Mr. Raguvir commenced business of trading in electronic goods with an initial capital of Rs15,00,000. Out of the said Rs15,00,000, he paid Rs10,00,000 towards purchase of electronic goods. He further spent Rs2,00,000 on furnishing the shop and Rs35,000 for purchase of computer and printer. Rs 10,000 is yet to be paid to supplier of computer. He sold goods costing Rs 5,00,000 for Rs7,00,000 in cash and goods costing Rs. 2,50,000 for Rs. 3,10,000 on credit. Goods sold on credit for Rs 25,000 were returned being defective. These goods (costing 20,000) were returned to the supplier. Looking into the response, he decided to trade in home appliances also and further invested Rs.5,00,000.He purchased electronic goods and home appliances for 8,00,000 out of which purchases of 2,00,000 were on credit. 1. What is the amount of capital invested by Mr. Raguvir in business? a) 35,00,000 b) 15,00,000 c) 20,00,000 d) 10,00,000 2. What is the amount of total purchase? a) 18,10,000 b) 17,90,000 c)18,00,000 d) 17,00,000 3. What is the amount of outstanding Expenses?
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1. Operational capital = 15,00,000
2. Fixed assets = building + computer + printers = 2,00,000+ 35,000 = 2,35,000
3. Purchase = Total – returns – loss of purchase = 10,00,000 + 8,00,000 –
20,000-50,000 = 17,3000
4. Long term liability = nil
5. Current liability = supplier of equipment + creditor = 10,000 + 180,000 (2,00,000-20,000) = 1,90,000
6. Expenses = discount allowed +salary+ insurance expenses +loss of earthquake = 5000+60,000+5,000+20,000(50,000-30,000) = 90,000
7. Prepaid expenses = prepaid insurance = 10,000
8. Outstanding expenses = outstanding salary = 5,000
9. Income earned = income earned on sales = 3,20,000
10. Debtors = 5,70,000
Hope this helps you
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