Calculate Owner's Capital

>> July 5, 2011


Calculate capital as on 01Jan 2001 in each of the following cases:

a) On 31.12.2001 the total assets and external liability were Rs 30000 and Rs 900 respectively. During the proprietor earned Rs 3000
b) If in the preceding case the proprietor had introduced additional capital Rs 3000 and had withdrawn Rs 1800 for personal purpose.

Tanish from India
Tanish ! We can calculate owner's capital with accounting equation formula.

 Total Assets =  Total Liabilities

Assets = External Liabilities + Net Owner's Capital + Revenue - Losses 

Or 

Assets = External Liabilities + Owner's capital + Fresh Capital - Withdraw of Capital  + Revenue - Losses

30000 = 900 + X + 3000 - 1800 + 3000

30000 = X + 5100

30000 - 5100  = X

X = 24900

Owner's Capital = Rs. 24900





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