Question

. Calculate the amount of external
equities from the following information
On 1st April 2015, Shyam started a
business with a capital of ` 20,000 and
a loan of ` 10,000 borrowed from a
friend. During 2015-16, he earned a
profit of ` 10,000, introduced an
additional capital of ` 12,000 and had
withdrawn ` 6,000 for his personal use.
On 31st March 2016 the total assets
were ` 10,000.
(a) ` 36,000 (b) ` 64,000
(c) ` 28,000 (d) ` 72,000

Answer 1

Answer:

Solution

Closing Capital = Closing Assets - Closing Liailities(i.e., y's Loan)

= ₹ 1,50,000 - ₹25,000 - ₹1,25,000.

Profits = closing Capital + Darwing - Additional Capital- Opening Capital

= ₹ 1,25,000 + ₹15,000 - ₹ 25,000 - ₹ 50,000 = ₹65,000.

Answer 2

Given,

Capital of 20,000, A loan of 10,000, Profit of 10,000,  additional capital of 12,000, Withdrawn 6,000 for his personal use, the total assets  were 10,000.

To find,

The amount of external  equities

Solution,

To solve this simple equation, we have to apply some formula based on accountancy

We know that,

∴Profit= Rs 10000, Opening Capital = Rs.20000, Additional Capital = Rs.12000, Drawing = Rs.6000

Profit = Closing Capital + Drawing + Additional Capital - Opening Capital

⇒10000=Closing Capital+6000+12000-20000

⇒Closing Capital = 6000+12000-20000-10000

⇒Closing Capital = 12000

We know that,

Closing Capital= Closing Assets - Borrowed Loan,

⇒4000=Closing Assets -10000

⇒Closing Assets = 10000-12000

⇒Closing Assets= 2000

None of the above, are the correct option.