Shri krishna has following assets and liabilities on 31th march 2020:b...
Calculation of Capital for Shri KrishnaAssets:
- Bank Balance: 50000
- Cash: 20000
- Stock: 12000
- Bills Receivable: 2000
Liabilities:
- Sundry Creditors: 16000
- Bills Payable: 5000
Calculation:To calculate the capital of Shri Krishna, we will use the following formula:
Capital = Total Assets - Total Liabilities
Total Assets = Bank Balance + Cash + Stock + Bills Receivable
Total Assets = 50000 + 20000 + 12000 + 2000
Total Assets = 84000
Total Liabilities = Sundry Creditors + Bills Payable
Total Liabilities = 16000 + 5000
Total Liabilities = 21000
Now, we will substitute the values in the formula to calculate the capital:
Capital = Total Assets - Total Liabilities
Capital = 84000 - 21000
Capital = 63000
Therefore, the capital of Shri Krishna as of 31st March 2020 is Rs. 63,000. This is the amount that Shri Krishna has invested in the business or the amount that the business owes to Shri Krishna.