Question

Question 26.
Mohan started a business on 1st April, 2017 with a capital of ₹ 25,000 and a loan of ₹ 12,500 borrowed from Shyam. During 2017-18 he had introduced additional capital of ₹ 12,500 and had withdrawn ₹ 7,500 for personal use. On 31st March, 2018 his assets were ₹ 75,000. Find out his capital as on 31st March, 2018 and profit made or loss incurred during the year 2017-18.

Answer 1

His capital as on 31st March, 2018 is ₹ 62,500 and profit made or loss incurred during the year 2017-18 is ₹ 32,500.

Explanation:

Given:

Mohan started a business on 1st April, 2017 with a capital of ₹ 25,000 and a loan of ₹ 12,500 borrowed from Shyam. During 2017-18 he had introduced additional capital of ₹ 12,500 and had withdrawn ₹ 7,500 for personal use. On 31st March, 2018 his assets were ₹ 75,000.

Now, to find his capital as on 31st March, 2018 and profit made or loss incurred during the year 2017-18.

So, to get the Capital on 31st March, 2018 we put formula:

Capital = Assets - Loan borrowed

$Capital =75000-12500\\\\Capital=62500.$

Thus, Capital on 31st March, 2018 is  ₹ 62,500.

As, the Opening capital is ₹ 25,000 and the Closing Capital is ₹ 62,500.

Now, to get the profit made or loss incurred during the year 2017-18 we again put another formula:

Profit/Loss = (Closing capital + Drawings) - (Opening capital + Additional capital)

$Profit/Loss=(62500+7500)-(25000+12500)$

$Profit/Loss=70000-37500$

$Profit/Loss=32500.$

Hence, the profit made or loss incurred during the year 2017-18 is ₹ 32,500.

Therefore, his capital as on 31st March, 2018 is ₹ 62,500 and profit made or loss incurred during the year 2017-18 is ₹ 32,500.