Question

The drawings of a proprietor for the year 2202 are Rs. 30,000. Profit for the year Rs.50,000 and capital at the end Rs.1,40,000. Calculate the capital at the beginning

Answer 1

I think correct answer is 160000

• capital=140,000
• profit=150,000
• drawing=30,000
• so capital+profit-drawing=160,000

Answer 2

The capital at the beginning of the year will be ₹120,000.

Definition of capital at the beginning:

Capital is the amount invested by the owner in the business with the point of view of earning a good return for a long time as the business is considered perpetual, the capital shown in the books of accounts on the first day of the financial year is known as opening capital and which is shown on the last day of financial year is known as closing capital.

Given: The drawings of a proprietor for the year 2022 are Rs. 30,000.  

           Profit for the year Rs.50,000.

           capital at the end Rs.1,40,000.

To Find: capital at the beginning

Solution:

Calculation of capital at the beginning:

Capital at the end:                     ₹140,000

+ Drawings                                  ₹30,000

- profit                                          (₹50,000)

Capital at the beginning:            ₹120,000

Thus, the capital at the beginning of the year will be ₹120,000.