Multiple choice

A club has the following balances at the beginning of a year:

Subscription outstanding: Rs. 15,000 Subscription in advance: Rs. 4000 Stock of stationery: Rs. 11,000 8% on fixed deposits of Rs. 45,000 (for which interest of 3 months is due) Prepaid water bill: Rs. 2000 Billiards table: Rs. 20,000 (original cost Rs. 25,000)

Calculate the amount of capital fund.

  1. Rs. 89,000

  2. Rs. 94,900

  3. Rs. 89,900

  4. Rs. 97,900

  5. Rs. 85,900
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

Capital fund = Assets - Liabilities. Assets are o/s subscription, stationery stock, fixed deposits, interest accrued, prepaid bill and billiards table at book value, i.e. 15,000 + 11,000 + 45,000 + 900 + 2000 + 20,000 = Rs. 93,900. Liabilities are an advance subscription of Rs. 4000. Thus, capital fund = 93,900 - 4000

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