Nathan started a small business with a capital of Rs.7, 50,000 on 1 st April 2021. On 31st March 2022, he had total assets minus outside liabilities (net worth) of business Rs.5,00,000. During the year he withdrew Rs.3, 75,000 from his business as drawings and introduced Rs.50,000 as additional capital. Calculate profit/ loss.
Answers
Correct option is A)
Assets = Rs. 1,80,000; Net worth or Owner's Equity = ?; Outside Liability = Rs. 50,000
The accounting equation is:
Assets = Outside Liability + Owner's Equity or Net Worth
Rs. 1,80,000 = Rs. 50,000 + Owner's Equity or Net Worth
Owner's Equity or Net Worth = Rs. 1,80,000 - Rs. 50,000
Owner's Equity or Net Worth = Rs. 1,30,000
Answer:
Explanation:
As per the question:
Given That:
Nathan started a small business with a capital of Rs.7, 50,000 on 1 st April 2021. On 31st March 2022, he had total assets minus outside liabilities (net worth) of business Rs.5,00,000. During the year he withdrew Rs.3, 75,000 from his business as drawings and introduced Rs.50,000 as additional capital.
To Find:
profit/ loss.
Solution:
Correct option is A)
Assets = Rs. 1,80,000; Net worth or Owner's Equity = ?; Outside Liability = Rs. 50,000
The accounting equation is:
Assets = Outside Liability + Owner's Equity or Net Worth
Rs. 1,80,000 = Rs. 50,000 + Owner's Equity or Net Worth
Owner's Equity or Net Worth = Rs. 1,80,000 - Rs. 50,000
Owner's Equity or Net Worth = Rs. 1,30,000
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