Question

A commenced his cloth buiseness on 1st April ,2014 with a capital of rs.30000 on 31st March 2015,his assets are worth rs.50000and liabilities of rs.10000 find out his closing capital and profit earned during the year​

Answer 1

Answer:

Given:

A commenced his cloth business on 1st April, 2017 with a capital of ₹ 30,000. On 31st March 2018, his assets were worth ₹ 50,000 and liabilities of ₹ 10,000.

Now, to find out his closing capital and profits earned during the year.

On 31st March 2018,

Assets = ₹ 50,000.

Liabilities = ₹ 10,000.

Opening Capital = ₹ 30,000.

So, to get the Closing capital we put formula:

Closing Capital = Assets - Liabilities.

\begin{gathered}Closing\ Capital=50000-10000\\\\Closing\ Capital=40000.\end{gathered}

Closing Capital=50000−10000

Closing Capital=40000.

Thus, Closing Capital is ₹ 40,000.

Now, to get the profits earned by putting formula:

Profit = Closing Capital - Opening Capital.

Profit=40000-30000Profit=40000−30000

Profit=10000.Profit=10000.

Hence, profit earned is ₹ 10,000.

Therefore, during the year his closing capital is ₹ 40,000 and his profits earned is ₹ 10,000.