Question

Question 3.
Capital of Ganesh Gupta in the beginning of the year was ₹ 70,000. During the year his business earned a profit of ₹ 20,000, he withdrew ₹ 7,000 for his persona use. He sold ornaments of his wife for ₹ 20,000, and invested that amount into the business. Find out his Capital at the end of the year.

Answer 1

Ganesh Gupta Capital at the end of the year is ₹ 1,03,000.

Explanation:

The capital of the Ganesh Gupta business at the beginning of the year was ₹ 70,000.

Profit earned by the business is ₹ 20,000

The withdrew amount by Ganesh Gupta is ₹ 7,000

Invested amount into the business ₹ 20,000

The formula for Capital at the end of the year = Capital in the beginning + Additional Capital + Profit – Drawings

• Capital at the end of the year = 70,000 + 20,000 + 20,000 – 7,000
• Capital at the end of the year = ₹ 1,03,000.