Question No 27 Chapter No 5
27. On 31st March 2018, the total assets and external liabilities were Rs 2,00,000 and 6,000 respectively. During the year, the proprietor had introduced capital of Rs 20,000 and withdrawn Rs 12,000 for personal use. He made a profit of Rs 20,000 during the year. Calculate the capital as on 1st April 2017.
The solution of Question No 27 Chapter No 5: –
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Following items are already given in the question: –
- Additional Capital= 20,000
- Drawing = 12,000
- liabilities= 6,000
- Total Assets= 2,00,000
- Profit = 20,000
So, to find out the capital as on 1st April 2017.
1st with the Help of Following Formula, we can find out Closing Capital :
Closing Capital = Total assets – Total Liabilities
Closing Capital = 2,00,000 – 6,000
Closing Capital = 1,94,000/-
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Now, with the Help of Following Formula, we can find out Opening Capital or capital as on 1st April 2017:
Opening Capital = Closing Capital – Addition – Profit + Drawing
Opening Capital = 1,94,000 – 20,000 – 20,000 + 12,000
Opening Capital/ capital as on 1st April 2017 = 1,66,000/-
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