Calculate the Closing Capital and Profit of the year if;
Capital introduce by businessman Rs. 100,000. He also took the loan from his friend Rs. 50,000. Creditors at the end of the year was Rs. 20,000 and Closing fixed assets Rs, 2,00,000 bank balance Rs. 50,000. Drawings Rs. 2000 additional capital Rs.30000
Answers
Answer:
closing capital=620000
Step-by-step explanation:
In case there is no double entry system is followed, profit can be calculated by comparing the opening and closing capital. In the given situation this can be calculated as:
Opening Capital Rs.200000
Add: Capital Introduced Rs.200000
Add: Profit for the year Rs. 250000
Less: Loss for the year Rs.NIL
Less: Drawings Rs. 30000
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Capital at the end of the year Rs.620000
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Loan taken is a liability and loan given is asset, that will not affect the capital.