Question 4.
Vikas maintains his books of account on Single Entry System. He provides following information from his books. Find out additional capital
introduced in the business during the year 2017-18.
Opening Capital – ₹ 1,30,000 ; Drawing during the year ₹ 50,000
Closing Capital – ₹ 2,00,000 ; Profit made during the year ₹ 1,00,000
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The additional capital introduced in the business is ₹ 20,000.
Explanation:
Given:
Vikas maintains his books of account on Single Entry System. He provides following information from his books:
Opening Capital – ₹ 1,30,000 ; Drawing during the year ₹ 50,000
Closing Capital – ₹ 2,00,000 ; Profit made during the year ₹ 1,00,000.
Now, to find the additional additional capital introduced in the business.
Opening Capital = ₹ 1,30,000.
Drawings = ₹ 50,000 .
Closing Capital = ₹ 2,00,000.
Profit = ₹ 1,00,000.
Now, to get the additional capital we put formula:
Additional Capital = (Closing Capital + Drawings) - (Opening Capital + Profit)
Therefore, the additional capital introduced in the business is ₹ 20,000.
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