Rameshwari started business woth rs. 300000 and took a loan pf 100000 from bank. At the end of the year assets rs. 600000 and creditors rs. 20000 (loan not included) Calculate the closing capital and profit
Answers
Given
Opening stock = 300000
Loan (long term liability ) = 100000
assets @ end = 600000
creditors (current liability ) = 20000
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1) capital = asset - liability
closing capital + opening capital = assets - (long term liability + short term liability )
closing capital +300000 = 600000- (100000+20000)
closing capital = 600000-120000-300000
=180000
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closing capital = opening capital + profit
180000= 300000+profit
profit = 300000-180000
=120000
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Ans
Closing capital = 180000
profit = 120000