Credit	All Liabilities are always have Credit balance

Note: You did not need to prepare above table in the exam, Because this is just for your understanding.

Total Assets = 288000+216000+120000+60000+240000

Total Assets = 9,24,000/-

Total Liabilities = 48000+96000+180000

Total Liabilities = 3,24,000/-

So, 

Capital = 9,24,000- 3,24,000

Capital = 6,00,000/- Ans.

Now Post this in the Journal day book: -

In the Books of Rahman 

Date	Particulars		L.F.	Debit	Credit
1st April,2018	Stock in Trade A/c	Dr.		2,88,000
	Cash at Bank A/c	Dr.		2,16,000
	Plant & Machinery A/c	Dr.		1,20,000
	Sundry Debtors A/c	Dr.		60,000
	Investment A/c	Dr.		2,40,000
	To Bills Payable A/c				48,000
	To Sundry Creditors A/c				96,000
	To S.K. Garg Loan's A/c				1,80,000
	To Capital A/c(See W.Note)				6,00,000
	(Being opening balances of last year brought forward in current year )

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Check also Question No 18 Chapter No 8 - T.S. Grewal 11 Class

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