From the following particulars, prepare the Proprietor's Capital Account for the year 2022:
Apr. 1: Started business with ₹45,000
May 10: Withdrew ₹10,000 from bank for personal use
July 15: Further capital introduced ₹55,000
Aug. 20: Goods withdrawn for personal use ₹4,000
Sept. 21: Life insurance premium paid ₹5,000
Nov. 24: Income tax paid ₹12,000
Mar. 31: Profit for the year ₹36,000
Answer (2)
The Proprietor's Capital Account for 2022 is calculated by starting with an initial capital of ₹45,000, adding ₹55,000 in additional capital and ₹36,000 in profit, while subtracting withdrawals and expenses totaling ₹31,000. The final capital balance at the end of the year is ₹105,000. This structured approach allows for a clear view of the financial position of the proprietor's investments.
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To prepare the Proprietor's Capital Account for the year 2022, we need to consider the initial capital introduced, any additional capital introduced during the year, and deductions made due to withdrawals for personal use, along with overall earnings or losses.
The Proprietor's Capital Account can be structured as follows:
Proprietor's Capital Account
DateParticularsAmount (₹)DateParticularsAmount (₹)Apr. 1To Capital Introduced45,000May 10By Drawings10,000July 15To Further Capital Introduced55,000Aug. 20By Goods Withdrawn4,000Sept. 21By Life Insurance Premium paid5,000Nov. 24By Income Tax Paid12,000Mar. 31By Balance c/dXXXXXMar. 31By Profit36,000-------------------------------------------------------------------------------------------------------------------------Total100,000Total67,000
Calculating the closing balance:
Total Credits: ₹45,000 (initial) + ₹55,000 (further capital) = ₹100,000
Total Debits: ₹10,000 + ₹4,000 + ₹5,000 + ₹12,000 = ₹31,000
Remaining in profit: ₹36,000
Therefore, closing balance:
Closing Balance = ₹100,000 - ₹31,000 + ₹36,000 = ₹105,000
The closing balance in the capital account on March 31st is ₹105,000.
