Question

From the following information, Calculate Capital at the beginning :
[tex]
\begin{tabular}{c c}\\
\begin{center}\\
& Rs. \\
Capital at the end of the year & 4,00,000 \\
Drawings made during the year & 60,000 \\
Fresh Capital introduce during the year & 1,00,000 \\
Profit of the current year & 80,000
\end{center}
\end{tabular}
[/tex]

Answer 1

Answer:

use the formula

Capital= Current Assests - Current Liability

Answer 2

The capital at the beginning is Rs 8,20,000.

Explanation:

Given:

Capital at the end of the year is Rs 4,00,000.

Drawings made during the year is Rs 60,000.

Fresh Capital introduced during the year is Rs 1,00,000.

Profit of the current year is Rs 80,000.

Now, to calculate Capital at the beginning.

Closing Capital = 4,00,000.

Drawings = 6,00,000.

Additional Capital = 1,00,000.

Profit = 80,000.

So, to get the opening Capital we put formula:

Opening Capital = Closing Capital + drawings - additional Capital - profit.

                            $=4,00,000+6,00,000-1,00,000-80,000$

                            $=10,00,000-1,80,000$

                            $=8,20,000.$

Therefore, the capital at the beginning is Rs 8,20,000.