. A and B were partners in a firm. Their capitals at the end of the year ending on 31.3.2021 were Rs. 3,00,000 and Rs. 1,50,000 respectively. During the year B withdrew 10,000 which was debited to his capital account. Profit for the year ended 31st March, 2021 was 32,000 which was credited to their capital accounts. During the year B introduced additional capital 32,000. What was B’s capital on 1.4.2020?
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Answer:
Correct option is (C) ₹ 1,12,000
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Given:
- A and B are partners in a firm, with closing capitals Rs 3,00,000 and Rs 1,50,000 respectively.
- B withdrew Rs 10,000 during the year.
- The profit for the year was Rs 32,000.
- B also introduced an additional capital of Rs 32,000 during the year.
To find: The opening capital of B.
Answer:
Since there is no profit-sharing ratio mentioned in the question, it is assumed that they're sharing it equally, i.e., 1:1.
Opening capital = Closing capital + Drawings - Share of profit - Additional capital introduced
B's share of profit = B's profit share × The profit for the year
B's share of profit = 1/2 × Rs 32,000
B's share of profit = Rs 16,000
Now that we have all the required amounts, let's substitute them into the formula.
Opening capital of B = Rs 1,50,000 + Rs 10,000 - Rs 16,000 - Rs 32,000
Opening capital of B = Rs 1,12,000
Therefore, B's opening capital/capital as on 1st April, 2020, is Rs 1,12,000.
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