On what basis should the opening capital Account balance be, if after 5 years of business, 1st time a Balance Sheet is prepared.??

Posted 10 months, 3 weeks ago by CA Rohan Jain


Capital means Assets-Liabilities, so go with this concept for last 5 years. Take assets & liabilities for last 5 years. The best way to arrive at the capital balance is to prepare the accounts for last 5 years.

Posted 10 months, 3 weeks ago by Mukesh Jain CA


Thank you for your reply.Assesse is not having any asset except some cash, stock and Furniture ofcourse.and none liability.

He has filed ITRs for last two years, so I have just added the assumed profit for 1st 3 years and taxable income of last 2 years to arrive at the opening capital balance after deducting the assumed withdrawals..

Posted 10 months, 3 weeks ago by CA Rohan Jain


@ CA Rohan,

That seems to be a perfect move. It is not compulsory to file return to make statement of Affiars. For withdrawls scrutinize bank statement. Sometime bank withdrawls including card purchases are more than actuals disclosed.

Posted 10 months, 3 weeks ago by CA Pulkit Sharma


@CA Pulkit Sharma

Ok, and Thank you for your valuable suggestion..

Posted 10 months, 3 weeks ago by CA Rohan Jain


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