On 1st January 1999, the balances on different accounts in the books of Bhushan were as follows: Stock on hand Rs. 3,500; Investments Rs. 3,000; Loans from Ramji Rs. 3,500; Owing by debtors Rs. 2,500; Owing to creditors Rs. 1,500; Plant and Machinery Rs. 3,000; Bills payable Rs. 1,250; Cash at bank Rs. 2,000.
The amount of capital of Bushan on this date was.

Rs. 750

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Rs. 1,750

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Rs. 2,750

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Rs. 7,750

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Solution

The correct option is D Rs. 7,750
Capital fund = Total assets - Total liabilities (WN 1)
= 14,000 - 6,250
= RS-7,750.

Working note:-
Total assets :-
= stock + investments + debtors + plant and machinery + cash
= 3,500 + 3,000 + 2,500 + 3,000 + 2,000
= RS-14,000.

Total liabilities :-
= Loans from Ramji + Creditors + Bills payable
= 3,500 + 1,500 + 1,250
= RS-6,250.

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PRACTICAL PROBLEMS

A and B are in Partnership. Their Capitals on 1^st April 2010 were Rs 30,000 each. The assets and liabilities as on 31^st March 2011 were as follows. Cash in hand Rs 2,400, Cash at Bank Rs 16,000 Bill Receivable Rs 4,000, Debtors Rs 28,600 Stock Rs 26,000. Machinery Rs 14,000, furniture Rs 8,000, Bills Payable Rs 3,000 Sundry creditors Rs 6,000 Outstanding salary Rs 800.

Additional Information:

1) Provide Rs 600 as Bad Debts and 5% R.D.D.

2) Depreciate furniture @ 5% p.a. and Machinery @ 10% p.a.

3) Stock is found undervalued by Rs 2,000.

4) Sundry creditors are found overvalued by Rs 1,000.

5) Prepaid Insurance Rs 2,000.

6) Additional capital introduced by partners Rs 4,000 each.

7) Drawings of ‘A’ Rs 3,000 and ‘B’ Rs 2,000 calculate the profit for the year ended 31^st March 2011.

Monika has the following assets and liabilities as on 31st March, 2016. Ascertain her capital. Cash Rs. 50,000, bank Rs. 95,000, debtors Rs. 36,000, plant and machinery Rs. 1,60,000, building Rs. 4,00,000, furniture Rs. 48,000, creditors Rs. 44,000, bills receivable Rs. 1,13,000 and bills payable Rs. 47,000.

Following is the Receipt and Payment account of Rohatgi Trust :

Receipt and Payment Account for the year ending December 31, 2006
Receipts		Amount Rs	Payments	Amount Rs
Cash in hand		14,000	Rent	6,000
Cash at Bank		60,000	Salary	12,000
Subscriptions: 2005 2006 2007	5,000 83,000 3,000	91,000	Postage Electricity charges Purchase of furniture Books	300 6,000 20,000 3,000
Sale of Investment		90,000	Defence Bonds	1,50,000
Interest on investment		2,000	Help to needy students	22,000
Sale of old furniture (book value Rs 3,000)		3,200	Cash in hand Cash at bank	10,900 30,000
		2,60,200		2,60,200

Prepare Income and expenditure account for the year ended December 31, 2006, and a balance sheet as on that date after the following adjustments: Subscription for 2006, still owing were Rs 7,000. Interest due on defence

bonds was Rs7,000, Rent still owing was Rs 1,000. The Book value of investment sold was Rs 80,000, Rs 30,000 of the investment were still in hand. Subscription received in 2006 included Rs 400 from a life member. The total furniture on January 1, 2006 was worth Rs 12,000. Salary paid for the year 2007 is Rs 2,000.

Himanshu maintains his books on single entry system. His position was as under on 1st January 2012

Cash in hand Rs 600; Cash at Bank Rs 11,000; Stock Rs 11,200; Debtors Rs 6,914; Furniture Rs 400; Sundry Creditors Rs 8,114.

The position of Himanshu on 31st December 2012 was as follows:

Cash in hand Rs 760; Cash at Bank Rs 4,800; Stock Rs 9,360; Debtors Rs 9,240; Furniture Rs 500; Creditors Rs 6,000.

He withdrew Rs 13,000 from the business on 2nd January 2012 out of which he spent Rs 11,200 for purchasing of a motor-car for business. Taking the above into consideration, find out the profit of Himanshu.

Q. Journalise the following transaction:
Assets: Cash in Hand Rs.2,000; Cash at Bank Rs. 68,000; Stocks of goods Rs. 40,000; Machinery Rs. 1,00,000; Furniture Rs. 10,000; M/s. Narain Bros. owe Rs. 15,000; M/s B.K. Bros. owe Rs. 25,000.
Liabilities: Loan Rs. 50,000; sum owing to Jacob Bros. Ltd. Rs. 20,000.

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