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/-
Advertisement-X
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 ) | |||||
Thanks Please share with your friends
Comment if you have any question.
Check also Question No 18 Chapter No 8 – T.S. Grewal 11 Class
Check out T.S. Grewal +1 Book 2019 @ Amazon.in