Write closing capital first
then add: drawings
less: additional capital (if given)
less : profit already distributed in given ratio
= Opening capital

Introduction:
The opening capital is the initial investment made by the owner(s) of a business at the start of its operations. It represents the amount of money or other assets contributed by the owner(s) to establish the business.

Importance of Opening Capital:
The opening capital is crucial as it provides the necessary funds for the business to start its activities. It is used to purchase assets, pay for initial expenses, and cover any liabilities. Additionally, the opening capital determines the owner's equity, which represents the net worth of the business.

Determining Opening Capital:
To find the opening capital, one must consider the following factors:

1. Capital Contributions: The owner(s) may contribute cash, equipment, inventory, or other assets to the business. These contributions are recorded as a part of the opening capital.

2. Retained Earnings: If the business is not a startup and has been operating for some time, the retained earnings from previous years can be included in the opening capital. Retained earnings are the profits that have been reinvested back into the business.

3. Net Losses: If the business incurred losses in previous years, these losses reduce the opening capital. Net losses represent the excess of expenses over revenues and are subtracted from the opening capital.

4. Additional Investments: If the owner(s) make additional investments during the accounting period, these contributions increase the opening capital.

5. Withdrawals or Drawings: If the owner(s) withdraw funds or assets from the business for personal use, these withdrawals decrease the opening capital.

Accounting Treatment:
The opening capital is recorded in the balance sheet of the business. It is shown under the owner's equity section, along with any changes in equity such as net profit or loss during the accounting period.

Profit and Loss Appropriation Account:
The Profit and Loss Appropriation Account is a statement that shows how the net profit or loss of the business is distributed among the owner(s). It includes various appropriations such as interest on capital, salaries, bonuses, and dividends.

Link to Opening Capital:
The Profit and Loss Appropriation Account indirectly affects the opening capital. If the business generates a net profit, it increases the owner's equity and subsequently the opening capital for the next accounting period. On the other hand, if there is a net loss, it reduces the opening capital.

Conclusion:
To find the opening capital, one must consider the capital contributions, retained earnings, net losses, additional investments, and withdrawals or drawings made by the owner(s). The opening capital is recorded in the balance sheet, and any changes in equity are reflected in the Profit and Loss Appropriation Account. Understanding the opening capital is essential for assessing the financial position and performance of the business.