Question

Calculate Closing Capital:

Opening capital Rs. 1,70,000: Profit for the year Rs.1,20,000: Drawings Rs. 70,000. During the year proprietor sold ornaments of his wife For Rs.20,000 and invested the same in business.

Answer 1

Closing capital = Opening capital - Drawings + Profit + Additional Capital
                         = 170000 - 70000 + 120000 + 20000
                         = 240000