Ram commenced business with a capital of 2,00,000. At the end of the year his assets include cash 40,000, stock 70,000, debtors 85,000, furniture 25,000 and liabilities 30,000.
Ascertain his capital at the end and profit or loss incurred if he introduced further capital of 25,000 but bought bike of 30,000 for personal use during the year.
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Answer:
Loss = 5,000
Explanation:
Closing capital = 40,000+70,000+85,000+25,000-30,000=1,90,000
closing capital = 1,90,000
+ drawings = 30,000
- additional capital = 25,000
- opening capital = 2,00,000
loss = 5,000
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