Question

Calculate the Capital :- Assets :- Building ₹20000, Furniture ₹15000, Debtors ₹30,000, Investment ₹10,000, Cash at Bank ₹5000, Plant and Machinery ₹20,000 Liabilities :- Bills payable ₹18000, Creditors ₹20700, Outstanding Wages ₹1,250



30,050​

Answer 1

ANSWER :

• ❖ If the Assets are : Building ₹ 20,000; Furniture ₹ 15,000; Debtors ₹ 30,000; Investment ₹ 10,000; Cash at Bank ₹ 5,000; Plant and Machinery ₹ 20,000 and the Liabilities are : Bills Payable ₹ 18,000; Creditors ₹ 20,700; Outstanding Wages ₹ 1,250; then the Capital will be ₹ 60,050.

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SOLUTION :

❒ Given :-

• Building = Rs. 20,000

• Furniture = Rs. 15,000

• Debtors = Rs. 30,000

• Investment = Rs. 10,000

• Cash at Bank = Rs. 5,000

• Plant and Machinery = Rs. 20,000

• Bills payable = Rs. 18,000

• Creditors = Rs. 20,700

• Outstanding Wages = Rs. 1,250

❒ To Calculate :-

• Capital = ?

❒ Required Formula :-

• From the Accounting Equation :

$\dag \: \: \underline{ \boxed{ \bold{ \: \: Assets = Capital + Liabilities \: \: }}}$

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❒ Calculation of Total Assets :-

Given that,

• Building = Rs. 20,000
• Furniture = Rs. 15,000

• Debtors = Rs. 30,000

• Investment = Rs. 10,000

• Cash at Bank = Rs. 5,000

• Plant and Machinery = Rs. 20,000

∴ Total Assets = Building + Furniture + Debtors + Investment + Cash at Bank + Plant and Machinery

➨ Total Assets = Rs. 20,000 + Rs. 15,000 + Rs. 30,000 + Rs. 10,000 + Rs. 5,000 + Rs. 20,000

➨ Total Assets = Rs. 1,00,000

• So, Value of Total Assets = Rs. 1,00,000

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❒ Calculation of Total Liabilities :-

Given that,

• Bills Payable = Rs. 18,000
• Creditors = Rs. 20,700

• Outstanding Wages = Rs. 1,250

∴ Total Liabilities = Bills Payable + Creditors + Outstanding Wages

➨ Total Liabilities = Rs. 18,000 + Rs. 20,700 + Rs. 1,250

➨ Total Liabilities = Rs. 39,950

• Value of Total Liabilities = Rs. 39,950

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❍ Calculation of Capital :-

We have,

• Value of Total Assets = Rs. 1,00,000

• Value of Total Liabilities = Rs. 39,950

We know that,

• ★ Assets = Capital + Liabilities

Substituting the values in the formula we get,

• ✠ Assets = Capital + Liabilities

⇒ Rs. 1,00,000 = Capital + Rs. 39,950

⇒ Rs. 1,00,000 - Rs. 39,950 = Capital

⇒ Rs. 60,050 = Capital

∴ Capital = Rs. 60,050

• Hence, Value of Capital is Rs. 60,050.