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Question No 21 Chapter No 5
Calculation of Total Assets, Opening and Closing Capital and Profit and loss
21. A commenced his cloth business on 1st April 2017 with a capital of Rs 30,000. On 31st March 2018, his assets were worth Rs 50,000 and Liabilities of Rs 10,000. Find out his closing capital and profits earned during the year.
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Opening Capital is given = 30,000
So, we have to find out Closing Capital
With the Help of Following Formula, we can find out this.
Closing Capital = Closing Assets – Closing Liabilities
Closing Capital = 50,000 – 10,000
Closing Capita = 40,000/-
To calculate the Profit or loss, we can use the following formula : -
Profit/Loss = Closing Capital – Opening Capital
Profit/Loss = 40,000 – 30,000
Profit of the year = 10,000/-
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Accounting & Commerce Educator
Sarbjit Singh holds a B.Com and M.Com degree and has over 12 years of teaching experience in double entry bookkeeping, financial accounting, and business studies.
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