From the following information, calculate capital at the beginning:

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

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Solution

Capital in the beginning

=

Capital at the end + Drawings – (Fresh Capital Introduced + Profit)

=

4,00,000 + 60,000 – (1,00,000 + 80,000)

=

Rs 2,80,000

Note: As per the solution, the profit should be of Rs 2,80,000; but, the answer given in the book is Rs 2,60,000.

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	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

Capital in the beginning	=	Capital at the end + Drawings – (Fresh Capital Introduced + Profit)
	=	4,00,000 + 60,000 – (1,00,000 + 80,000)
	=	Rs 2,80,000