Question

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

Answer 1

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.