Mr joshi started a busines with acapital of 500000 at the end of year cash in hand 15000cash at bank70000 sundry debtors120000 stock 240000furniture 75000machinary 200000creditor on this date 80000during the year introduce further capital .150000and withdrew 90000 clculate profit bnd loss
Answers
Primary Capital, furniture and machinery are neither part of Profit nor Loss in the running business.
And the Stock is just for sale till now. So it will also not be a part of profit or loss. It will be considered as inventory.
Here we have
- Total Earnings
Cash in Hand = 15,000
Cash at Bank = 70,000
Sundry Debtors (Amount Receivables) = 120,000
More capital added = 150,000
Money Withdrawn = 90,000
Total Earnings = 445,000
- Creditors (Amount Payable) = 80,000
Profit = 445,000 - 80,000
= 365,000
Given:
Capital = 500000
Cash in hand = 15000
Bank = 70000
Debtors = 120000
Stock = 240000
Furniture = 75000
Machinery = 200000
Creditor = 80000
Further capital = 150000
Withdrawal = 90000
To find:
The amount of profit or loss incurred.
Solution:
To find the total amount,
Total amount = Capital + Cash in Hand + Bank + Debtors + More capital + Withdrawal
500000 + 15000 + 70000 + 120000 + 150000 + 90000
Hence,
Total Earnings = 945,000
To find the amount to be spent,
Amount to be spent = Stock + Furniture + Machinery + Creditor
240000 + 75000 + 200000 + 80000
Amount to be spent = 595,000
Amount left = 945000 - 595 00
+350000
Hence, Profit = 350000