Question

A commence his cloth business on 1st April, 2015 with capital of Rs 60,000.
On 31st March, 2016, his assets were worth Rs 1,00,000 and liabilities of Rs 20,000. Find out his closing capital and profits earned during this year.

Answer 1

i have attached below the solution of this question .. pls refer the attachment

Answer 2

Answer:

Closing capital is 80,000

Profit earned during this year is 20,000

Explanation:

In this question

We have been given that

Value of opening capital is 60,000 Assets is 20,000 rupees and Liabilities is 1,00,000 rupees.

So, Closing capital = Opening capital + profit

Closing capital = 60,000 + profit

Therefore,  Assets = Closing capital + Liabilities

1,00,000 = (60,000 + profit) + 20,000

1,00,000 = 80,000 + profit

profit = 20,000

Then, Closing capital = 60,000 + 20,000

                                    = 80,000

Hence, Closing capital is 80,000 and profit earned during this year is 20,000