Shri ram Lal has following assets and liabilities on 31st March 2020 : Cash₹500, Building₹40,000, Stock₹30,000, Due from sohan₹6,000, Due from rajan₹7000, Due to kushan₹3000, Due to Rakesh₹4,000. Find his capital.
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Explanation:
we use accounting equation
Asset = cash + Building + stock + due from sohan + due from rajan
Asset = 500 + 40,000+ 30000+ 6000 + 7000
= 83500
Liability = Due to kushan + due to rakesh
= 3000 + 4000
= 7000
we use formula,
ASSET = LIABILITY + CAPITAL
83500 = 7000 + capital
capital = 83500 - 7000
capita = 76,500
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