Question

Subham commenced business of selling bicycles on April 1,2007 with a capital of ` 25 lakhs. 

Subham acquired during the year, following assets fro which the payments were made through bank.

                                                      Amount (` )

      Land                                          7,50,000

      Building                                  12,50,000

      Office equipments                    1,20,000

      Furniture and fittings                1,30,000

Answer 1

Capital in the beginning = 25,00,000
expenses = land + building + office equipments + furniture and fittings
                  = 7,50,000+12,50,000+1,20,000+,1,30,000
                  =22,50,000
Capital at the end of year = capital in beginning - expenses during the year
                                            =25,00,000-22,50,000
                                            =2,50,000