Question

in the above case if the proprieter had invested ₹5000 as additional capital and withdrawn ₹2000 what will be your answer
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Answer 1

Answer:

Capital as on 31 march,2018 65000-6000 equals 59000.

Profit=Closing Capital - Opening Capital

59000-50000=9000

Answer 2

CORRECT QUESTION :

• ⊚ A starts a business and invests Rs. 50,000 on 1st April 2016. On 31st march 2017 his assests are Rs. 65,000 and liabilities are Rs. 6,000. Find out the amount of capital on 31st March 2017 and his profit. In the above case, if the proprietor had invested Rs. 5,000 as additional capital and withdrawn Rs. 2,000,the proprietor had invested Rs. 5,000 as additional capital and withdrawn Rs. 2,000, what will be your answer ?

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ANSWER :

• ❖ If A starts a business and invests Rs. 50,000 on 1st April 2016 and on 31st march 2017 his assests are Rs. 65,000 and liabilities are Rs. 6,000; then the amount of capital on 31st March 2017 will be Rs. 59,000 and his profit will be Rs. 9,000. Again, in the above case, if the proprietor had invested Rs. 5,000 as additional capital and withdrawn Rs. 2,000, then the his profit will be Rs. 6,000.

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SOLUTION :

❍ Given :-

• A starts a business and invests Rs. 50,000 on 1st April 2016.

• On 31st March 2017 his assests are Rs. 65,000 and liabilities are Rs. 6,000.

❍ To Calculate :-

• Capital as on 31st March 2017 = ?

• Profit for the year ended = ?

Also,

• If the proprietor had invested Rs. 5,000 as additional capital and withdrawn Rs. 2,000; then the Profit for the year = ?

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❍ Calculation :-

Here,

• Assets of the business = Rs. 65,000

• Liabilities of the business = Rs. 6,000

We know that,

• $\dag \: \: \underline{ \boxed{ \sf{ \: Capital = Assets - Liabilities \: }}}$

Using this formula we get,

• ★ Capital = Assets - Liabilities

➨ Capital = Rs. 65,000 - Rs. 6,000

∴ Capital = Rs. 59,000

Hence,

• ✎ Capital of the business on 31st March = Rs. 59,000.

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Now, we have,

• Opening Capital = Rs. 50,000

• Closing Capital = Rs. 59,000

We know that,

• $\dag \: \: \underline{ \boxed{ \sf{ \: Profit = Closing \: \: Capital - O pening \: \: Capital \: }}}$

Using this formula, we get,

• ★ Profit = Closing Capital - Opening Capital

➨ Profit = Rs. 59,000 - Rs. 50,000

∴ Profit = Rs. 9,000

Hence,

• ✎ Profit for the year = Rs. 9,000.

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Again,

• Additional Capital Invested = Rs. 5,000

• Drawings = Rs. 2,000

• Opening Capital = Rs. 50,000

• Closing Capital = Rs. 59,000

We know that,

• $\dag \: \: \underline{ \boxed{ \sf{ \: Profit = Closing \: \: Capital + Drawings - Additional \: \: Capital - O pening \: \: Capital \: }}}$

Using this formula, we get,

• ★ Profit = Closing Capital + Drawings - Additional Capital - Opening Capital

➨ Profit = Rs. 59,000 + Rs. 2,000 - Rs. 5,000 - Rs. 50,000

∴ Profit = Rs. 6,000

Hence,

• ✎ Profit of the business = Rs. 6,000.