Question

Cash in hand 25000 Cash at bank 15000
Furniture 3000
Purchase 6000
Sales 8000
Purchase return 500
Sales return 1000
Machinery 15000
Building 50000
Carriage 500
Insurance charges 1000
Capital ?

Answer 1

Answer:

Net Sales = 8000 - 1000 = 7000

Net Purchase = 6000 - 500 = 5500

Gross profit = 7000 - 5500 - 500 = 1000

Net profit = 1000 - 1000 = Nil.

Total Asset = 50000+15000+3000+25000+15000 = 108000.

Capital = Tolal Asset - External Liability = 108000- Nil = 108000.

Explanation:

As Net profit is nil, nothing is to added to capital and there is no External Liability here. Hope it will help you.