# Question No 18 Chapter No 8 – T.S. Grewal 11 Class

Question No 18 Chapter No 8

On 1st April,2018, the position of Rahman was as follows: Cash in Hand Rs 11,200, Cash at bank Rs 2,57,600; Bills Receivable Rs 68,800: Jai Ram (Dr.) Rs 16,000; Ram Kumar (Dr.) Rs. 48090; Office Furniture Rs 52,800; Stock in trade Rs 4,16,000; Doulat Ram(Cr.) Rs 1,74,720, Hari Ram (Cr.) Rs 2,16,960; Bills Payable Rs 80,000. What was the amount of capital of Rahman on that date? Show the Journal entry to open his books.

### Solution of Question No 18 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
Cash A/c Asset Debit  All assets always have debit balance.
Cash at Bank A/c Asset Debit  All assets always have debit balance
Bills Receivable A/c Asset Debit  All assets always have debit balance
Jai Ram A/c Asset Debit  Any account which has a debit balance will be treated as an Asset.
Ram Kumar A/c Asset Debit  Any account which has a debit balance will be treated as an Asset.
Office Furniture A/c Asset Debit  All assets always have debit balance
Stock in Trade A/c Asset Debit  All assets always have debit balance
Doulat Ram   A/c liability  Credit Any account which has a Credit balance will be treated as a Liability.
Hari Ram A/c liability  Credit Any account which has a Credit balance will be treated as a Liability.
Bills Payable A/c 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 = 11200+257600+68800+16000+48080+52800+416000

Total Assets =  8,70,480/-

Total Liabilities =  174720+216960+80000

Total Liabilities = 4,71,680/-

So,

Capital = 8,70,480 – 4,71,680

Capital = 3,98,800/- Ans.

Now Post this in the Journal day book: –

In the Books of Rahman

 Date Particulars L.F. Debit Credit 1st April,2018 Cash A/c Dr. 11,200 Cash at Bak A/c Dr. 2,57,600 Bills Receivable A/c Dr. 68,800 Jai Ram A/c Dr. 16,000 Ram Kumar A/c Dr. 48,080 Office Furniture A/c Dr. 52,800 Stock in Trade A/c Dr. 4,16,000 To Doulat Ram   A/c 1,74,720 To Hari Ram A/c 2,16,960 To Bills Payable A/c 80,000 To Capital A/c (B.Fig) 3,98,800 (Being opening balances of last year brought forward in current year )