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

Question No. 19 - Chapter No.8 - T.S. Grewal +1 Book 2019

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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