Sohan started a business on 1st April,2018 with a capital of Rs10,000 and Borrowed Rs3,000 from a friend. He earned a profit of Rs5,000 during the year ended 31st March,2019 and withdrew cash Rs4,000 for personal use.
What is his capital on 31st March,2019?
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here capital on 31st March 2019 shows closing stock for a financial year 2018.
started with capital(opening stock)= 10,000
additional capital(borrowed money from friend)= Rs.3,000
profit= Rs.5000
drawings= Rs.4000
closing stock(capital on 31st March ) = opening stock+ profits+additional capital - drawings.
=>10000+ 3000+5000-4000
Closing stock = Rs. 14,000
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