When capital in the beginning is Rs.10,000, drawings during the year is Rs.6,000, profit made during the year is Rs.2,000 and the additional capital introduced is Rs.3,000,find out the amount of capital at the end.
Answers
Answer:
When capital in the beginning is Rs.10,000, drawings during the year is Rs.6,000, profit made during the year is Rs.2,000 and the additional capital introduced is Rs.3,000,find out the amount of capital at the end.
Right answer is 9,000.
The total amount of capital in the end is Rs. 9000.
• The capital at the beginning of the year is known as opening capital. It is the adjusted balance presented toward the start of an accounting period.
• Closing capital or capital at the end of the year is the amount remaining in an account within our charts, positive or negative, at the end of an accounting period.
• Drawings in accountancy refer to the sum of money that is taken or drawn out from the business account for personal use.
• Profit in accountancy refers to the positive amount remaining in a company’s account after subtracting incurred expenses from the revenue generated over an accounting period.
We have,
Opening capital = Rs. 10000, Drawings = Rs. 6000, Profit during the year = Rs. 2000 and Addotional capital = Rs. 3000.
We know,
⇒ Closing capital = Opening capital + Additional capital + Profit – Drawings
⇒ Closing capital = 10000 + 3000 + 2000 – 6000
⇒ Closing capital = 10000 + 3000 + 2000 – 6000
⇒ Closing capital = 9000
Therefore, closing capital or capital in the end is Rs. 9000
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