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.
The solution of Question No 21 Chapter No 5: –
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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