Question

Mukesh started business on 1st april, 2014 with a capital of rs. 40,000. He introduced fresh capital of rs. 10,000 and withdrew rs. 5,000 for his personal use. He made a profit of rs. 4,000 for year ending 31st march, 2015. Calculate capital of Mukesh as on 31st March,2015

Answer 1

opening capital=40000
additional capital=10000
drawing=5000
profit=4000
opening capital =closing capital+ drawing-additional capital-profit
40000=x+5000-10000-4000
40000-5000+10000+4000=x
54000-5000=x
49000=x

Answer 2

CLOSING CAPITAL = OPENING CAPITAL + ADDITIONAL CAPITAL - DRAWINGS + PROFITS

Here,

Opening capital i.e., capital as on 1 st April 2014 is Rs.40,000

Additional Capital = Rs.10,000

Drawings = Rs.5,000

Profits = Rs.4000

Closing Capital = Rs.40,000 + Rs.10,000 - Rs.5000 + Rs.4000

Closing Capital i.e., capital as on 31st March ,2015 = Rs.49,000