Question

A commence his cloth business on 1st April,2015 with capital of Rs60,000. On 31st March, 2016, his assets were worth Rs 1,00,000and liabilities of Rs20,000.Find out his closing capital and profits earned during the year.

Answer 1

closing  capital = opening capital +profit 
 closing capital = 60,000+profit  ---  this s equation 
substitute this equation in capital 


asset = capital + liability 
1,00,000= (60,000+profit) + 20,000
profit =1,00,000-80,000
          =20,000

closing capital or capital = 60,000+20,000
                                       =80,000