Question

Q.8 X started business on 1st April 2009 with a capital of Rs.1,20,000. He took bank loan Rs.40,000, on 31st March 2010, his assets were Rs. 2,40,000 and creditor wee Rs.30,000. Loan has not been paid so far. Determine his capital at the end of the year and profit.

Answer 1

liabilities = bank loan + creditor 
             =40000+30000
             =70000

asset = closing capital +liablitites 240000= closing capital + 70000closing capital =240000-70000                       = 170000


closing capital = opening capital + profit 
170000= 120000+profit 
profit =170000-120000          =50000
hence profit = 50000 hope its useful ..!!!