Multiple choice

V & T are in partnership. They took W as partnership for equal share of which he brought the following: Particulars Rs. Cash $5,000$ Bank $8,000$ Plant $20,000$ Stock $12,000$ Creditors $3,000$ On admission W's Capital A/c will be credited by _________________.

  1. Rs.$13,000$
  2. Rs.$45,000$
  3. Rs.$32,000$
  4. Rs.$42,000$
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

W's capital is the net value of assets brought in: Cash (5000) + Bank (8000) + Plant (20000) + Stock (12000) - Creditors (3000) = 42,000.

AI explanation

W's capital account is credited only with the assets he brings into the firm, not with any liabilities he assumes. The total value of the assets introduced is the sum of cash Rs. 5,000, bank Rs. 8,000, plant Rs. 20,000, and stock Rs. 12,000, which equals Rs. 45,000. Because he also brings creditors of Rs. 3,000, this liability amount is deducted from the gross assets to find his net capital contribution. Therefore, the net capital amount credited to W's capital account is Rs. 45,000 minus Rs. 3,000, equaling Rs. 42,000.

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